Norada Real Estate Investments

California Housing Affordability Drops in the Third Quarter 2023

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California Housing Affordability Drops in the Third Quarter 2023

The California housing market is facing a significant challenge as housing affordability hits a 16-year low in the third quarter of 2023. This decline is attributed to soaring interest rates, reaching a two-decade high, and a continuous rise in home prices, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

Statistics and Figures:

In Q3 2023, only 15 percent of California households could afford the median-priced home of $843,600, down from 16 percent in the previous quarter and 18 percent a year ago. To afford this home, a minimum annual income of $221,200 was required, with monthly payments of $5,530 on a 30-year fixed-rate mortgage at a 7.14 percent interest rate.

For condos and townhomes with a median price of $650,000, 23 percent of home buyers could afford them. The minimum annual income needed for this purchase was $170,400, resulting in monthly payments of $4,260.

Interest Rates and Impact:

The effective interest rate surpassed 7 percent for the first time in over two decades, standing at 7.14 percent in Q3 2023. This surge in interest rates is a critical factor contributing to the decline in housing affordability.

However, there is optimism that interest rates may decrease if there is a further economic slowdown, which could potentially alleviate pressure on both the supply and demand sides of the housing market, leading to improved affordability in the upcoming quarters.

Regional Affordability:

When examining housing affordability on a regional level:

  • 36 counties experienced a decline in affordability compared to the previous quarter, with only 5 counties showing improvement.
  • On a year-over-year basis, 6 counties witnessed improved affordability, while 42 counties recorded a decline.

County-specific Insights:

Notable findings from specific counties include:

  • Lassen (58 percent) remained the most affordable county in California, requiring a minimum qualifying income of $55,600 to purchase a median-priced home.
  • Mono (5 percent), Monterey (9 percent), San Luis Obispo (10 percent), and Santa Barbara (10 percent) were the least affordable counties, each demanding a minimum income of at least $226,800 to buy a median-priced home.
  • San Mateo topped the list with the highest minimum qualifying income of $516,000, followed by Santa Clara ($484,800) and Marin ($416,400).

Year-over-Year Affordability Changes:

Notable year-over-year changes include:

  • Kings experienced the most significant drop in affordability, falling 13 points from Q3 2022 to Q3 2023.
  • Amador registered the second-largest decline, moving eight points below the previous year.
  • Kern, Sacramento, and Stanislaus each dropped six points from a year ago.

Despite higher household incomes, elevated home prices, and increased mortgage rates remain primary factors contributing to the challenges in housing affordability across most counties in California.

For a visual representation of the data, refer to the infographic provided by C.A.R.

Fifth Bank Failure in 2023: Closure of Citizens Bank

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Fifth Bank Failure in 2023: Closure of Citizens Bank

If you are a customer of Citizens Bank in Sac City, Iowa, you may have been surprised to find out that your bank was closed by the regulators on November 3, 2023. This marked the fifth bank failure in the US this year and the first one in Iowa since 2011.

Citizens Bank was established in 1929 and had two branches in Sac City, a small town of about 2,000 people. According to the FDIC (Federal Deposit Insurance Corporation), the bank had about $66 million in total assets and $59 million in total deposits as of September 2023. The bank was mainly focused on agricultural lending, but also had significant exposure to commercial trucking loans.

Cause of Citizens Bank Failure

During a joint examination by the Iowa Division of Banking and the FDIC, examiners discovered that the bank had incurred heavy losses on some of its out-of-territory and out-of-state loans to one industry. The regulators did not specify which industry was involved, but some sources suggest that it was related to oil and gas exploration. The bank had not properly reported these losses to its management or shareholders, leading to insolvency.

Resolution and Impact on Customers

The FDIC was appointed as the receiver of the bank and entered into a purchase and assumption agreement with Iowa Trust & Savings Bank, based in Emmetsburg. Iowa Trust & Savings Bank agreed to assume all deposits of Citizens Bank, including personal, commercial, and government accounts. The two branches of Citizens Bank reopened as branches of Iowa Trust & Savings Bank on November 6. Customers can access their money through existing checks, debit cards, and online banking services. The FDIC assured that no depositor lost any money as a result of the bank failure.

The FDIC provided a toll-free number (1-800-523-8089) and a website (FDIC Citizens Bank Closure) for customers to get more information about the bank closure and their accounts. Customers are advised to review their deposit insurance coverage using the online Electronic Deposit Insurance Estimator (EDIE) tool to calculate their coverage.

