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Monday, April 23, 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 23, 2012 – Vol. 10, Issue 17

 

>> Market Update 

QUOTE OF THE WEEK..."A great pleasure in life is doing what people say you cannot do." --Walter Bagehot, English businessman, essayist and journalist

INFO THAT HITS US WHERE WE LIVE
... People say home building can't recover any time soon. Yet the signs continue to mount that a recovery is underway. Off 5.8% for March, Housing Starts are up 10.3% from a year ago, to a 654,000 unit annual rate. The monthly drop came from volatile multi-family starts, while single-family units were down only 0.2%. And the number of homes under construction was up for the seventh month in a row! Even Building Permits are up 30.1% versus a year ago. It's early in the home building recovery, but some are saying we could get to 1.5 million units by 2016.

More signs the housing market is recovering slowly but surely came with March Existing Home Sales. Although off 2.6% for the month, at 4.48 million units, they're up 5.2% over a year ago. In addition, the median price rose in March to $163,800 and is up 2.5% over a year ago, while the months' supply of inventory stayed at 6.3. Frankly, no one expects a big bump in home sales soon, but the market is definitely beginning to heal, as it's obviously a great time to buy. 

BUSINESS TIP OF THE WEEK
... Take time to think. Get away from the day's chaos and ponder a while. Don't worry if a great idea doesn't come right away. Back on the job, your subconscious will continue to work.

>> Review of Last Week

UP AND DOWN... Markets went in both directions last week as the S&P 500, a broad market measure, clung to a fractional 0.6% gain, its first move upward in three weeks. Traders' moods were also up and down, as the economic data rolled in. The up mood was fueled by the strong earnings reports of a wide range of players, from McDonald's to GE to Microsoft. Also up were March Retail Sales, gaining a better than expected 0.8% and up 6.5% over a year ago!

But other things economic were downers. Both the Empire State and Philadelphia Fed manufacturing indexes dropped for the month, reflecting a slowdown in growth. Industrial production was flat and manufacturing capacity edged down, both worse than expected. Worse than that, weekly unemployment claims headed up to 386,000, while continuing claims hit 3.30 million.

For the week, the Dow ended UP 1.4%, at 13029; the S&P 500 closed UP 0.6%, to 1379; and the Nasdaq edged down 0.4%, to 3000. 


There was enough political and economic turbulence coming out of Europe to keep investors in the safe haven of bonds. This held prices up, with the FNMA 3.5% bond finishing the week UP .04, at $103.19. Inflation fears were kept in check as doubts about the economic recovery continue. So national average mortgage rates held steady, still at historically low levels, as reported in Freddie Mac's weekly Primary Mortgage Market Survey. 

DID YOU KNOW?
...  CPI inflation is more widely reported, but the GDP Price Deflator is often the inflation measure of choice for economists. It takes a more comprehensive look at price levels for a more precise read on inflation.

>> This Week’s Forecast

NEW HOME SALES, PENDING HOME SALES AND THE FED... We'll have more reads on the housing market, with Tuesday's New Home Sales forecast to be up slightly for March. Thursday's Pending Home Sales, measuring signed contracts in March for existing homes, are expected up a bit, indicating sales a few months out.

The Fed meets Wednesday and although no one expects the FOMC Rate Decision to change anything, we'll have a policy statement giving their opinion on the economy. For hard numbers, we'll have to wait until Friday for Q1 GDP-Advanced, projected to show economic growth slowing.

>> 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 23 – Apr 27

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

Tu
Apr 24

10:00

Consumer Confidence

Apr

69.5

70.2

Moderate

Tu
Apr 24

10:00

New Home Sales

Mar

320K

313K

Moderate

W
Apr 25

08:30

Durable Goods Orders

Mar

-1.9%

2.4%

Moderate

W
Apr 25

10:30

Crude Inventories

04/21

NA

3.856M

Moderate

W
Apr 25

12:30

FOMC Rate Decision

04/25

0%-0.25%

0%-0.25%

HIGH

Th
Apr 26

08:30

Initial Unemployment Claims

04/21

373K

386K

Moderate

Th
Apr 26

08:30

Continuing Unemployment Claims

04/14

3.300M

3.297M

Moderate

Th
Apr 26

10:00

Pending Home Sales

Mar

0.5%

-0.5%

Moderate

F
Apr 27

08:30

GDP-Advance

Q1

2.6%

3.0%

Moderate

F
Apr 27

08:30

GDP Price Deflator-Advance

Q1

2.2%

0.9%

Moderate

F
Apr 27

08:30

Employment Cost Index

Q1

0.5%

0.4%

HIGH

F
Apr 27

09:55

Univ. of Michigan Consumer Sentiment-Final

Apr

75.7

75.7

Moderate

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months... We'll see if this week's Fed meeting gives any indication of when they'll change their super low Funds Rate policy. No one sees a hike any time soon. 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

Jun 20

0%–0.25%

Jul 31

0%–0.25%

Sep 12

0%–0.25%


Probability of change from current policy:

After FOMC meeting on:

Consensus

Jun 20

     <1%

Jul 31

     <1%

Sep 12

     <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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