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Monday, January 13, 2014

Inside Lending Newsletter From Theron Wall

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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 January 13, 2014 – Vol. 12, Issue 2

 

>> Market Update

QUOTE OF THE WEEK... "But to look back all the time is boring. Excitement lies in tomorrow." --Natalia Makarova, Soviet-Russian-born prima ballerina

INFO THAT HITS US WHERE WE LIVE
... Fannie Mae's December National Housing Survey asked consumers to look into tomorrow and it was somewhat exciting to see that people are becoming more confident in the housing recovery. Evidence of this came in the finding that 49% of those surveyed believe home prices will rise over the next 12 months, up from 43% a year ago. The size of that price increase was expected to be 3.2%, compared to just 2.6% last year. Even better, 33% of consumers polled said now is a good time to sell, a significant gain from the 21% who felt that way last December.

Fannie Mae's chief economist commented: "The marked improvement in housing market sentiment over the course of 2013 bore out our view going into the year that the housing recovery was on a firm footing."
He now sees "a continued but measured housing recovery as we move through 2014." Wednesday, the Federal Housing Finance Agency said it will delay plans to raise the base guarantee fee for mortgages securitized by Fannie Mae and Freddie Mac in order to give their new director time to review the changes. That's good news for now.

BUSINESS TIP OF THE WEEK... When you're trying to come up with a solution, avoid negative language. Use constructive phrases, such as "How might we...?" This suggests that anything's possible and encourages team effort.

>> Review of Last Week

WEAK JOBS, MIXED MARKETS... The first full week of trading on Wall Street ended with a weak December jobs report that shook things up a bit. But by the time the dust settled, the S&P 500 and the Nasdaq had recorded their first weekly gains of the year, though the Dow edged downward for the second time in a row. Nonfarm payrolls came in with a measly 74,000 jobs added for the month. This was the smallest increase since the start of 2011 and brings the economy into 2014 with a lot less momentum. The unemployment rate fell to 6.7%, although most of the drop came from a decline in the labor force.

There may be fewer people still looking for work, but at least those with jobs continue to make progress. Average hourly earnings rose 0.1% in December and are up a combined 3.4% over a year ago. This indicates consumer incomes are increasing enough to keep spending headed up, which is all to the good economically. ISM Services showed that sector growing in December, though less than expected. But, amazingly, the Trade Deficit shrank to $34.3 billion in November. Exports are now up 5.2% and imports down 1.1% in the past year.

The week ended with the Dow down 0.2%, to 16437; the S&P 500 up 0.6%, to 1842; and the Nasdaq up 1.0%, to 4175.

Bonds surged Friday after the disappointing December Nonfarm Payrolls number hit the wires. The FNMA 3.5% bond we watch ended the week up .94, to $100.07. National average fixed mortgage rates dipped by a whisker in Freddie Mac's Primary Mortgage Market Survey for the week ending January 9. The Mortgage Bankers Association reported loan applications up 2.6% overall for the week ending January 3. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?
... The cost to build the average U.S. single-family home hit $246,453 in 2013, reaching its highest mark since 1998, according to the National Association of Home Builders.

>> This Week's Forecast

RETAIL AND HOME BUILDING SLOW DOWN, INFLATION AND FACTORIES PICK UP... Tuesday we get December Retail Sales and, unfortunately, a flat reading is expected. Housing Starts should also disappoint in December, with the annual rate below a million units. Both wholesale and consumer prices picked up a bit in December, according to forecasts for the Producer Price Index (PPI) and the Consumer Price Index (CPI).

Happily, manufacturing continues its surprising renaissance in the recovery. Both the New York Empire Manufacturing Index and the Philadelphia Fed Index are predicted to show stronger growth in factory activity in those major regions. 

>> 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 Jan 13 – Jan 17

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

M
Jan 13

14:00

Federal Budget

Dec

+$44.0B

–$1.2B

Moderate

Tu
Jan 14

08:30

Retail Sales

Dec

0.0%

0.7%

HIGH

Tu
Jan 14

10:00

Business Inventories

Nov

0.3%

0.7%

Moderate

W
Jan 15

08:30

Producer Price Index (PPI)

Dec

0.3%

–0.1%

Moderate

W
Jan 15

08:30

Core PPI

Dec

0.1%

0.1%

Moderate

W
Jan 15

08:30

NY Empire Manufacturing Index

Jan

3.5

1.0

Moderate

W
Jan 15

10:30

Crude Inventories

1/11

NA

–2.675M

Moderate

W
Jan 15

14:00

Fed's Beige Book

Jan

NA

NA

Moderate

Th
Jan 16

08:30

Initial Unemployment Claims

1/11

333K

330K

Moderate

Th
Jan 16

08:30

Continuing Unemployment Claims

1/4

2.835M

2.865M

Moderate

Th
Jan 16

08:30

Consumer Price Index (CPI)

Dec

0.3%

0.0%

HIGH

Th
Jan 16

08:30

Core CPI

Dec

0.2%

0.2%

HIGH

Th
Jan 16

10:00

Philadelphia Fed Index

Jan

8.0

6.4

HIGH

F
Jan 17

08:30

Housing Starts

Dec

986K

1.091M

Moderate

F
Jan 17

08:30

Building Permits

Dec

1.000M

1.007M

Moderate

F
Jan 17

09:15

Industrial Production

Dec

0.3%

1.1%

Moderate

F
Jan 17

09:15

Capacity Utilization

Dec

79.1%

79.0%

Moderate

F
Jan 17

09:55

Univ. of Michigan Consumer Sentiment

Jan

83.0

82.5

Moderate

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months... FOMC Minutes from the Fed's December 18 meeting said the current super low Funds Rate is appropriate as long as the unemployment rate stays above 6.5%. Economists expect it to remain there for a while. 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

Jan 29

0%–0.25%

Mar 19

0%–0.25%

Apr 30

0%–0.25%


Probability of change from current policy:

After FOMC meeting on:

Consensus

Jan 29

     <1%

Mar 19

     <1%

Apr 30

     <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

 

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