INFO THAT HITS US WHERE WE LIVE
Well, it had to happen. After a four-month winning streak, Existing Home Sales dropped in August by 2.7% to an annual sales pace of 5.10 million. This offsets the big sales increase we had in July but the overall trend is still up by 3.4% over a year ago and the supply of existing homes is now down to 8.5 months.
Good news came from the Federal Housing Finance Agency, which monitors prices of homes financed with conforming mortgages. They reported prices UP 0.3% in July, their third straight monthly rise. The week ended with single-family New Home Sales for August UP 0.7%. This was slightly less than expected, but 30% above their January low. Best of all, the supply of unsold new homes, down five months in a row, is now at just 7.3 months!
Mortgage applications for purchase loans were up 5.6% from the week before. Applications for government-backed purchase loans were at their highest level ever. It seems many first-time homebuyers are making sure they get that $8,000 tax credit before it expires on November 30! All this was happening as the average interest rate for prime borrowers went below 5% on 30-year fixed-rate mortgages for the first time since May. Average points inched up to 1.12 (including the origination fee) for 80% loan-to-value ratio loans.
Review of Last Week
TAKING A BREATHER... After a nice run up in prior weeks, the stock markets were down three days in a row, ending down for the week overall. But we have to point out that for the year, the Dow is still UP 10.1%, the S&P 500 is UP 15.6% and the tech-heavy Nasdaq is UP a whopping 32.6%! Pretty bullish performance. Problems worrying investors included the slip in Existing Home Sales covered above and Durable Goods Orders down 2.4% for August. That's actually less problematic than it appears, since the decline came mostly from a 30% drop in volatile aircraft orders –– in July, aircraft were up 25%.
The Fed did not raise the rate at their meeting (no surprise) and came out with an FOMC statement that observed "economic activity has picked up" and "activity in the housing sector has increased." These indications of economic recovery were followed with the announcement the Fed would continue through the end of March 2010 their purchases of mortgage-backed securities, which help keep mortgage rates low.
Initial claims for unemployment fell yet again last week, this time by 21,000, to 530,000. The four-week average of continuing claims dropped as well. Meanwhile, the Richmond Fed Index, which gauges manufacturing in the mid-Atlantic region, stayed at +14 in September, the fifth straight month it's been positive. The week ended with the boost in New Home Sales mentioned above, plus University of Michigan Consumer Sentiment at 73.5 for September, its highest reading since January a year ago!
For the week, the Dow ended down 1.6%, to 9665.19; the S&P 500 was off 2.2%, to 1044.38; while the Nasdaq fell 2.0%, to 2090.92.
As usually happens when stock prices sink, bonds soar. The FNMA 30-year 4.5% bond we watch finished up strongly from the previous week's $100.44 close, finishing at $101.12. It was no surprise that mortgage rates moved down a bit more, hitting levels they haven't seen since last May, as noted above.
This Week’s Forecast
CONFIDENCE, SPENDING, JOBS... The week begins with Consumer Confidence and ends with the September Jobs Report. Along the way, on the day Q3 ends, we get the final number on Q2 GDP plus the Chicago PMI take on manufacturing in the Midwest. Thursday, we'll be looking at Pending Home Sales, while the Fed will be focusing on the personal spending PCE number to keep an eye on inflation.
>> The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Tuesday, October 20, 2009
Quotes!
"Purpose and laughter are the twins that must not separate. Each is
empty without the other."
-- Robert K. Greenleaf, Founder of the modern Servant leadership
movement
"Life is 10 percent what you make it, and 90 percent how you take it. "
-- Irving Berlin, American Composer and Lyricist
"Many attempts to communicate are nullified by saying too much."
-- Robert Greenleaf, Founder of the modern servant leadership movement
"We are all, right now, living the life we choose."
-- Peter McWilliams, Author
"When nothing seems to help, I go and look at a stonecutter hammering
away at his rock perhaps a hundred times without as much as a crack
showing in it. Yet at the hundred and first blow it will split in two,
and I know it was not that blow that did it - but all that had gone
before."
-- Jacob Riis, Photographer and Journalist
"Very often a change of self is needed more than a change of scene."
-- Arthur Christopher Benson, British Author
"Give the world the best you have and the best will come back to you."
-- Madeline Bridges
"Nothing in life is more important than the ability to communicate
effectively."
-- Gerald R. Ford, 38th President of the United States
"Until we can manage time, we can manage nothing else."
-- Peter F. Drucker, Author and Management Expert
"Samson killed a thousand men with the jaw bone of an ass. That many
sales are killed every day with the same weapon."
-- Anonymous
"Confidence is contagious. So is lack of confidence."
-- Michael O'Brien
"The success of every major executive depends on the men under him.
Really successful men are pushed up, not pulled up."
-- Thomas J. Watson, Former President of IBM
"In a moment of decision the best thing you can do is the right thing.
The worst thing you can do is nothing."
-- Theodore Roosevelt, 26th President of the United States
"Determination is the down payment on sales achievement."