Financial Implications and FDIC's Role

The FDIC reported that as of June 30, 2023, there were some banks on its “problem list,” indicating banks at risk of failure. The estimated cost of resolving Citizens Bank is $14.8 million, to be paid by the Deposit Insurance Fund (DIF). The DIF, with a balance of $117.9 billion as of June 30, 2023, represents 1.35% of insured deposits. The FDIC aims to maintain the fund at a minimum level of 1.35% and can adjust premiums accordingly.

The bank failure of Citizens Bank is not expected to have a significant impact on the overall banking system or the economy of Iowa. However, it is a sad event for the community of Sac City and the employees and shareholders of Citizens Bank. We hope that this information has helped you understand what happened to Citizens Bank and what you can do if you are affected by it.

Powell Issues Caution: Fed ‘Not Confident’ in Inflation Battle

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Powell Issues Caution: Fed 'Not Confident' in Inflation Battle

Federal Reserve Chair Jerome Powell expressed uncertainty about the central bank's success in tackling inflation, emphasizing the ongoing challenges. Powell, addressing an International Monetary Fund audience, revealed the Federal Open Market Committee's commitment to a restrictive monetary policy but admitted, “We are not confident that we have achieved such a stance.”

Despite acknowledging a slowdown in inflation, Powell highlighted that it remains “well above” the desired 2% target. The series of rate hikes implemented earlier faced interruption from climate protesters during Powell's recent public speeches.

Following Powell's speech, the Dow Jones Industrial Average dipped, and Treasury yields rose. Analysts, including Jeffrey Roach, Chief Economist at LPL Financial, warned investors not to be too optimistic about future rate cuts, suggesting that the Fed may continue hiking rates if inflation accelerates.

Market sentiment, however, leans towards the belief that the Fed is done with rate hikes. According to CME Group, futures pricing indicates a less than 10% probability of a final rate hike in the upcoming FOMC meeting. Traders anticipate potential rate cuts in the next year, possibly around June.

Economic Landscape and Policy Challenges

Powell acknowledged the economy's strong 4.9% annualized growth in the third quarter but anticipated a moderation in the coming quarters. Unemployment, while still low, has seen a modest increase this year. Powell stressed the Fed's vigilance, indicating that unexpected economic growth could warrant a response from monetary policy.

Improvements in supply chains have contributed to easing inflation pressures, but Powell questioned the extent of further progress through supply-side enhancements. He hinted that a significant portion of the battle against inflation might depend on tight monetary policy restraining aggregate demand growth.

Zero-Rate Challenges and Future Outlook

As part of a broader presentation at the Jacques Polak Annual Research Conference, Powell addressed challenges in keeping rates anchored near zero. He expressed caution, stating it is “too soon” to declare whether zero-rate challenges are a thing of the past.

Powell's remarks reflect the Fed's commitment to addressing inflation concerns, yet uncertainty persists, influencing market dynamics and future expectations.

US Bank Stocks Hit an All-Time Low Amid Bond Market Turmoil

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US Bank Stocks Hit an All-Time Low Amid Bond Market Turmoil

In a startling turn of events, US bank stocks have plummeted to an unprecedented low, sending shockwaves through the financial markets. According to financial experts, this drastic downturn is not a standalone occurrence but rather the result of a perfect storm brewing in the banking sector.

US bank stocks hit an all-time low relative to the S&P 500, marking a historic moment in the financial landscape. Renowned financial analyst Michael Hartnett from Bank of America sheds light on the underlying factors contributing to this dire situation.

One of the primary catalysts is a recent bond market crash, which unfolded within the last 18 months, causing a ripple effect across the banking industry. This crash has exposed vulnerabilities in balance sheets, leading to widespread weakness and liquidity issues.

Adding to the woes are historical debt crises that have haunted the banking sector, creating a challenging environment. Stringent banking regulations and a prolonged period of near-zero interest rates have further exacerbated the situation, creating a confluence of challenges for banks.

The Fallout and Unraveling Realities

The repercussions of the bond market crash are profound, with regional banks, including Silicon Valley Bank, bearing the brunt. Forced to sell bond securities at a loss, these institutions find themselves grappling with financial difficulties that are reverberating through the industry.

