I am very excited today! I finally get to write something positive about housing. It has been a while but today I will relish the opportunity to deliver some good news.
It appears, at least for now, the free fall in house prices has ended. The Case-Shiller Housing Value Index rose 1.2% showing that stability to house prices in major cities across the U.S. is taking hold.
In even more positive housing news, New Home Sales rebounded 23.6% from May's previous drop of 36.7%. It seems that the tax credit hangover is starting to dissipate and we are on a slow road to rebuilding a normal housing market. (I'm not exactly sure what "normal" is, or what it will be in the future, however it feels good for the moment to be able to use the word "normal")
Housing inventory dropped from 9.6 months down to 7.6%. This significant drop is a welcome sign, however, and it is a big however, let us not be naïve. We all know the banks are sitting with over 3 million properties that they have not placed on the market. So in reality the supply is more like 5 years however we know the banks are going to drip these properties out for sale in order to keep house prices stable.
In other areas of the economy, news was not quite as optimistic. Consumer Confidence continues to erode due to the job market. Finding jobs is very difficult for the unemployed and the number of people that are part of the on-going claims is rising again. Keep in mind that on-going claims is rising and there are more people falling off the unemployment rolls so in fact the job market is really worse than the numbers indicate.
Corporate profits this week showed many companies are increasing their bottom line which is the foundation for future economic growth and the recovery of the jobs market. I have said it before, and I will say it again, although profits are increasing, until sales increase, which is still not happening, we will not see a huge change in the unemployment picture. The good news is that stronger bottom lines mean the government will be able to stay on the sidelines in regard to bailing out companies again.
Mortgage applications for purchase transactions declined 4.4% for the prior week and refinance apps declined 5.9%. These numbers are not anything to be concerned about in that for the most part, the decline represents the typical mid-summer real estate slow down.
Jobless claims dropped slightly less than expected but none the less they dropped. (Do I have to keep writing about Jobless Claims because the market is not paying attention to them right now so why should I?)
Economic reports due out next week are:
• Monday August 2nd - Construction Spending
• Tuesday August 3rd - Pending Home Sales
• Wednesday August 4th - MBA Purchase Applications
• Thursday August 5th - Weekly Jobless Claims
• Friday August 6th - Employment Situation
Your Mortgage Professional,
JJ Mack
916-517-1800
Friday, July 30, 2010
Friday, July 23, 2010
Weekend Mortgage Market Update - 07/23/2010
Rather than write this report every week, I think I am just going to send out a one page picture of an arrow pointing either up, down or sideways. That by itself will give you a clear indication as to the direction of the economy. Please expect to see an arrow pointing sideways for the near future. A flat economy has been the name of the game for pretty much the entire year thus far.
The economic reports this week once again indicate we are going nowhere fast. The stock market continues to have its good days and bad days moving on any drop of news so investors can take a gamble to lock in profits for a day. It seems more like the stock market is all day traders than anyone believing in long term investments.
In regard to housing, let's start off with the "not so good", and then give you the optimistic side of housing. (Yes there is an optimistic side).
The Housing Market Index which dropped to the lowest point since April is an opinion of housing conditions released by the National Association of Home Builders. Although the index dropped sharply, you must remember it is only an opinion and not based upon any statistical data.
The Housing Starts report was a mixed message. New construction for homes dropped sharply however there was a very healthy increase for new building permits reported. Could this be a sign that builders see the 4th quarter being more productive? (I hope so)
Mortgage applications for refinances and purchases jumped as expected. Record low mortgage rates have been driving the last group of holdouts to finally submit applications to lower their rates. Purchase applications also rose 3.4% showing that the there are signs of life in the purchase market. We all know record low rates are the driving force behind the increase in applications. Given the last couple of months of declining purchases, any positive report should be embraced and personally I am excited about any increase no matter how large or small. Mortgage rates are expected to remain very low for the coming months.
Existing Home Sales also fell for the month however not as much as anticipated. The drop of 5.1% was not a market mover and the increase of inventory from 8.3 months to 8.9 was not a big surprise. The big positive side to the report is that median home prices rose 5.2% which some people are saying may indicate we have hit the bottom as far as home values. (I personally think it is crazy to make that prediction based upon one report however, any positive news in values can cause fence sitters to jump back in to the market.)
Jobless claims dropped more than expected. As stated last week, the jobless claims are not playing a major role in the movement of the markets. Until we begin to see a declining trend, you can expect the coming weeks and month to be up and down once again reinforcing my desire to just place an arrow pointing sideways on this report.
Economic reports due out next week are:
• Monday July 26th - New Home Sales
• Tuesday July 27th - Case-Shiller House Price Index & Consumer Confidence
• Wednesday July 28th - MBA Purchase Applications & Durable Goods Orders
• Thursday July 29th - Weekly Jobless Claims, GDP and Consumer Sentiment
Your Mortgage Professional,
JJ Mack
916-517-1800
The economic reports this week once again indicate we are going nowhere fast. The stock market continues to have its good days and bad days moving on any drop of news so investors can take a gamble to lock in profits for a day. It seems more like the stock market is all day traders than anyone believing in long term investments.
In regard to housing, let's start off with the "not so good", and then give you the optimistic side of housing. (Yes there is an optimistic side).
The Housing Market Index which dropped to the lowest point since April is an opinion of housing conditions released by the National Association of Home Builders. Although the index dropped sharply, you must remember it is only an opinion and not based upon any statistical data.