-- Anonymous
"Chance favors those in motion."
-- James H. Austin, Professor of Neurology and Author
"Man was created as a being who should constantly keep improving, a
being who on reaching one goal sets a higher one."
-- Ralph Ransom
"The most important thing in communication is to hear what isn't being
said."
-- Peter F. Drucker, Author and Management Expert
"Learning is a treasure that will follow its owner everywhere."
-- Proverb
"If you want to achieve a high goal, you're going to have to take some
chances."
-- Alberto Salazar, American Marathon Runner
"I am a great believer in luck, and I find that the harder I work, the
more I have of it."
-- Thomas Jefferson, 3rd President of the United States of America
"The only thing even in this world are the number of hours in a day. The
difference in winning or losing is what you do with those hours."
-- Woody Hayes, Football Coach
"Many of life's failures are people who do not realize how close they
were to success when they gave up."
-- Thomas Edison, Inventor
"We all die. The goal isn't to live forever, the goal is to create
something that will."
-- Chuck Palahniuk, Author
"A dream becomes a goal when action is taken toward its achievement."
-- Bo Bennett
"Great minds have purpose, others have wishes."
-- Washington Irving, American Author
"Asking questions will get you the performance you are after far better
than dictating demands."
-- Dan James
"When you do the things you have to do when you have to do them, the day
will come when you can do the things you want to do when you want to do
them."
-- Zig Ziglar, Author
"Success and failure. We think of them as opposites, but they're really
not. They're companions - the hero and the sidekick."
-- Laurence Shames
"The difference in winning and losing is most often... not quitting."
-- Walt Disney, Animator, Film Producer
"The simple act of paying positive attention to people has a great deal
to do with productivity."
-- Thomas J. 'Tom' Peters
I hope you enjoyed these Quotes!
To See All Homes All The Time Go To
www.BettsHomes.com
empty without the other."
-- Robert K. Greenleaf, Founder of the modern Servant leadership
movement
"Life is 10 percent what you make it, and 90 percent how you take it. "
-- Irving Berlin, American Composer and Lyricist
"Many attempts to communicate are nullified by saying too much."
-- Robert Greenleaf, Founder of the modern servant leadership movement
"We are all, right now, living the life we choose."
-- Peter McWilliams, Author
"When nothing seems to help, I go and look at a stonecutter hammering
away at his rock perhaps a hundred times without as much as a crack
showing in it. Yet at the hundred and first blow it will split in two,
and I know it was not that blow that did it - but all that had gone
before."
-- Jacob Riis, Photographer and Journalist
"Very often a change of self is needed more than a change of scene."
-- Arthur Christopher Benson, British Author
"Give the world the best you have and the best will come back to you."
-- Madeline Bridges
"Nothing in life is more important than the ability to communicate
effectively."
-- Gerald R. Ford, 38th President of the United States
"Until we can manage time, we can manage nothing else."
-- Peter F. Drucker, Author and Management Expert
"Samson killed a thousand men with the jaw bone of an ass. That many
sales are killed every day with the same weapon."
-- Anonymous
"Confidence is contagious. So is lack of confidence."
-- Michael O'Brien
"The success of every major executive depends on the men under him.
Really successful men are pushed up, not pulled up."
-- Thomas J. Watson, Former President of IBM
"In a moment of decision the best thing you can do is the right thing.
The worst thing you can do is nothing."
-- Theodore Roosevelt, 26th President of the United States
"Determination is the down payment on sales achievement."
-- Anonymous
"Chance favors those in motion."
-- James H. Austin, Professor of Neurology and Author
"Man was created as a being who should constantly keep improving, a
being who on reaching one goal sets a higher one."
-- Ralph Ransom
"The most important thing in communication is to hear what isn't being
said."
-- Peter F. Drucker, Author and Management Expert
"Learning is a treasure that will follow its owner everywhere."
-- Proverb
"If you want to achieve a high goal, you're going to have to take some
chances."
-- Alberto Salazar, American Marathon Runner
"I am a great believer in luck, and I find that the harder I work, the
more I have of it."
-- Thomas Jefferson, 3rd President of the United States of America
"The only thing even in this world are the number of hours in a day. The
difference in winning or losing is what you do with those hours."
-- Woody Hayes, Football Coach
"Many of life's failures are people who do not realize how close they
were to success when they gave up."
-- Thomas Edison, Inventor
"We all die. The goal isn't to live forever, the goal is to create
something that will."
-- Chuck Palahniuk, Author
"A dream becomes a goal when action is taken toward its achievement."
-- Bo Bennett
"Great minds have purpose, others have wishes."
-- Washington Irving, American Author
"Asking questions will get you the performance you are after far better
than dictating demands."
-- Dan James
"When you do the things you have to do when you have to do them, the day
will come when you can do the things you want to do when you want to do
them."
-- Zig Ziglar, Author
"Success and failure. We think of them as opposites, but they're really
not. They're companions - the hero and the sidekick."