Moody's, a reputable financial agency, estimates that US banks are facing a staggering $650 billion in unrealized losses from these securities. Notably, Bank of America alone is contending with an eye-watering $130 billion in unrealized losses, representing a colossal missed opportunity for potential yields exceeding 5%.

Compounding the current situation are echoes from the past, as periodic debt crises in the 1980s, 1990s, and 2000s cast a long shadow over the industry. The combination of these historical events, stringent regulations, and a prolonged period of near-zero interest rates has pushed US bank stocks to an all-time low relative to the S&P 500.

Looking Ahead: Challenges and Financial Stability

This alarming trend underscores the severe impact on bank profitability and balance sheet strength. The banking sector now finds itself navigating significant challenges in the aftermath of the bond market crash, with far-reaching implications for financial stability.

As interest rates surged in the past 18 months, bond prices plunged, leading to the unwinding of regional banks like Silicon Valley Bank. With banks holding onto bonds with unrealized losses, the opportunity cost remains high, hindering their ability to capitalize on higher yields.

This unprecedented situation demands a careful examination of the structural issues within the banking sector. Analysts are closely monitoring how financial institutions will respond to these challenges and the broader implications for the economy.

30-Year Mortgage Rate Takes a Steep Dive in Nearly 16 Months

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30-Year Mortgage Rate Takes a Steep Dive in Nearly 16 Months

In a significant turn of events, the 30-year mortgage rate in the United States has experienced its most substantial drop in nearly 16 months. This surprising development comes on the heels of a Treasury market rally, which led to a remarkable decline in the benchmark yields responsible for determining home loan costs.

According to the Mortgage Bankers Association (MBA), the average contract rate for a 30-year fixed-rate mortgage plummeted by a quarter percentage point to 7.61% during the week ending on November 3. This marks the lowest rate observed in approximately a month and stands as the most significant weekly rate drop since late July 2022.

The consecutive weekly decline has effectively lowered the borrowing costs associated with home purchases. This comes after a period where rates had surged to two-decade highs, hovering around 8% in October. These soaring rates were a direct result of increasing yields on the 10-year Treasury note, serving as the benchmark for U.S. home loan rates.

However, the scenario took a dramatic turn last week when the U.S. Treasury announced that upcoming debt issuance would be less than initially expected. Simultaneously, the Federal Reserve decided to keep its key overnight policy rate unchanged for the second consecutive meeting. These factors triggered a notable reversal in the yields, leading to the drop in mortgage rates.

Joel Kan, the MBA's vice president and deputy chief economist, commented on these developments, stating, “Last week's decrease in rates was driven by the U.S. Treasury's issuance update, the Fed striking a dovish tone in the November FOMC (Federal Open Market Committee) statement, and data indicating a slower job market.”

The MBA's mortgage market composite index, which measures the volume of mortgage applications for both home purchases and refinancing of existing loans, rose by 2.5% compared to the previous week, reaching a level of 165.9.

While purchase applications increased by 3% during the week, they are still lagging significantly behind figures from a year ago, currently standing 20% lower. This suggests that potential homebuyers are remaining cautious and waiting on the sidelines, despite the decline in rates. Meanwhile, sellers who have locked in lower mortgage rates continue to hold onto their properties, which is contributing to the ongoing shortage of available homes in the housing market.

The sudden and substantial drop in the 30-year mortgage rate, driven by various economic factors, has created new opportunities for potential homebuyers. However, despite this significant rate reduction, buyers remain cautious, leading to a noticeable disparity between purchase applications and the previous year's figures. This situation has also contributed to a shortage of homes in the market.

Fed’s Powell Urges Flexibility in Face of a Dynamic Economy

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Fed’s Powell Urges Flexibility in Face of a Dynamic Economy

Federal Reserve Chair Jerome H. Powell, in a recent address at the Federal Reserve, emphasized the need for flexibility in economic forecasting. Powell, a central figure in the nation's monetary policy, spoke during a news conference held on Wednesday, November 1, 2023, and addressed critical issues facing the Federal Reserve.

Challenges and Calls for Flexibility

During the conference, Powell discussed the Federal Reserve's decision to maintain the key short-term interest rate for the second consecutive time. However, he also highlighted the central bank's openness to the possibility of further rate hikes if inflationary pressures intensify in the coming months.

