News for Prescott AZ - AmericanTowns.com

Monday, April 09, 2012

Inside Lending Newsletter From Theron Wall

 

 

Inside Lending from Theron Wall

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Theron Wall

Theron Wall
Sr. Mortgage Consultant
3767 Karicio Lane, Ste B
Prescott, AZ 86303
Office: 928.445.8730
Fax: 928.445.1065
Cell: 928.533.7473

Wallick & Volk Mortgage

For the week of April 9, 2012 – Vol. 10, Issue 15

 

>> Market Update 

QUOTE OF THE WEEK..."You miss 100% of the shots you don't take." --Wayne Gretzky, hockey's all-time leading goal scorer

INFO THAT HITS US WHERE WE LIVE
... Hopefully, more people will be taking a shot at buying a home, with home ownership regaining its appeal as rents head higher. A real estate research firm reported average apartment rents UP 2.7% last year, while the national vacancy rate went below 5% for the first time since 2001. Increasing rents, plus very
affordable home prices and near record low mortgage rates, have made home buying cheaper than renting in most areas, spurring on first-time buyers. 

A major bank
housing analyst said apartment rental costs have historically been about 10% lower than after-tax home ownership costs. That difference began shrinking in 2010 and now apartment rents are about 15% higher than home ownership costs. A new survey found that twice as many real estate professionals, compared to three months ago, expect home values to rise. The housing market appears to be stabilizing as home sales trend upward and homebuilders are more optimistic than they've been in years.

BUSINESS TIP OF THE WEEK
... Focus your networking on the people who have referred business to you or made advantageous introductions. Stay in contact every three months to stay top-of-mind with these important contacts.

>> Review of Last Week

SLIPPING INTO Q2... In a not-so-wonderful start to the second quarter, the Dow suffered its worst weekly loss since last December, while the S&P500 and the Nasdaq also went lower. FOMC Minutes from the last Fed meeting left investors uncertain about monetary policy, while there were renewed concerns about Spain's sovereign debt. The ISM Services index, measuring the largest sector of our economy, dipped more than expected, but stayed in positive growth territory, as did the better-than-expected ISM Manufacturing index.

Friday, equity markets were closed, but the government's disappointing jobs report ended the week on a downer for us all.
Just 120,000 new jobs were created in March, hugely below expectations. The unemployment rate crept down from 8.3% to 8.2%, but economists explained that was because more people are becoming discouraged and dropping out of the work force.

For the week, the Dow ended down 1.2%, at 13060; the S&P 500 closed down 0.7%, to 1398; and the Nasdaq edged down 0.4%, to 3081. 


Following the weak jobs report, investors sought the safe haven of bonds in Friday's holiday-shortened session. Bond prices surged, with the FNMA 3.5% bond we watch finishing the week UP .92, to $103.16. National average mortgage rates eased again last week, according to Freddie Mac's weekly survey. Purchase loan demand rose to its highest level in months. 

DID YOU KNOW?
... The typical home purchased in 2011 was built in 1993, with
three bedrooms and two bathrooms in 1900 square feet of space, as reported in the latest NAR survey. 

>> This Week’s Forecast

BUDGET, FED VIEWS, INFLATION... Wednesday's March Federal Budget should show the government running a big deficit, no surprise there. This will be followed by the Federal Reserve's Beige Book of economic observations from Fed districts around the country. Could be some good stuff.

But the big reports will be PPI wholesale inflation on Thursday and CPI consumer inflation come Friday. The monthly numbers are expected to reflect annual inflation rates slightly above the Fed's 2% target. This is not good, as inflation cuts consumer buying power, sends mortgage bond prices lower -- and mortgage rates up!

>> 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 Apr 9 – Apr 13

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

W
Apr 11

10:30

Crude Inventories

04/07

NA

9.009M

Moderate

W
Apr 11

14:00

Federal Budget

Mar

NA

–$188.2B

Moderate

W
Apr 11

14:00

Fed's Beige Book

Apr

NA

NA

Moderate

Th
Apr 12

08:30

Initial Unemployment Claims

04/07

355K

357K

Moderate

Th
Apr 12

08:30

Continuing Unemployment Claims

03/31

3.350M

3.338M

Moderate

Th
Apr 12

08:30

Producer Price Index (PPI)

Mar

0.3%

0.4%

Moderate

Th
Apr 12

08:30

Core PPI

Mar

0.2%

0.2%

Moderate

Th
Apr 12

08:30

Trade Balance

Feb

–$52.0B

–$52.6B

Moderate

F
Apr 13

08:30

Consumer Price Index (CPI)

Mar

0.3%

0.4%

HIGH

F
Apr 13

08:30

Core CPI

Mar

0.2%

0.1%

HIGH

F
Apr 13

09:55

Univ. of Michigan Consumer Sentiment

Apr

76.1

76.2

Moderate

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months... The Fed said it intends to keep the Funds Rate low for quite some time, which is what economists expect. 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

Apr 25

0%–0.25%

Jun 20

0%–0.25%

Jul 31

0%–0.25%


Probability of change from current policy:

After FOMC meeting on:

Consensus

Apr 25

     <1%

Jun 20

     <1%

Jul 31

     <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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