-- Laurence Shames
"The difference in winning and losing is most often... not quitting."
-- Walt Disney, Animator, Film Producer
"The simple act of paying positive attention to people has a great deal
to do with productivity."
-- Thomas J. 'Tom' Peters
I hope you enjoyed these Quotes!
To See All Homes All The Time Go To
www.BettsHomes.com
Are you in Foreclosure? You are not alone! Read this Article!
Foreclosures of Rich and Famous People
Foreclosures of Rich and Famous People
Although the rich and famous are rich and famous, it doesn't mean that they are impervious to the popping of the real estate bubble. Many have succumbed to real estate woes as of late.
Ed McMahon had tabloids a talking when his real estate troubles became front page news last year. The now deceased celebrity attributed his dollar difficulties to alimony paid out to ex-wives and the economic downturn.
Aretha Franklin set the record straight about her exclusive Detroit suburban home. It went into foreclosure due to non-payment of property tax. She could have lost her $400,000 home to foreclosure due to $445 in back property taxes that accumulated into $20,000, since 2005. She said it was an oversight by her attorney. Once alerted of the situation, the Queen of Soul satisfied the debt.
Amber Frey, infamous ex-mistress of convicted murderer Scott Peterson lost her home northern California home to foreclosure. At auction, the asking price was over $200,000 less than the original purchase price. No one snatched up the deal at a low $305,000. She ended up surrendering the property to the bank.
Fantasia of American Idol fame came close to losing her home in Charlotte, North Carolina. The R&B singer settled with her Florida lender just days before the auction was scheduled to sell her pond-front home.
Extreme Makeover scandal hit the Harper family home in Atlanta, Georga when it went into foreclosure and would have been sold had it not been for ... even more ... generous donations. The most expansive Extreme Makeover ever seen was completed with much dedication, sweat and effort by volunteers, along with a deluge of donated dollars. Taking out a $400,000+ loan for a construction business that went belly up put the Harper's home in harm's way.
Laura Richardson, California Congresswoman, fell behind on property tax and mortgage payments in 2008. To the disdain of Sharon Helmar who sold it to her, the Long Beach home went into foreclosure and was sold. Neighbors noted that she did not keep up the lawn or take out her garbage.
Sports figures are not unfamiliar with foreclosure, either. Latrell "Spree" Sprewell, former NBA guard known for choking his then Coach P. J. Carlesimo, lost his 70-foot yacht and his Milwaukee home to foreclosure. Assessed at a mere $668,000, the home's value was nowhere near what most other sports professionals in his pay range own.
Jose Conseco experienced women woes, which caused him to lose his expansive 7,300 square foot Encino, California mansion. At least, that's his story. He said he lost $7 to $8 million on his two divorces that left him hard up for cash and was unable to pay his mortgage.
Not to anyone's surprise, Michael Vick's home was in foreclosure, since he was in prison and no longer could come up with the cash. Once NFL's highest paid player, the dog-fight diva was convicted and was to serve 23 months in prison. He was released earlier this year to serve out the rest of his sentence in home confinement.
Evander Holyfield, famous for his fight with Mike "I'll Bite Your Ear Off" Tyson, had his Fairburn, Georgia home in foreclosure. He was also behind on child support payments to a mother of one of his eleven children, and being sued for not paying $550,000 he loaned he owed to a consulting company.
Michael Jackson (King of Pop), MC Hammer (Hammertime fame), Veronica Hearst (Randolph Hearst widow), Scott Storch (previous hip-hop producer), Damon Dash (hip-hop mogul), Doug E. Fresh (rap icon), Vin Baker (former NBA star), Wyclef Jean (Fugees' frontman) and other famous actors, performers and sports professionals have all experienced foreclosure.
Foreclosures of Rich and Famous People
Although the rich and famous are rich and famous, it doesn't mean that they are impervious to the popping of the real estate bubble. Many have succumbed to real estate woes as of late.
Ed McMahon had tabloids a talking when his real estate troubles became front page news last year. The now deceased celebrity attributed his dollar difficulties to alimony paid out to ex-wives and the economic downturn.
Aretha Franklin set the record straight about her exclusive Detroit suburban home. It went into foreclosure due to non-payment of property tax. She could have lost her $400,000 home to foreclosure due to $445 in back property taxes that accumulated into $20,000, since 2005. She said it was an oversight by her attorney. Once alerted of the situation, the Queen of Soul satisfied the debt.
Amber Frey, infamous ex-mistress of convicted murderer Scott Peterson lost her home northern California home to foreclosure. At auction, the asking price was over $200,000 less than the original purchase price. No one snatched up the deal at a low $305,000. She ended up surrendering the property to the bank.
Fantasia of American Idol fame came close to losing her home in Charlotte, North Carolina. The R&B singer settled with her Florida lender just days before the auction was scheduled to sell her pond-front home.