Jerome Powell stressed the importance of flexibility in economic forecasting, encouraging the Federal Reserve's forecasters to “think outside” traditional economic models. He acknowledged that the post-pandemic economy has consistently defied expectations. Powell praised the Division of Research and Statistics, a key source of economic data and analysis that informs the Federal Reserve's interest rate decisions. Notably, the Division was celebrating its 100th anniversary at the conference.

Powell emphasized that while the division's forecasts demand “a high degree of intellectual rigor,” this rigor must be complemented by flexibility and agility. He pointed out that while economic models have historically been effective at explaining the workings of the economy over past decades, they often fall short in times of unpredictability.

“Our economy is flexible and dynamic, subject to unexpected shocks like a global financial crisis or a pandemic,” Powell stated. “In such times, forecasters must go beyond the limitations of traditional models.”

Interest Rates and Economic Resilience

Notably, Jerome Powell did not provide specific details about the economic outlook or potential changes in interest rates during his address. However, it's worth mentioning that the Federal Reserve recently decided to maintain interest rates within a range of 5.25 percent to 5.5 percent. This marked the first time in nearly two years that the Federal Reserve opted to keep rates unchanged at consecutive meetings.

The central bank had previously raised interest rates multiple times over the past year and a half, aiming to curb inflationary pressures. Despite these efforts, the economy has proven remarkably resilient, with inflation still exceeding the Federal Reserve's target of 2 percent.

In contrast, the labor market appears to be showing signs of cooling. The October jobs report, released last week, fell short of expectations. The report indicated that the U.S. economy added 150,000 jobs, while the unemployment rate rose to 3.9 percent.

According to experts, this complex economic landscape presents a unique set of challenges for the Federal Reserve as they navigate their monetary policy decisions.

In summary, Federal Reserve Chair Jerome H. Powell's call for flexibility in economic forecasting reflects the dynamic nature of the U.S. economy. As the central bank grapples with maintaining stability and controlling inflation, the ability to adapt to unforeseen circumstances remains a critical factor in their decision-making process.

Bank Failures This Week: Is Banking Industry in Trouble?

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bank failures this week

The banking industry is a cornerstone of the global economy, facilitating the flow of capital and supporting businesses and individuals with their financial needs. However, the industry is not immune to challenges, and bank failures can cause significant disruptions in financial markets. In recent times, there have been reports of bank failures and acquisitions, raising concerns about the stability of the banking industry.

Let us explore the recent bank failures, the reasons behind them, and the impact they may have on the banking industry and the wider economy. Although not widespread, there are many banks that have made poor decisions with how they have invested their funds. The deposits they receive from their bank customers are the funds being invested, and many banks have invested in longer-term investments, such as treasuries. In the past year, the Federal Reserve has aggressively raised rates, causing the value of the treasuries held by banks to reduce.

Which Bank Failures Happened This Week?

Citizens Bank, Sac City, Iowa, has made headlines this week as it was closed by the Iowa Division of Banking. In response to this, the Federal Deposit Insurance Corporation (FDIC) was appointed as the receiver. Let's delve into the details of this recent bank closure.

To safeguard the interests of depositors, the FDIC entered into a Purchase and Assumption Agreement with Iowa Trust & Savings Bank, Emmetsburg, Iowa. This agreement involves Iowa Trust & Savings Bank assuming all of the deposits previously held by Citizens Bank. Furthermore, the two branches of Citizens Bank will reopen as branches of Iowa Trust & Savings Bank, ensuring that customers can access their accounts seamlessly.

READ: List of Failed Banks in the United States

During the transition period, depositors of Citizens Bank can access their money through various means, including writing checks or using ATM and debit cards. Checks drawn on the bank will continue to be processed, and loan customers are encouraged to make their payments as usual.

One key piece of information for depositors is that they will automatically become depositors of Iowa Trust & Savings Bank. This means that customers do not need to change their banking relationship to maintain their deposit insurance coverage.

As of September 30, 2023, Citizens Bank had approximately $66 million in total assets and $59 million in total deposits. Additionally, Iowa Trust & Savings Bank has agreed to purchase essentially all of the failed bank's assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $14.8 million as a result of this bank closure. It's worth noting that this fund, established by Congress in 1933 and managed by the FDIC, is designed to protect the deposits at the nation's banks.

