News for Prescott AZ - AmericanTowns.com

Monday, November 11, 2013

Inside Lending Newsletter From Theron Wall



Inside Lending from Theron Wall
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 November 11, 2013 – Vol. 11, Issue 45

>> Market Update

QUOTE OF THE WEEK... "For those who believe, no proof is necessary. For those who don't believe, no proof is possible." --Stuart Chase, American economist

INFO THAT HITS US WHERE WE LIVE
... People who don't believe in the housing recovery will no doubt ignore the latest proof of its strength. The National Association of Realtors (NAR) reported that most metro areas saw solid year-over-year price gains in the third quarter. The national median price posted its strongest annual growth in almost eight years. For existing single-family homes, the median price rose in 88% of the markets measured, based on Q3 closings, compared to last year.

However, with "the ongoing situation of more buyers than sellers in the market," the NAR's chief economist expects prices "to rise slowly at a single-digit growth rate in 2014." This of course is good news for anyone worried about homes becoming less affordable. In addition, the National Association of Home Builders (NAHB) said builder confidence in the 55+ housing market continued to improve in Q3 compared to a year ago. The single-family index hit the highest third quarter level since 2008, posting the eighth straight quarter of year-over-year gains.

BUSINESS TIP OF THE WEEK
... People can hit a wall when they're 95% of the way to a goal, becoming complacent, hesitant, or even negative about what's been accomplished. Instead, they should use that 95% as the springboard to reach what they want to achieve.

>> Review of Last Week

NICE JOBS... Friday gave us a very much stronger than expected October jobs report, which then did a nice job on stock prices. The Dow set a new record high by the close of festivities, while the broadly based S&P 500 registered its fifth straight weekly gain. The tech-heavy Nasdaq failed to join the party, down a tick for the second week in a row. The good news amounted to 204,000 payrolls added to the U.S. economy in October, over twice the number expected. Unfortunately, the unemployment rate ticked up to 7.3%, as the labor force dropped by 720,000.

Other news of the week included the Advanced estimate for real GDP growth in Q3 hitting 2.8%, matching its biggest increase in a year. Investment in the housing sector stayed strong, up 14.6%, but consumer spending slowed to a 1.5% gain. Good economic news continued with the ISM Services index showing greater than expected growth for October. Even weekly jobless claims dropped by 9,000. So, despite the predictions from politicians and pundits that the partial government shutdown would have significant economic effects, the private sector doesn't seem to have been listening.

The week ended with the Dow up 0.9%, to 15762; the S&P 500 up 0.5%, to 1771; but the Nasdaq slipped 0.1%, to 3919.
The October jobs surprise slammed bonds hard. The prospect of a healthier economy and a sooner start to the Fed tapering its bond purchases sent prices southward. The FNMA 3.5% bond we watch ended the week down 1.73, to $100.28. National average fixed mortgage rates rebounded slightly in Freddie Mac's Primary Mortgage Market Survey for the week ending November 7. Their chief economist put it to the "more positive economic data releases." Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?
... GDP growth is an increase in the production of goods and services. "Nominal" growth includes inflation, while "real" GDP growth is nominal growth minus inflation.

>> This Week's Forecast

TRADE DEFICIT WIDENS, PRODUCTIVITY SLIDES, MANUFACTURING SO-SO... This week is relatively quiet, but we may see some useful data. The Trade Balance for September is expected to come in with the deficit unchanged, as exports continue to trail imports. Productivity during the three months ending September 30 is forecast down, but still expanding. Manufacturing is predicted to grow slowly, with Industrial Production up a tad for October and the NY Empire Manufacturing Index ahead for November.

The stock markets will be open on Veteran's Day, today, but the bond market will be closed.

>> 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 Nov 11 – Nov 15
 Date
Time (ET)
Release
For
Consensus
Prior
Impact
W
Nov 13
14:00
Federal Budget
Oct
NA
–$120.0B
Moderate
Th
Nov 14
08:30
Initial Unemployment Claims
11/9
330K
336K
Moderate
Th
Nov 14
08:30
Continuing Unemployment Claims
11/2
2.862M
2.868M
Moderate
Th
Nov 14
08:30
Trade Balance
Sep
–$38.8B
–$38.8B
Moderate
Th
Nov 14
08:30
Productivity – Prelim.
Q3
2.0%
2.3%
Moderate
Th
Nov 14
11:00
Crude Inventories
11/9
NA
1.577M
Moderate
F
Nov 15
08:30
NY Empire Manufacturing Index
Nov
4.3
1.5
Moderate
F
Nov 15
09:15
Industrial Production
Oct
0.2%
0.6%
Moderate
F
Nov 15
09:15
Capacity Utilization
Oct
78.3%
78.3%
Moderate

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months... The debate continues about when the Fed will start tapering its bond purchases, but economists pretty much agree the Funds Rate won't budge, well into 2014. 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
Dec 18
0%–0.25%
Jan 29
0%–0.25%
Mar 19
0%–0.25%

Probability of change from current policy:
After FOMC meeting on:
Consensus
Dec 18
     <1%
Jan 29
     <1%
Mar 19
     <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. This message is intended for business professionals only and is not intended for distribution to consumers or other third parties. The material does not represent the opinion of Wallick & Volk Mortgage. BK 0018295 NMLS #256412


Equal Housing Lender

MCID900139960

Post a Comment

Brad Bergamini, real estate agent on Zillow

Share Prescott Real Estate News

Bookmark and Share

Prescott Real Estate on YouTube

Loading...

Brad Bergamini's answers on Trulia Voices

PRESCOTT, Arizona area homes for sale and listings from Brad Bergamini