Extreme Makeover scandal hit the Harper family home in Atlanta, Georga when it went into foreclosure and would have been sold had it not been for ... even more ... generous donations. The most expansive Extreme Makeover ever seen was completed with much dedication, sweat and effort by volunteers, along with a deluge of donated dollars. Taking out a $400,000+ loan for a construction business that went belly up put the Harper's home in harm's way.
Laura Richardson, California Congresswoman, fell behind on property tax and mortgage payments in 2008. To the disdain of Sharon Helmar who sold it to her, the Long Beach home went into foreclosure and was sold. Neighbors noted that she did not keep up the lawn or take out her garbage.
Sports figures are not unfamiliar with foreclosure, either. Latrell "Spree" Sprewell, former NBA guard known for choking his then Coach P. J. Carlesimo, lost his 70-foot yacht and his Milwaukee home to foreclosure. Assessed at a mere $668,000, the home's value was nowhere near what most other sports professionals in his pay range own.
Jose Conseco experienced women woes, which caused him to lose his expansive 7,300 square foot Encino, California mansion. At least, that's his story. He said he lost $7 to $8 million on his two divorces that left him hard up for cash and was unable to pay his mortgage.
Not to anyone's surprise, Michael Vick's home was in foreclosure, since he was in prison and no longer could come up with the cash. Once NFL's highest paid player, the dog-fight diva was convicted and was to serve 23 months in prison. He was released earlier this year to serve out the rest of his sentence in home confinement.
Evander Holyfield, famous for his fight with Mike "I'll Bite Your Ear Off" Tyson, had his Fairburn, Georgia home in foreclosure. He was also behind on child support payments to a mother of one of his eleven children, and being sued for not paying $550,000 he loaned he owed to a consulting company.
Michael Jackson (King of Pop), MC Hammer (Hammertime fame), Veronica Hearst (Randolph Hearst widow), Scott Storch (previous hip-hop producer), Damon Dash (hip-hop mogul), Doug E. Fresh (rap icon), Vin Baker (former NBA star), Wyclef Jean (Fugees' frontman) and other famous actors, performers and sports professionals have all experienced foreclosure.
Monday, October 5, 2009
Fed Decision Shakes Things Up
Fed Decision Shakes Things Up!
"BE WILLING TO MAKE DECISIONS." General George Patton. And that's exactly what the Fed did last week at their regularly scheduled Federal Open Market Committee meeting. But just what did they decide...and what do their decisions mean for home loan rates?
The Fed said they are going to ration out the remaining commitment of Mortgage Backed Security purchases through the first quarter of 2010. There will be no additional buying, but instead, a longer weaning off of the program. There was some speculation about the Fed increasing the amount of buying above the $1.25T committed to, and last week's statement is the Fed's nice way of saying "no." They will not be buying more in quantity, but what they will do is attempt to provide a smoother transition to normal market conditions.
It is a given that once the Fed ceases its purchases, that interest rates will climb significantly higher...most likely back above the 6% area. So instead of a hard transition with a large bump in rates, the Fed is attempting to allow rates to gradually rise. This means that waiting to purchase or refinance will very likely mean a higher interest rate.
Their decision also means that the Fed's remaining purchases will all be lower in quantity, as the remaining allotment for purchases will be spread over a longer period of time - and additionally, will not necessarily be spread out as evenly as their past purchases - which could lead to more volatility for rates in the near term.
In other news, Existing Home Sales and New Home Sales were reported slightly less than expected, but both reports continue to show signs of an improving housing market. The inventory of unsold existing homes fell to its lowest inventory level since April 2007, while the inventory of unsold new homes dropped to its lowest level since January 2007. While some of the decline in new home inventory may be due to builders constructing fewer homes - these reports indicate that the housing market is indeed showing signs of life.
Remember, with home loan rates still low - but slated to increase with the Fed's recent decision - as well as a juicy tax credit for First Time Home Buyers that is going to expire on November 30th, it makes sense to get off the fence if you've been considering a purchase or refinance. Or do you have a family member, neighbor, friend or coworker who might benefit from getting some good home loan advice? I'm always glad to get your referrals, so simply let me know who I might be able to help.
"BE WILLING TO MAKE DECISIONS." General George Patton. And that's exactly what the Fed did last week at their regularly scheduled Federal Open Market Committee meeting. But just what did they decide...and what do their decisions mean for home loan rates?
The Fed said they are going to ration out the remaining commitment of Mortgage Backed Security purchases through the first quarter of 2010. There will be no additional buying, but instead, a longer weaning off of the program. There was some speculation about the Fed increasing the amount of buying above the $1.25T committed to, and last week's statement is the Fed's nice way of saying "no." They will not be buying more in quantity, but what they will do is attempt to provide a smoother transition to normal market conditions.
It is a given that once the Fed ceases its purchases, that interest rates will climb significantly higher...most likely back above the 6% area. So instead of a hard transition with a large bump in rates, the Fed is attempting to allow rates to gradually rise. This means that waiting to purchase or refinance will very likely mean a higher interest rate.