Citizens Bank's closure marks the fifth bank failure in the nation this year. Notably, the last bank failure in Iowa occurred on November 18, 2011, with the closure of Polk County Bank in Johnston, Iowa.

The closure of Citizens Bank and its subsequent acquisition by Iowa Trust & Savings Bank highlights the dynamic nature of the banking industry. Customers of Citizens Bank can expect a smooth transition without needing to change their banking relationship. The FDIC, through its diligent efforts, ensures the protection of depositors and the stability of the banking system. It's also a reminder of the vital role the Deposit Insurance Fund plays in safeguarding the nation's bank deposits.

Potential Reasons for the Banking Failures in 2023

Although not widespread, there are many banks that have made poor decisions with how they have invested their funds. The deposits they receive from their bank customers are the funds being invested, and many banks have invested in longer-term investments, such as treasuries. In the past year, the Federal Reserve has aggressively raised rates, causing the value of the treasuries held by banks to reduce.

Several reasons have been identified for the banking turmoil:

  • Large Deposits: Many of the banks under pressure have a large number of deposits that are too big to be insured by the Federal Deposit Insurance Corporation (FDIC). This makes them vulnerable to a run, where customers scramble for their money back, and a bank would be unable to deal with that demand.
  • Investments in Government Bonds: Investments made by investment banks in government bonds have lost value as the Federal Reserve has raised interest rates aggressively. This has led to a significant reduction in the value of these investments.
  • Exposure to Commercial Mortgages: Many lenders are exposed to commercial mortgages, which are becoming increasingly risky as the economy slows down. These mortgages are often made to businesses that are unable to repay their loans in a timely manner, resulting in higher levels of defaults and foreclosures.

Duration Problem with Balance Sheet Assets

The bank can hold these securities to maturity and receive the invested funds back. The problem comes up if the bank is short on covering customer deposits and must sell these investments. In doing so, the bank may take significant losses on these investments. Therefore, banks have a duration problem with their balance sheet on how they hold assets.

Banks that have been better managing their assets will be in a solid position, which may be the case when it comes to smaller community banks. These banks may be more invested in their local communities, which may be more sustainable. However, unfounded fears have led bank customers to move their deposits to the few megabanks, believing that they are safer as they are too big to fail. This reaction could have some negative consequences in smaller communities.

Tightening Credit and Economic Slowdown

The bank failures also create additional credit-tightening consequences. As the Federal Reserve continues to tighten, they create more strain on the banking sector. Perhaps it may be time for the Fed to pause on its aggressive tightening with its rate increases as it is beginning to impact many segments of the economy.

This past Wednesday, the Fed increased its overnight lending rates by another .25%. With the latest bank failure, this may be a strong signal that the Fed should pause on any future increases. The cumulative effect of the rate hikes over the past year will continue to slow the economy, bringing the current inflation rate lower.

No Further Contagion Amongst Regional Banks

These bank failures have little in common with what happened in the 2008 housing crisis. With these recent bank events, the hope is that there is no further contagion amongst regional banks. Fed Chairman Jerome Powell did state that the banking sector remains strong. However, new signs of banking turmoil have emerged following the failure of First Republic Bank.

The third bank failure in 2023 has raised concerns about the stability of other regional banks. Shares of several regional banks, including California-based PacWest and Western Alliance, have been hit hard, fueling fears of more bank failures. The situation has been worsened by Wall Street investors who are betting on a further decline in regional bank shares.

The current situation in the banking industry is uncertain, and the future remains unclear. While some regional banks may struggle in the short term, others are expected to remain stable. Smaller community banks, in particular, may be better positioned to weather the storm, as they are more invested in their local communities and have a more personal relationship with their customers.

In conclusion, the banking industry is currently facing a period of turmoil, with several bank failures and increasing concerns about the stability of the industry. However, it is important to note that not all banks are created equal, and some may be better positioned to weather the storm than others. Additionally, there are steps that can be taken to improve the stability of the industry, such as reducing the reliance on large deposits and investing in less risky assets.

Sources:

  • https://www.fdic.gov/news/press-releases/2023/pr23034.html
  • https://www.eptrail.com/2023/05/04/business-another-bank-failure-this-week/

Citizens Bank Collapse Sac City, IA (2023)

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Citizens Bank Collapse: Failed Bank Information Sac City, IA

On Friday, November 3, 2023, Citizens Bank was closed by the Iowa Division of Banking. The Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

Iowa Trust & Savings Bank, Emmetsburg, IA, assumed all deposit accounts and substantially all the assets. All shares of stock were owned by the holding company, which was not involved in this transaction.

