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Monday, August 26, 2013

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 August 26, 2013 – Vol. 11, Issue 34

 

>> Market Update

QUOTE OF THE WEEK... "Obstacles are those frightful things you see when you take your eyes off your goal.'" --Henry Ford, American industrialist 

INFO THAT HITS US WHERE WE LIVE
... The week ended with what some saw as an obstacle to reaching our goal of a full housing recovery. New Home Sales were reported down 13.4% in July to a 394,000 unit annual rate, well below consensus expectations. A disappointing report to be sure, but not the end of the recovery. We may have had one bad month, but we're still on an upward trend, with new home sales up 6.8% and the median new home price up 8.3% versus a year ago. Also, the recent growth of existing home inventories is drawing buyers away from new homes.

Evidence of that buyer interest in existing homes came Wednesday with the news that Existing Home Sales grew 6.5% in July, at a 5.39 million annual rate. That's the strongest pace since November 2009, and sales are now up 17.2% from a year ago. The median price dipped slightly, but is still up 13.7% versus a year ago. It was great to see sales up in all regions of the country, with single family homes leading the way, although condo/coop sales also gained. The FHFA index of prices for homes financed by conforming mortgages gained 0.6% in June and is up 7.8% in the past year. 

BUSINESS TIP OF THE WEEK... In social media marketing, grabbing people's attention is the key to success. Say something different, show something special, teach something terrific. Or just look at your competitors' efforts and do the opposite.

>> Review of Last Week

SECOND-GUESSING THE FED... It was a mixed week on Wall Street, as the S&P 500 and the Nasdaq snapped their two-week losing streaks, but the Dow dropped for the third week in a row. The focus was on how soon the Fed would begin tapering its bond buying program designed to keep interest rates down. Investors fear the economy is not strong enough yet for higher rates, but Fed meeting minutes released on Wednesday indicated tapering could begin in September. Freddie Mac's chief economist observed, "Several members expressed confidence the housing recovery would be resilient in the face of higher rates."

Investors were happier on Friday following comments at the Fed's conference near Jackson Hole, Wyoming. One FOMC member felt they should proceed with caution, while another said there's no reason to hurry tapering bond purchases. Friday's deep drop in New Home Sales for July was looked at by the markets as another data point to support deferring tapering for now. The jobs situation watched closely by the Fed also remains iffy. Weekly Initial Unemployment Claims increased by 13,000, to 336,000, and Continuing Claims went up by 29,000 to just a tick under 3 million. 

The week ended with the Dow down 0.5%, to 15011; the S&P 500 up 0.5%, to 1664; and the Nasdaq up 1.5%, to 3658.

Friday's weak New Home Sales report for July boosted bonds on Friday. The FNMA 3.5% bond we watch ended the week up .09, to $99.10. Freddie Mac's Primary Mortgage Market Survey showed average fixed mortgage rates edging higher for the week ending August 22. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information. The Mortgage Bankers Association purchase loan index was up 1% for the week ending August 16.

DID YOU KNOW?
... Residential construction employment is up 4.5% year-over-year, compared to overall employment growth of just 1.7%. 

>> This Week's Forecast

PENDING HOME SALES, GDP, MIDWEST MANUFACTURING UP, INFLATION OK... After their dip in June, Pending Home Sales are expected to recover in July. This measure of contracts signed on existing homes indicates the housing recovery should continue on course. Thursday's GDP – Second Estimate is forecast to show a slightly higher growth rate for the economy in Q2, nudging just north of 2%.

The week ends with Core PCE Prices predicted to remain within the Fed's inflation guidelines. The Chicago PMI should show manufacturing in the Midwest continuing to expand at a slightly higher pace.

>> 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 Aug 26 – Aug 30

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

M
Aug 26

08:30

Durable Goods Orders

Jul

–5.0%

3.9%

Moderate

Tu
Aug 27

10:00

Consumer Confidence

Aug

77.0

80.3

Moderate

W
Aug 28

10:00

Pending Home Sales

Jul

0.2%

–0.4%

Moderate

W
Aug 28

10:30

Crude Inventories

8/24

NA

–1.428M

Moderate

Th
Aug 29

08:30

Initial Unemployment Claims

8/24

330K

336K

Moderate

Th
Aug 29

08:30

Continuing Unemployment Claims

8/17

2.969M

2.999M

Moderate

Th
Aug 29

08:30

GDP – 2nd estimate

Q2

2.1%

1.7%

Moderate

Th
Aug 29

08:30

GDP Deflator – 2nd estimate

Q2

0.7%

0.7%

Moderate

F
Aug 30

08:30

Personal Income

Jul

0.1%

0.3%

Moderate

F
Aug 30

08:30

Personal Spending

Jul

0.3%

0.5%

HIGH

F
Aug 30

08:30

PCE Prices – Core

Jul

0.2%

0.2%

HIGH

F
Aug 30

09:45

Chicago PMI

Aug

53.0

52.3

HIGH

F
Aug 30

09:55

U. of Michigan Consumer Sentiment – Final

Aug

80.0

80.0

Moderate

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months... The Fed may start tapering its bond buying program soon, but no one expects the Funds Rate to move from its super low level until 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:

Consensus

Sep 18

0%–0.25%

Oct 30

0%–0.25%

Dec 18

0%–0.25%


Probability of change from current policy:

After FOMC meeting on:

Consensus

Sep 18

     <1%

Oct 30

     <1%

Dec 18

     <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 this message 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. The material does not represent the opinion of Wallick & Volk Mortgage. BK 0018295 NMLS #256412



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MCID900139960

 

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