Their decision also means that the Fed's remaining purchases will all be lower in quantity, as the remaining allotment for purchases will be spread over a longer period of time - and additionally, will not necessarily be spread out as evenly as their past purchases - which could lead to more volatility for rates in the near term.
In other news, Existing Home Sales and New Home Sales were reported slightly less than expected, but both reports continue to show signs of an improving housing market. The inventory of unsold existing homes fell to its lowest inventory level since April 2007, while the inventory of unsold new homes dropped to its lowest level since January 2007. While some of the decline in new home inventory may be due to builders constructing fewer homes - these reports indicate that the housing market is indeed showing signs of life.
Remember, with home loan rates still low - but slated to increase with the Fed's recent decision - as well as a juicy tax credit for First Time Home Buyers that is going to expire on November 30th, it makes sense to get off the fence if you've been considering a purchase or refinance. Or do you have a family member, neighbor, friend or coworker who might benefit from getting some good home loan advice? I'm always glad to get your referrals, so simply let me know who I might be able to help.
Week of September 21, 2009
INFO THAT HITS US WHERE WE LIVE
Housing starts for new single-family homes and apartments continued their steady rise, up 1.5% for August, their strongest pace in nine months. This puts housing starts at a seasonally adjusted annual rate of 598,000, their highest level since November of last year. This sign of steady improvement in home building made economists even more confident Q3 growth will be positive, signaling the recession is over.
Mortgage rates continue to remain at three-month lows. Freddie Mac's weekly Primary Mortgage Market Survey showed average long-term mortgage rates down for the third week in a row! The 30-year fixed rate mortgage is just above 5% with an average 0.7 point (including the origination fee). And the average rate for 15-year fixed rate mortgages hit a new record low in the Survey. These rates are for prime borrowers with an 80% or lower loan-to-value ratio on loans eligible for purchase by Freddie Mac.
Finally, please remember the $8,000 tax credit for first-time homebuyers is set to expire in just over two months. Those eligible need to close by November 30!
Review of Last Week
HAPPY DAYS ARE NEAR AGAIN... The stock markets continued their upward moves last week, posting gains in four of five sessions and for the week overall. The big news of the week was Fed chief Ben Bernanke announcing, "From a technical perspective, the recession is very likely over." This was followed by billionaire Warren Buffet effectively calling the recession's end, commenting that the economy has "sort of plateaued at the bottom right now." The world's most successful investor added: "I think we're certainly... through the worst of it in residential real estate in all probability."
In addition to these positive pronouncements, investors had some solid economic developments to ponder. Tuesday we had August Retail Sales shooting up 2.7%, easily beating expectations. Excluding the auto sales boost from the government's Cash for Clunkers program, we still had a 1.1% hike for the rest of retail. Retail in fact is up at a 14.3% annual rate over the last three months and up 5.1% if you take out auto sales.
Initial claims for unemployment fell again last week, this time by 12,000, to 545,000. The four-week average of continuing claims dropped too. Meanwhile, the Philadelphia Fed Index, which gauges manufacturing in that region, shot up to +14.1 in September from 4.2 in August. This harmonized nicely with Industrial Production now up two months in a row, at a 10.4% annual rate.
For the week, the Dow ended UP 2.2%, at 9820.20; the S&P 500 shot UP 2.5%, to 1068.30; while the Nasdaq also pushed UP 2.5%, to 2132.86.
Bond prices declined in thin trading, with the market anticipating the record supply that will be on tap at next week's Treasury auctions. The FNMA 30-year 4.5% bond we watch finished down from the previous week's $100.78 close, settling at $100.44. Nonetheless, mortgage rates inched down a bit more, continuing at their historically low levels.
This Week’s Forecast
THE FED AND HOUSING WEIGH IN... The Fed meets this week and although there's no drama around whether they'll raise the rate (they won't), there's will be more than the usual interest in their FOMC statement, coming out Wednesday at 2:15. That's all because of Fed chief Bernanke's recession-ending comments last week. More key housing data comes with the Federal Housing Finance Agency's July Housing Price Index Tuesday, then August Existing Home Sales Thursday and New Home Sales Friday.
Housing starts for new single-family homes and apartments continued their steady rise, up 1.5% for August, their strongest pace in nine months. This puts housing starts at a seasonally adjusted annual rate of 598,000, their highest level since November of last year. This sign of steady improvement in home building made economists even more confident Q3 growth will be positive, signaling the recession is over.
Mortgage rates continue to remain at three-month lows. Freddie Mac's weekly Primary Mortgage Market Survey showed average long-term mortgage rates down for the third week in a row! The 30-year fixed rate mortgage is just above 5% with an average 0.7 point (including the origination fee). And the average rate for 15-year fixed rate mortgages hit a new record low in the Survey. These rates are for prime borrowers with an 80% or lower loan-to-value ratio on loans eligible for purchase by Freddie Mac.
Finally, please remember the $8,000 tax credit for first-time homebuyers is set to expire in just over two months. Those eligible need to close by November 30!
