Weekend Update - March 12, 2010

As expected, this week was void of any major economic data that could cause wide swings in the markets. For the entire week the stock and bond markets have been trading within a narrow range bringing a little emotional reprieve from the wild market movements we have been experiencing over the last few weeks.
It appears for now that the economy is recovering as expected at a slow but steady pace. Economic optimism has been the primary contributor to the slight increase in overall stock indices this week.
The government held a 10YR Treasury auction on Wednesday in which demand was higher than expected. Normally in this situation the bond yield would have declined resulting in a reduction in mortgage rates. However, given the lack of any other significant economic data, treasury yields remained virtually unchanged all week with the exception of Friday.
Friday it was reported that retail sales increased by .3% which exceeded analyst expectations. The higher than expected rise is retail is reinforcing the fact that consumers are our coming out and making purchases despite the challenging employment market.
In other housing news, as the country makes a larger push to become "green" and more and more homeowners and homebuyers want energy saving technology placed in homes, there appears to be a valuation issue rising up.
At the present time, many of the "green housing" initiatives are being completed by new home builders and that is where the challenge exists.. What is happening as of late is that appraisers are struggling to give increased valuation credit to the green properties due to a lack of data available. The foreclosure plague continues nationwide and it has become increasingly difficult for an appraiser to support a higher value on a property regardless of how much "green" technology may be incorporated.
As of late, we have seen that unemployment has been stable in that the pace of workers losing their jobs has slowed dramatically. As this news continues and is certainly welcome, the challenge that many of the current unemployed face remains high in that this week it was reported that continuing unemployment claims rose unexpectedly.

JJ Mack
Your Mortgage Consultant
916-517-1800 x300