If You Had a Deposit Account

The full balance of all deposit accounts has been transferred to Iowa Trust & Savings Bank. You may continue to use your checks and ATM/Debit card. Direct deposits like paychecks and social security benefits will continue as usual. Please refer to the Banking Services section below for more details.

If You Had a Loan

You should continue to make payments, including escrow payments, as usual; the terms of your loan will not change. If your loan is currently in process or you had a line of credit, contact your loan officer. If you are making escrow payments and receive notification that any portion of your taxes or insurance was not paid, contact your loan officer.

If You Are Owed Money for a Service or Product Provided

You may be eligible to file a claim against Citizens Bank. If you have not been paid for services rendered prior to November 3, 2023, please refer to the Filing Claims section below.

Beware of Scams

If you are concerned about becoming a victim of fraud, be advised that you will not receive any communication from the FDIC requesting any private information. Be watchful for and resistant to any scams to obtain information from you by individuals or entities stating they are acting on behalf of Citizens Bank, Iowa Trust & Savings Bank, or the FDIC. The FDIC, however, will encourage you to correspond with us via the FDIC Claims Portal, a secure web portal.

Acquiring Institution: Iowa Trust & Savings Bank

About Iowa Trust & Savings Bank

All deposit accounts have been transferred to Iowa Trust & Savings Bank, Emmetsburg, IA, (“assuming institution”) and will be available immediately. The former Citizens Bank locations will reopen as branches of Iowa Trust & Savings Bank during regular business hours. All transferred deposits will be separately insured from any accounts you may already have at Iowa Trust & Savings Bank for at least six months after the failure of Citizens Bank.

Checks that were drawn on Citizens Bank that did not clear before the institution closed will be honored as long as there are sufficient funds in the account. Iowa Trust & Savings Bank will review deposit rates. You will be notified of any changes. You may withdraw your funds from any transferred account without an early withdrawal penalty until you enter into a new deposit agreement with Iowa Trust & Savings Bank as long as the deposits are not pledged as collateral for loans.

Contacting Iowa Trust & Savings Bank

You can contact Iowa Trust & Savings Bank:

Iowa Trust & Savings Bank
2101 10th St
Emmetsburg, IA 50536
Iowa Trust & Savings Bank Website

Brokered Accounts

All deposit accounts, excluding the Cede & Co deposits, have been transferred to Iowa Trust & Savings Bank. If you are a customer who has a Citizens Bank deposit through a broker, you must contact your broker with any questions.

Banking Services

Automatic Payments/Bill Pay/Online Banking

These services will continue as usual. Your routing number and account number will remain the same until you are notified in writing by Iowa Trust & Savings Bank.

ATM and Debit Cards

Your ATM/Debit card will continue to work as usual.

Checks

Your checks will be processed as usual. All outstanding checks will be paid against your available balance(s). Iowa Trust & Savings Bank will contact you soon regarding any changes in the terms of your account. If you have a problem with a merchant refusing to accept your check, please contact your branch office.

Direct Deposit

All direct deposits, for example, social security, payroll, veterans' benefits, disability, unemployment, or any payment you receive electronically will continue as usual.

Overdraft Lines of Credit

These lines have been transferred to Iowa Trust & Savings Bank. Please contact Iowa Trust & Savings Bank if you have additional questions regarding your accounts.

Safe Deposit Boxes

You will have access to your safe deposit boxes during normal business hours. Any changes will be communicated by Iowa Trust & Savings Bank.

Tax Reporting — 1098 and/or 1099

Iowa Trust & Savings Bank will be responsible for mailing your 1099 tax information. Your 1098 reporting will be done by the FDIC or the servicer of your loan. You will be notified of any changes in ownership or servicing of your loan.

Filing Claims

Creditors

If you or your company provided a service or product, leased space, furniture, or equipment to Citizens Bank prior to November 3, 2023, and have not been paid, you may have a claim against Citizens Bank. Any party/claimant who wishes to submit a Receivership claim electronically should utilize the Non-Deposit FDIC Claims Portal or email nondepclaimsdal@fdic.gov. All creditors having claims against Citizens Bank must submit their claims to the Receiver online, via email, or by mail.