Review of Last Week
HAPPY DAYS ARE NEAR AGAIN... The stock markets continued their upward moves last week, posting gains in four of five sessions and for the week overall. The big news of the week was Fed chief Ben Bernanke announcing, "From a technical perspective, the recession is very likely over." This was followed by billionaire Warren Buffet effectively calling the recession's end, commenting that the economy has "sort of plateaued at the bottom right now." The world's most successful investor added: "I think we're certainly... through the worst of it in residential real estate in all probability."
In addition to these positive pronouncements, investors had some solid economic developments to ponder. Tuesday we had August Retail Sales shooting up 2.7%, easily beating expectations. Excluding the auto sales boost from the government's Cash for Clunkers program, we still had a 1.1% hike for the rest of retail. Retail in fact is up at a 14.3% annual rate over the last three months and up 5.1% if you take out auto sales.
Initial claims for unemployment fell again last week, this time by 12,000, to 545,000. The four-week average of continuing claims dropped too. Meanwhile, the Philadelphia Fed Index, which gauges manufacturing in that region, shot up to +14.1 in September from 4.2 in August. This harmonized nicely with Industrial Production now up two months in a row, at a 10.4% annual rate.
For the week, the Dow ended UP 2.2%, at 9820.20; the S&P 500 shot UP 2.5%, to 1068.30; while the Nasdaq also pushed UP 2.5%, to 2132.86.
Bond prices declined in thin trading, with the market anticipating the record supply that will be on tap at next week's Treasury auctions. The FNMA 30-year 4.5% bond we watch finished down from the previous week's $100.78 close, settling at $100.44. Nonetheless, mortgage rates inched down a bit more, continuing at their historically low levels.
This Week’s Forecast
THE FED AND HOUSING WEIGH IN... The Fed meets this week and although there's no drama around whether they'll raise the rate (they won't), there's will be more than the usual interest in their FOMC statement, coming out Wednesday at 2:15. That's all because of Fed chief Bernanke's recession-ending comments last week. More key housing data comes with the Federal Housing Finance Agency's July Housing Price Index Tuesday, then August Existing Home Sales Thursday and New Home Sales Friday.
Week of September 14, 2009
INFO THAT HITS US WHERE WE LIVE
Last week mortgage applications surged 17%, according to the Mortgage Bankers Association. And it wasn't just re-financings taking advantage of the latest dip in our already low interest rates. Applications for purchase loans were up a very healthy 9.5% from the week before. According to the MBA, the average contract interest rate for a 30-year fixed-rate mortgage was down to just over 5%, with average points inching up to 1.23 (including the origination fee) for 80% loan-to-value mortgages. These rates are of course for prime borrowers with 20% downpayment.
Freddie Mac's weekly survey of conforming mortgages showed rates dropping to similar levels, which is very nice considering a 30-year fixed-rate conforming mortgage averaged 6.35% just a year ago. The benefit to the real estate market is clear. As Freddie Mac chief economist Frank Nothaft put it, "Low mortgage rates are helping to keep housing very affordable." First-time homebuyers enjoy even more affordability, thanks to the $8,000 tax credit, but be sure to remind them they need to close by November 30!
Prices may even be stabilizing. The listing and valuation site Zillow.com reported buyers are getting smaller discounts off seller's listing prices. July purchasers paid just 3.3% below list price vs. an average of 3.5% for June and 4.6% back in January.
Review of Last Week
SHORT WEEK HITS NEW HEIGHTS...There were just four trading days last week, but the stock market made gains on three of them, sending the Dow to a fresh high for the year. The S&P 500 and Nasdaq indexes were also UP for the week, as investors seemed ready to accept more risk in what increasingly appears to be a recovering economy.
But all is not well just yet, as the Fed's Beige Book on Wednesday alleged that employment, consumer spending and construction remain weak. This of course justifies the Fed keeping the funds rate low. But the Beige Book did note the rate of economic decline is slowing and manufacturing shows improvement, as reported here last week. The Trade Balance offered an interesting mixed message. The trade deficit expanded the most in a year. Economists say this shows trade won't add as much to Q3 GDP growth as it has in the past. On the other hand, exports and the overall volume of international trade are up now three months in a row. This revival in exports, some economists feel, signals the US economy is in recovery.
Initial claims for unemployment dropped 26,000 for the week, to 550,000, the second lowest level in the recovery. Continuing unemployment claims dropped by 159,000 to 6.09 million, the lowest level in five months. Both FedEx and Texas Instruments raised their earnings outlooks for the current quarter. Treasury Secretary Geithner told Congress to remove bank bailout money from his budget! And Friday saw the University of Michigan's Consumer Sentiment Index registering a way-higher-than-expected 70.2.
For the week, the Dow ended UP 1.7%, to 9605.41; the S&P 500 shot UP 2.6%, to 1042.73; while the Nasdaq pushed UP 3.1%, to 2080.90.
The bond market held up for the week, with the auctions that went on helping to support prices. The FNMA 30-year 4.5% bond we watch finished up from the previous week's $100.50 close, ending at $100.78. As mentioned above, mortgage rates dipped a trifle more, to near historic levels.
