News for Prescott AZ - AmericanTowns.com

Monday, January 03, 2011

Inside Lending Newsletter From Theron Wall

 

Inside Lending from Theron Wall

visit my website     email me now

Theron Wall

Theron Wall
Branch Manager
3615 Crossings Dr, Suite A
Prescott, AZ 86305
Phone: (928) 778-7167
Mobile: (928) 533-7473
Fax: (928) 445-5308

Wallick & Volk Mortgage

For the week of January 3, 2011 – Vol. 9, Issue 1

>> Market Update 

INFO THAT HITS US WHERE WE LIVE  Last week saw the year finish on a high note for the housing market with Pending Home Sales for November coming in UP 3.5%, after this figure was expected to be down slightly for the month. This reading measures homes under contract, and therefore should point to an increase in closings in the January-February time frame.

The positive Pending Home Sales report was particularly welcome after Tuesday's Standard & Poor's/Case-Shiller Home Price Index for October. Their 20-City Composite Index registered a 0.8% price decline year-over-year. Some say this threatens a "double dip" in housing prices, an interesting observation now that the "double dip" recession threat has all but evaporated.

The negative talk ignored the facts that 4 of the 20 cities showed annual price GAINS and the index is still above its spring 2009 low. In addition, the Case-Shiller 10-City Index showed a year-over-year price gain. It's important to remember that real estate is local and these indexes average only 10 or 20 metro areas. Some analysts feel home prices have bottomed in most markets and a few intrepid observers are even predicting a strong comeback for housing in 2011!

>> Review of Last Week

UP TWO YEARS IN A ROW... Investors have been encouraged by recent signs of improvement in the economic situation. Not surprisingly, the stock markets closed out the year UP for the second year in a row. For 2010, the Dow Jones Industrial Average posted an 11% gain. The broader-based S&P 500 index ended UP 12.8%, and the Nasdaq Composite moved UP a hefty 16.9% from where it was 12 months ago. For the week, all three indexes were basically flat with light trading volumes. 

Not all the economic signs were rosy, however, as Consumer Confidence for December dropped to 52.5 from its 54.1 level in November. This was also well below the consensus estimate. As covered above, the October Case-Shiller home price index had its disappointments as well, although November Pending Homes Sales numbers gave us hope about a boost in closings in the next month or two.

Other good news included the Chicago PMI index for December, unexpectedly UP well above estimates, reaching 68.6 versus November's 62.5. This indicates continued strong growth in manufacturing in that part of the country. Initial weekly jobless claims dropped below the 400,000 level, coming in way better than consensus forecasts, at 388,000. This was well under the prior week's 420,000 initial claims and continues the downward trend of the last few weeks. We're of course still not where we should be with jobs, although finally moving in the right direction.

For the week, the Dow ended up 5 points, at 11,578; the S&P 500 edged up a point, to 1,258; and the Nasdaq was off 0.5%, ending at 2,653. (Note: we've dropped the decimals and rounded the indexes to their nearest whole numbers.)


The bond market swung up and down like a yo-yo all week. But the FNMA 30-year 4.0% bond we watch ultimately finished UP 101 basis points, closing at $99.18. Average fixed-rate mortgage rates also ticked up, but stayed "incredibly low," according to Freddie Mac's weekly survey of conforming mortgages. Their chief economist observed that for the year, 30-year fixed mortgage rates reported "...the lowest annual average since 1955, when the average price of a home was $22,000." But with possible rate increases, people who want to buy or refinance should not waste time.

>> This Week’s Forecast

WHAT THE FED SAID AND EMPLOYERS DID... We start the new year by finding out Tuesday what the Fed said about the economic situation as recorded in the Minutes of their December 14 FOMC meeting. Subsequently, we'll find out what employers did about creating new jobs in Friday's December Employment Report. An increase of 132,000 jobs is expected, although that won't be enough to lower the unemployment rate, with new people coming into the labor force.

We'll also have a look at the health of US manufacturing in Monday's ISM Index and the non-manufacturing sector in Wednesday's ISM Services Index. Both should remain comfortably above 50, indicating continued business expansion. Hopefully, a happy new year begins.

>> 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.

Economic Calendar for the Week of January 3 – January 7

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

M
Jan 3

10:00

ISM Index

Dec

57.3

56.6

HIGH

Tu
Jan 4

14:00

FOMC Minutes

12/14

NA

NA

HIGH

W
Jan 5

10:00

ISM Services

Dec

55.7

55.0

Moderate

W
Jan 5

10:30

Crude Inventories

1/1

NA

-1.26M

Moderate

Th
Jan 6

08:30

Initial Unemployment Claims

1/1

405K

388K

Moderate

Th
Jan 6

08:30

Continuing Unemployment Claims

12/25

4.070M

4.128M

Moderate

F
Jan 7

08:30

Average Workweek

Dec

34.3

34.3

HIGH

F
Jan 7

08:30

Hourly Earnings

Dec

0.1%

0.0%

HIGH

F
Jan 7

08:30

Nonfarm Payrolls

Dec

132K

39K

HIGH

F
Jan 7

08:30

Unemployment Rate

Dec

9.8%

9.8%

HIGH

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months  Economists still expect the Fed to keep the Funds Rate at its super low level for the first few months of the new year. Things could change in the second half, with a strengthening economy or the threat of inflation. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:

Consensus

Jan 26

0%–0.25%

Mar 15

0%–0.25%

Apr 27

0%–0.25%


Probability of change from current policy:

After FOMC meeting on:

Consensus

Jan 26

     <1%

Mar 15

     <1%

Apr 27

     2%

 

This e-mail is an advertisement for Theron Wall. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property of Wallick & Volk Mortgage and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of Wallick & Volk Mortgage. BK 0018295 NMLS #256412




  

 

This is not the opinion of Brad Bergamini, Realty Executives Northern Arizona or any of its affiliates.  This post is for informational purpose only and is not guaranteed and does not render as legal advice.  Buying and selling Real Estate in Arizona or Prescott Arizona is a serious task and should be consulted with personally with Realtor or Real Estate Attorney.  Please visit my website for contact information

http://bradbergamini.com or http://everythingprescott.com

 

 

Post a Comment

Brad Bergamini, real estate agent on Zillow

Share Prescott Real Estate News

Bookmark and Share

Prescott Real Estate on YouTube

Loading...

Brad Bergamini's answers on Trulia Voices

PRESCOTT, Arizona area homes for sale and listings from Brad Bergamini