Priority of Claims

In accordance with Federal law, allowed claims will be paid, after administrative expenses, in the following order of priority:

Depositors
General Unsecured Creditors
Subordinated Debt
Stockholders

For Shareholders of Citizens Holding Company

All shares of Citizens Bank are owned by its holding company, Citizens Holding Company, Sac City, IA. The holding company was not included in the closing of the bank or the resulting receivership.

Contacting the Holding Company

If you are a shareholder, please do not contact or file a claim with the Receiver. You must contact the holding company directly:

Citizens Holding Company
500 West Main Street
Sac City

Mortgage Rates Reach Historic Highs: 8% Marks a 23-Year Record

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Mortgage Rates Are at Their Highest in Over 2 Decades

Americans seeking to secure mortgages for their homes are now grappling with the highest mortgage rates in over two decades. The average interest rate for a standard 30-year fixed-rate home loan has surged to 8% for the first time since 2000. This data comes from Mortgage News Daily, a trusted source for tracking mortgage rates.

The Mortgage News Daily Rate Index has officially hit 8.0%, marking the highest mortgage rates in 23 years. This milestone comes as no surprise, given the prevailing upward trend in rates, with minor fluctuations along the way.

Mortgage Rates Are at Their Highest in Over 2 Decades

While this headline-worthy figure may grab your attention, it's essential to understand the context. The mortgage rates on Oct 18, at 8%, are only a slight increase from Oct 17's 7.92%, which was itself the highest rate in 23 years. The breach of this 23-year ceiling initially occurred in late 2022, with a subsequent challenge in August of 2023.

Since then, we've experienced a series of new long-term highs, with seven such instances in less than a month, notably following the Fed's September 20th announcement. These frequent rate highs might seem disconcerting, but they are indicative of a market adapting to a “higher for longer” interest rate environment.

In such scenarios, market patterns exhibit smaller but more frequent fluctuations between rate highs and lows. So, today's record-high is just another step on the same path.

But what's next? Are we on a trajectory towards 10% mortgage rates? It's too early to predict. While it's unwise to rule out the possibility of rates climbing further, there are several factors at play. If the economy softens as the Fed anticipates and inflation remains stable, the upward rate momentum should gradually subside.

However, one significant variable is fiscal policy and government spending, which has recently raised concerns in the financial markets due to its potential impact on Treasury issuance.

Treasury issuance is crucial, as it sets the tone for most other interest rates in the United States. Higher-than-expected issuance can drive up government costs to attract sufficient demand. This trend typically ripples through to mortgage rates, as mortgage-backed securities tend to move in tandem with Treasuries. Whenever the government announces significant spending initiatives or legislation with implications for lower revenues, the bond market risks breaking another rate ceiling.

The upswing in mortgage rates is a consequence of the Federal Reserve's efforts to combat inflation by raising interest rates. Over the last two weeks, rates have escalated by almost half a percentage point, signifying a swift and significant change.

These rate hikes are part of the standard strategy employed by central banks worldwide to control rising prices. In the United States, higher fuel costs have been a key driver of inflation. The central bank's interest rate increases have been further propelled by strong job growth and increasing expectations for rate hikes.

However, recent market volatility in mortgage rates has been influenced by significant shifts in demand for US government debt, sold in the form of US Treasuries. Political turmoil in Washington, coupled with mounting US debt levels, has raised questions about investor appetite for US debt. As a result, prices of Treasuries have fallen, causing yields to rise. This, in turn, has affected mortgage rates, making them more expensive for borrowers.

Matthew Graham from Mortgage News Daily notes that markets have become increasingly sensitive to events that may impact government borrowing. He suggests that the recent spike in mortgage rates may be linked to expectations of substantial overseas military spending proposed by President Joe Biden.

The impact of these rising mortgage rates is already visible in the US housing market. Just two years ago, mortgage rates were around 3%. Now, sales of existing homes have declined by 15% compared to the previous year.

Prospective buyers are withdrawing from the market, while current homeowners with lower mortgage rates are choosing to stay put, causing a decline in sales according to the National Association of Realtors.

Despite the decline in sales, house prices have not yet fallen. In fact, they were up by nearly 4% in the same month, as the demand still surpasses the supply.

Many analysts believe that the Federal Reserve will not significantly increase interest rates further, citing the substantial slowdown in price increases since last year. The inflation rate, a key metric for measuring the pace of price increases, dropped to 3.7% in September.

