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Monday, December 26, 2011

Inside Lending Newsletter From Theron Wall

 

Inside Lending from Theron Wall

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Theron Wall

Theron Wall
Sr. Mortgage Consultant
1575 Plaza West Drive, Suite C
Prescott, AZ 86303
Office: 928.445.8730
Fax: 928.445.1065
Cell: 928.533.7473

Wallick & Volk Mortgage

For the week of December 27, 2011 – Vol. 9, Issue 52

Happy New Year!

>> Market Update 

QUOTE OF THE WEEK..."...never retreat, never retract...never admit a mistake."--Napoleon Bonaparte

INFO THAT HITS US WHERE WE LIVE
...Wisely, the National Association of Realtors (NAR) did not follow the diminutive Emperor's advice last week, admitting they uncovered some mistakes in the statistical model used to estimate national Existing Home Sales the past few years. They therefore had to revise those sales down 14%, to a 4.42 million annual rate in November. Nevertheless, Existing Home sales were UP 4% for the month and UP 12% versus a year ago. And the inventory is down 18% versus last year, now at a 7 months' supply!

In line with that, Housing Starts were UP 9.3% for November and UP 24.3% versus a year ago, while Building Permits were UP 5.7% for the month. November New Home Sales came in Friday UP 1.6%, with the supply dropping to 6 months, its lowest level since early 2006! The numbers of unsold new homes under construction and unsold completed new homes are also at or near record lows. The FHFA price index for homes financed by conforming mortgages was down just 0.2% in October and is down only 2.8% versus a year ago.

BUSINESS TIP OF THE WEEK
...Start on a goal right away. Get the momentum going by taking action immediately--flesh out the schedule, reserve important dates, get delivery commitments from others.

>> Review of Last Week

SANTA CAME EARLY...It was a little early for a "Santa Claus rally" (see below), but it sure seemed like the big man in red was giving Wall Street investors a nice holiday gift--to wit, a better than 3.5% weekly gain in stock prices, recouping the prior week's slide. Recent European worries were assuaged by improving German sentiment data, an encouraging Spanish bond auction and the European Central Bank's Long-term Refinancing Operation (LTRO), which promised greater stability in the region, at least for awhile.
 
We also had better economic news on our side of the pond. Initial jobless claims dropped to 364,000, the lowest level since April 2008, and continuing claims dropped to 3.55 million, the lowest since September 2008. Durable Goods orders were up 3.8% in November, beating expectations. On the inflation front, Core PCE Prices were up just 0.1% in November and well within the Fed's target range, at 1.7% for the year. But Q3 GDP was revised down to a sobering 1.8%.

For the week, the Dow ended UP 3.6%, at 12294; the S&P 500 shot UP 3.7%, to 1265; and the Nasdaq went UP 2.5%, to 2619.


As stocks soared, it was a tough week in the bond market. The FNMA 3.5% bond we watch ended the week down .90, to $101.32. But national average fixed mortgage rates remained at or near their all-time record lows according to Freddie Mac's weekly survey.

DID YOU KNOW?
...A "Santa Claus rally" is a rise in stock prices that sometimes occurs the week after Christmas. It often anticipates the "January Effect"--a rise in stock prices the first month of the year.

>> This Week’s Forecast

YEAR ENDING ON HOME SALES PENDING...Thursday's Pending Home Sales for November, indicating how actual sales might go the next few months, should be up slightly. December Consumer Confidence is also forecast up a bit, perhaps due to the slowly improving jobs picture, with weekly Initial Unemployment Claims predicted to remain below 400,000. The Chicago PMI, a bellwether for manufacturing overall, is expected to stay in expansion mode.

Next Monday, January 2, 2012, the stock market will be closed in observance of New Year's Day. May the coming year bring all the best to you and yours!

>> 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 Dec 26 – Dec 30

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

Tu
Dec 27

10:00

Consumer Confidence

Dec

58.0

56.0

Moderate

Th
Dec 29

08:30

Initial Unemployment Claims

12/24

368K

364K

Moderate

Th
Dec 29

08:30

Continuing Unemployment Claims

12/17

3.600M

3.546M

Moderate

Th
Dec 29

09:45

Chicago PMI 

Dec.

60.1

62.6

HIGH

Th
Dec 29

10:00

Pending Home Sales

Nov

0.6%

10.4%

Moderate

Th
Dec 29

11:00

Crude Inventories

12/24

NA

-10.570M

Moderate

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months...There are virtually no economists who expect the Fed to hike the Funds Rate any time in the near future. 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 25

0%–0.25%

Mar 13

0%–0.25%

Apr 25

0%–0.25%


Probability of change from current policy:

After FOMC meeting on:

Consensus

Jan 25

     <1%

Mar 13

     <1%

Apr 25

     <1%

 

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




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