This Week’s Forecast
BUYING AND BUILDING... On the buy side, we'll have August Retail Sales telling us how the all-important consumer is aiding the economic recovery. The August Consumer Price Index (CPI) will show if inflation is hurting that consumer's buying power. Building will be measured on Thursday with August Housing Starts and Building Permits revealed to all
Last week mortgage applications surged 17%, according to the Mortgage Bankers Association. And it wasn't just re-financings taking advantage of the latest dip in our already low interest rates. Applications for purchase loans were up a very healthy 9.5% from the week before. According to the MBA, the average contract interest rate for a 30-year fixed-rate mortgage was down to just over 5%, with average points inching up to 1.23 (including the origination fee) for 80% loan-to-value mortgages. These rates are of course for prime borrowers with 20% downpayment.
Freddie Mac's weekly survey of conforming mortgages showed rates dropping to similar levels, which is very nice considering a 30-year fixed-rate conforming mortgage averaged 6.35% just a year ago. The benefit to the real estate market is clear. As Freddie Mac chief economist Frank Nothaft put it, "Low mortgage rates are helping to keep housing very affordable." First-time homebuyers enjoy even more affordability, thanks to the $8,000 tax credit, but be sure to remind them they need to close by November 30!
Prices may even be stabilizing. The listing and valuation site Zillow.com reported buyers are getting smaller discounts off seller's listing prices. July purchasers paid just 3.3% below list price vs. an average of 3.5% for June and 4.6% back in January.
Review of Last Week
SHORT WEEK HITS NEW HEIGHTS...There were just four trading days last week, but the stock market made gains on three of them, sending the Dow to a fresh high for the year. The S&P 500 and Nasdaq indexes were also UP for the week, as investors seemed ready to accept more risk in what increasingly appears to be a recovering economy.
But all is not well just yet, as the Fed's Beige Book on Wednesday alleged that employment, consumer spending and construction remain weak. This of course justifies the Fed keeping the funds rate low. But the Beige Book did note the rate of economic decline is slowing and manufacturing shows improvement, as reported here last week. The Trade Balance offered an interesting mixed message. The trade deficit expanded the most in a year. Economists say this shows trade won't add as much to Q3 GDP growth as it has in the past. On the other hand, exports and the overall volume of international trade are up now three months in a row. This revival in exports, some economists feel, signals the US economy is in recovery.
Initial claims for unemployment dropped 26,000 for the week, to 550,000, the second lowest level in the recovery. Continuing unemployment claims dropped by 159,000 to 6.09 million, the lowest level in five months. Both FedEx and Texas Instruments raised their earnings outlooks for the current quarter. Treasury Secretary Geithner told Congress to remove bank bailout money from his budget! And Friday saw the University of Michigan's Consumer Sentiment Index registering a way-higher-than-expected 70.2.
For the week, the Dow ended UP 1.7%, to 9605.41; the S&P 500 shot UP 2.6%, to 1042.73; while the Nasdaq pushed UP 3.1%, to 2080.90.
The bond market held up for the week, with the auctions that went on helping to support prices. The FNMA 30-year 4.5% bond we watch finished up from the previous week's $100.50 close, ending at $100.78. As mentioned above, mortgage rates dipped a trifle more, to near historic levels.
This Week’s Forecast
BUYING AND BUILDING... On the buy side, we'll have August Retail Sales telling us how the all-important consumer is aiding the economic recovery. The August Consumer Price Index (CPI) will show if inflation is hurting that consumer's buying power. Building will be measured on Thursday with August Housing Starts and Building Permits revealed to all
Week of September 7, 2009
INFO THAT HITS US WHERE WE LIVE
We had more good news for housing last week with Pending Home Sales UP 3.2% for July, gaining ground for the sixth month in a row!This positive number should point to yet another hike when August Existing Homes Sales numbers come out. There was also encouraging construction data, as July single-family home building was UP 7% – the largest monthly increase since 1983, when housing boomed coming out of the 1981–1982 downturn. The combination of affordability, low mortgage rates and the $8,000 tax credit for first-time homebuyers is having a terrific effect on the housing market. Unfortunately, that tax credit will expire November 30 unless Congress elects to extend it. Let's hope they do.
Speaking of mortgage rates, these dropped nicely last week, according to Freddie Mac's Primary Mortgage Market Survey. Nationally, the 30-year fixed rate mortgage averaged 5.08% with an average of 0.7 point. That was down from 6.35% a year ago! These rates are for prime borrowers who can put 20% down and who qualify for loans eligible to be purchased or guaranteed by Freddie Mac or Fannie Mae.
Review of Last Week
OFF FOR THE HOLIDAY... The market took a break from its steady move upward, dropping on good economic news, then rallying despite some negative employment data, but still closing a bit down for the week. For the year, the Dow is still UP 7.6%, the S&P 500 UP 12.5% and the Nasdaq UP a whopping 28.0%.
