Prescott Real Estate News Blog's purpose is to keep current, past, and potential clients apprised of the real estate market conditions for the Prescott, Arizona Area. National and state news and events will be posted but special emphasis will be placed on Prescott Area and the Yavapai County - Prescott, Prescott Valley, Chino Valley, Dewey and Kirkland/Skull Valley.
-Prescott Real Estate News
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
For the week of June 4, 2012 – Vol. 10, Issue 23
>> Market Update
QUOTE OF THE WEEK..."What we see depends mainly on what we look for." --John Lubbock, British banker, politician, naturalist and archaeologist INFO THAT HITS US WHERE WE LIVE... Those looking for healing in the housing market needed to see past April's 5.5% dip in Pending Home Sales and focus on the 14.4% gain in the index compared to a year ago. The small drop ended a three month run of monthly gains, but we've now had annual gains for 12 months straight! The National Association of Realtors' chief economist stated, "Housing market activity has clearly broken out at notably higher levels and is on track to see the best performance since 2007."
The S&P/Case-Shiller home price index for the 20 biggest metros, was up 0.1% (seasonally adjusted) in March, offering more evidence of a real-estate market on the mend. The annual rate of change declined in only three of 20 metros. The chairman of the Index Committee at S&P said, "This is what we need for a sustained recovery: monthly increases coupled with improving annual rates of change." BUSINESS TIP OF THE WEEK... You want to be there when folks are ready to buy. Build trustful relationships by sharing valuable information with prospects. People buy from people they know, like and trust.
>> Review of Last Week
BAD JOBS... Friday's jobs report showed a meager growth in payrolls during May. This sent investors on a selling spree that resulted in the stock market's worst day in 6 months and wiped out the Dow's entire gain for the year. One of the worst US employment reports of the past year revealed a gain of just 69,000 nonfarm payrolls and the unemployment rate back up to 8.2%. Even worse, downward revisions to the March/April jobs reports meant overall payrolls were up by only 20,000 jobs.
Other economic disappointments includeda drop in Consumer Confidence and a downward revision of Q1 GDP to an anemic 1.9% growth rate. Weekly initial jobless claims went up to 383,000, while the ISM Manufacturing index dropped, though it stayed in expansion territory, a good thing. Other positive signs included a 0.2% gain in personal income for April and inflation still under control, with Core PCE up just 0.1%.
For the week, the Dow ended down 2.7%, at 12119; the S&P 500 closed down 3.0%, to 1278; and the Nasdaq ended down 3.2%, to 2747.
Weak data from China, Europe and the U.S. rekindled fears of a global slowdown. The consequent flight to safety pushed bond prices up and sent yields tumbling to record lows. The FNMA 3.5% bond we watch finished the week UP 1.00, at $105.11. With mortgage bond prices gaining, mortgage rates sank to new lows in Freddie Mac's weekly survey. The national average 30-year fixed mortgage rate hit an all-time trough for the fifth straight week.
DID YOU KNOW?... A consumer reporting agency, or credit bureau, collects information about the creditworthiness of individuals to create a credit score and report. Lenders buy these reports to help them decide how much credit to extend to a borrower.
>> This Week’s Forecast
READS ON THE SERVICES SECTOR, TRADE BALANCE, PLUS SOME FED VIEWS... It's a quiet week for economic data, but there will be a read on the services sector of the economy, accounting for well over 80% of our jobs. Tuesday's ISM Services is forecast down slightly for May, but still over 50, showing continued, if slow, growth. Friday, the Trade Balance for April is expected to shrink a bit from the blowout level it achieved in March.
The Fed's Beige Book will share anecdotal views of the economy from Fed regions around the country. Could offer some useful views, you never can tell.
>> 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 Jun 4 – Jun 8
Tu Jun 5
W Jun 6
W Jun 6
W Jun 6
Fed's Beige Book
Th Jun 7
Initial Unemployment Claims
Th Jun 7
Continuing Unemployment Claims
F Jun 8
>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months... With the economy still in the doldrums and inflation under control, economists expect the Fed to keep rates super low well into next year. 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:
Probability of change from current policy:
After FOMC meeting on:
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