However, the financial markets have been rattled by unexpectedly robust economic data in recent days. This has raised concerns that the Federal Reserve might need to take further action to bring inflation back to its 2% target. Consequently, interest rates could remain higher for a more extended period in the coming year.

The Federal Reserve's key rate currently ranges between 5.25% and 5.5%, a substantial increase from the near-zero levels in March 2022. These rates have a direct impact on borrowing costs for mortgages, credit card debt, and other loans.

Florida Housing Market Welcomes Fischer Homes as New Builder

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Florida Housing Market Welcomes Fischer Homes as New Builder

In a significant development for the Florida housing market, Fischer Homes, a well-established builder from Kentucky, is making its mark in the Northwest Florida region with the acquisition of Samuel Taylor Homes. This strategic move not only adds another player to the housing market but also signifies the growing appeal of the Sunshine State as a destination for real estate investment.

Fischer Homes, based in Erlanger, Kentucky, has long been recognized as a key player in the homebuilding industry. Ranked 30th on the prestigious 2023 Builder 100 list, the company has primarily focused its operations in Cincinnati, Louisville, Atlanta, Indianapolis, Columbus, Dayton, and St. Louis. However, with the recent acquisition of Samuel Taylor Homes, they are venturing into the promising Northwest Florida housing market.

According to CEO Tim McMahon, “Florida is a natural expansion for us, given the state's population growth and our presence in the Southeast. In addition to the fantastic team that Samuel Taylor has in place, we are also excited to partner with their trade and development partners—they are a huge part of our planned growth and success in Northwest Florida.”

A Win-Win Partnership: Fischer Homes and Samuel Taylor Homes

The deal, set to close in mid-December, will see Fischer Homes actively selling homes in Northwest Florida by the end of the year. As a private home builder with over 40 years of experience and more than 38,000 homes built since its inception in 1980, Fischer Homes has a strong reputation for quality and customer satisfaction.

Samuel Taylor Homes, founded in 2011 by Matt Brandman and Hunter Collins, has already made a significant mark in the Northwest Florida area by constructing over 800 homes. Known for its quality construction, the company focuses on Bay County communities in Panama City and Panama City Beach.

Matt Brandman, one of the founders of Samuel Taylor Homes, will take on the role of market president of the new Florida Gulf Coast Division for Fischer Homes. Brandman expressed his enthusiasm for the partnership, saying, “Once we met the Fischer Homes team, we knew right away that becoming part of the Fischer Homes family would be a win-win for the Samuel Taylor team and our customers. Both companies are focused on delivering the best total new-home customer solution, have a thriving company culture, and see the enormous potential of this market.”

Growth and Success: Fischer Homes' Impressive Track Record

Fischer Homes' acquisition of Samuel Taylor Homes comes on the heels of its remarkable growth in recent years. The company has doubled its home closings since 2016 and doubled its revenue since 2018. This expansion is not only within its existing markets but also into new regions that align with its portfolio of award-winning home designs and expertise in creating communities with enduring value.

Jay Smith, Fischer Homes' president and chief operating officer, highlighted the support provided to their homebuilding divisions by their corporate teams. He emphasized that now is the right time to bring their companies together to create instant scale in a market experiencing rapid growth, with a solid team already in place.

This strategic move by Fischer Homes demonstrates their commitment to delivering exceptional homes and experiences to customers. By entering the Northwest Florida housing market, they aim to become an integral part of the region's real estate landscape.

Looking Ahead: Fischer Homes in the Florida Housing Market

Fischer Homes' entry into the Northwest Florida housing market brings a fresh perspective and new opportunities for homebuyers and investors. With a history of excellence and a reputation for quality, they are poised to make a significant impact in this dynamic real estate landscape.

As the deal with Samuel Taylor Homes nears completion, the Florida housing market can anticipate a surge in homebuilding activity. Fischer Homes' unique approach and commitment to customer satisfaction will likely set new standards in the industry.

Fischer Homes' acquisition of Samuel Taylor Homes represents a milestone in the Florida housing market. This strategic move not only diversifies the options available to homebuyers but also underscores the attractiveness of Florida as a destination for real estate investment. With their impressive track record and commitment to excellence, Fischer Homes is poised for success in the Sunshine State.

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