The good news that oddly sent stock prices south included the fantastic Pending Homes Sales and single-family home construction numbers mentioned above. You can add to that BOTH Chicago PMI and ISM Manufacturing readings showing US manufacturing is now expanding. That's right. Manufacturing is starting to grow. The ISM Services Index did not yet indicate growth but it did rise for August, showing business activity in the non-manufacturing sector increasing for the first time since September 2008.
August employment hit Friday. We'll do the worst first. The unemployment rate went to 9.7%, a new high we haven't seen since 1982, but still well below that year's 10.8%. But the 216,000 drop in non-farm payrolls was better than expected. And private-sector payrolls fell by 198,000, their smallest decline in a year. Other good signs included average hourly earnings up for the second straight month, registering their largest gains so far this year. Some economists feel payrolls could start expanding by year's end. They observe that with corporate profits up 24% annually in the first six months, businesses are now able to expand payrolls. We hope so.
For the week, the Dow was down 1.1%, to 9441.27; the S&P 500 dropped 1.2%, to 1016.40; while the Nasdaq slid just 0.5%, to 2018.78.
Bond prices did OK most of the week, then sunk a bit Friday as the stock market rallied in spite of the not-so-great jobs report. Nevertheless, the price of the FNMA 30-year 4.5% bond we watch finished up from the previous week's $100.19 close, ending at $100.50. As noted above, mortgage rates were down for the week, to very nice levels.
This Week’s Forecast
SHORT AND SWEET... With Labor Day on Monday, we have just four days of trading and not a whole lot of economic news. The jobs story will continue, as we monitor weekly initial jobless claims and take a look to see if continuing claims will drop. The Trade Balance will tell us how we're doing in the global marketplace, then the week ends with another reading of the mind of the all-important consumer, this time using the University of Michigan Consumer Sentiment Index
Call me for any Help you need!
We had more good news for housing last week with Pending Home Sales UP 3.2% for July, gaining ground for the sixth month in a row!This positive number should point to yet another hike when August Existing Homes Sales numbers come out. There was also encouraging construction data, as July single-family home building was UP 7% – the largest monthly increase since 1983, when housing boomed coming out of the 1981–1982 downturn. The combination of affordability, low mortgage rates and the $8,000 tax credit for first-time homebuyers is having a terrific effect on the housing market. Unfortunately, that tax credit will expire November 30 unless Congress elects to extend it. Let's hope they do.
Speaking of mortgage rates, these dropped nicely last week, according to Freddie Mac's Primary Mortgage Market Survey. Nationally, the 30-year fixed rate mortgage averaged 5.08% with an average of 0.7 point. That was down from 6.35% a year ago! These rates are for prime borrowers who can put 20% down and who qualify for loans eligible to be purchased or guaranteed by Freddie Mac or Fannie Mae.
Review of Last Week
OFF FOR THE HOLIDAY... The market took a break from its steady move upward, dropping on good economic news, then rallying despite some negative employment data, but still closing a bit down for the week. For the year, the Dow is still UP 7.6%, the S&P 500 UP 12.5% and the Nasdaq UP a whopping 28.0%.
The good news that oddly sent stock prices south included the fantastic Pending Homes Sales and single-family home construction numbers mentioned above. You can add to that BOTH Chicago PMI and ISM Manufacturing readings showing US manufacturing is now expanding. That's right. Manufacturing is starting to grow. The ISM Services Index did not yet indicate growth but it did rise for August, showing business activity in the non-manufacturing sector increasing for the first time since September 2008.
August employment hit Friday. We'll do the worst first. The unemployment rate went to 9.7%, a new high we haven't seen since 1982, but still well below that year's 10.8%. But the 216,000 drop in non-farm payrolls was better than expected. And private-sector payrolls fell by 198,000, their smallest decline in a year. Other good signs included average hourly earnings up for the second straight month, registering their largest gains so far this year. Some economists feel payrolls could start expanding by year's end. They observe that with corporate profits up 24% annually in the first six months, businesses are now able to expand payrolls. We hope so.
For the week, the Dow was down 1.1%, to 9441.27; the S&P 500 dropped 1.2%, to 1016.40; while the Nasdaq slid just 0.5%, to 2018.78.
Bond prices did OK most of the week, then sunk a bit Friday as the stock market rallied in spite of the not-so-great jobs report. Nevertheless, the price of the FNMA 30-year 4.5% bond we watch finished up from the previous week's $100.19 close, ending at $100.50. As noted above, mortgage rates were down for the week, to very nice levels.
This Week’s Forecast
SHORT AND SWEET... With Labor Day on Monday, we have just four days of trading and not a whole lot of economic news. The jobs story will continue, as we monitor weekly initial jobless claims and take a look to see if continuing claims will drop. The Trade Balance will tell us how we're doing in the global marketplace, then the week ends with another reading of the mind of the all-important consumer, this time using the University of Michigan Consumer Sentiment Index
Call me for any Help you need!
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