The Housing Starts report was a mixed message. New construction for homes dropped sharply however there was a very healthy increase for new building permits reported. Could this be a sign that builders see the 4th quarter being more productive? (I hope so)
Mortgage applications for refinances and purchases jumped as expected. Record low mortgage rates have been driving the last group of holdouts to finally submit applications to lower their rates. Purchase applications also rose 3.4% showing that the there are signs of life in the purchase market. We all know record low rates are the driving force behind the increase in applications. Given the last couple of months of declining purchases, any positive report should be embraced and personally I am excited about any increase no matter how large or small. Mortgage rates are expected to remain very low for the coming months.
Existing Home Sales also fell for the month however not as much as anticipated. The drop of 5.1% was not a market mover and the increase of inventory from 8.3 months to 8.9 was not a big surprise. The big positive side to the report is that median home prices rose 5.2% which some people are saying may indicate we have hit the bottom as far as home values. (I personally think it is crazy to make that prediction based upon one report however, any positive news in values can cause fence sitters to jump back in to the market.)
Jobless claims dropped more than expected. As stated last week, the jobless claims are not playing a major role in the movement of the markets. Until we begin to see a declining trend, you can expect the coming weeks and month to be up and down once again reinforcing my desire to just place an arrow pointing sideways on this report.
Economic reports due out next week are:
• Monday July 26th - New Home Sales
• Tuesday July 27th - Case-Shiller House Price Index & Consumer Confidence
• Wednesday July 28th - MBA Purchase Applications & Durable Goods Orders
• Thursday July 29th - Weekly Jobless Claims, GDP and Consumer Sentiment
Your Mortgage Professional,
JJ Mack
916-517-1800
Friday, July 16, 2010
Weekend Mortgage Update - 07/16/2010
As I have promised in the past, my goal is to balance economic optimism with the reality of what is happening in the markets. This is no easy task as the pace of the recovery continues to slow.
Because of the amount of news reported this week, I am providing it to you in bullet point format for easier reading and digestion.
• Mortgage rates rose earlier in the week, only to do a complete reversal in the second half and once again return to record lows. The Mortgage Bankers Association reported this week that despite amazingly low rates, mortgage applications for home purchases declined 3.1%. Even refinance applications dropped 2.9%.
• Retail Sales dropped .5% however inside the numbers it is showing that consumers are spending more money on personal items such as cell phones, HDtv's, clothing, etc...
• The Producer Price Index and the Consumer Price Index both are showing clear signs that inflation is not an issue or concern on the wholesale or retail level.
• Jobless Claim reporting seems to be a non factor in impacting the markets as many people have realized that these weekly reports are not indicative of what is really happening in the employment sector. Initial jobless claims dropped a significant 29,000 which was nice to see. Continued unemployment is where the numbers are not representative of reality as the number of people falling off the unemployment rolls is growing and they are no longer being counted in any of the statistics
• Corporate profits reported significant increases in many sectors. Although sales have not increased which means that profits increased due to cost cutting measures, the fact that company profits are growing is a very good sign and the necessary first step before companies resume hiring.
• The stock market is targeted to finish modestly higher for the week based upon the better than expected profit reports.
As far as analysts predicting the future of the economy, it is clear that the so called experts don't have a clue as to where we are headed. I actually find it entertaining to watch because recent history has shown us that over the last 24 months, the so called experts have not even been close in their predictions. (Weren't mortgage rates so supposed to 6% by now?)
The bottom line, don't try to predict the future and don't listen to anyone that says they know where the market and economy is headed. The key to survival and thriving is to adapt quickly to any changes in the market and economy and remain committed to persevering. Do not bet the farm on any forecast or prediction because odds are, it will be far from what actually happens
Buckle up, The Wall Street Reform Bill is about to be signed. Enter the new age of Socialism!
Economic reports due out next week are:
• Monday July 19th - Housing Market Index
• Tuesday July 20th - Housing Starts
• Wednesday July 21st - MBA Purchase Applications
• Thursday July 22nd - Existing Home Sales & Weekly Jobless Claims
Your Mortgage Professional,
JJ Mack
916-517-1800
Because of the amount of news reported this week, I am providing it to you in bullet point format for easier reading and digestion.
• Mortgage rates rose earlier in the week, only to do a complete reversal in the second half and once again return to record lows. The Mortgage Bankers Association reported this week that despite amazingly low rates, mortgage applications for home purchases declined 3.1%. Even refinance applications dropped 2.9%.
• Retail Sales dropped .5% however inside the numbers it is showing that consumers are spending more money on personal items such as cell phones, HDtv's, clothing, etc...
• The Producer Price Index and the Consumer Price Index both are showing clear signs that inflation is not an issue or concern on the wholesale or retail level.
• Jobless Claim reporting seems to be a non factor in impacting the markets as many people have realized that these weekly reports are not indicative of what is really happening in the employment sector. Initial jobless claims dropped a significant 29,000 which was nice to see. Continued unemployment is where the numbers are not representative of reality as the number of people falling off the unemployment rolls is growing and they are no longer being counted in any of the statistics
• Corporate profits reported significant increases in many sectors. Although sales have not increased which means that profits increased due to cost cutting measures, the fact that company profits are growing is a very good sign and the necessary first step before companies resume hiring.
• The stock market is targeted to finish modestly higher for the week based upon the better than expected profit reports.
As far as analysts predicting the future of the economy, it is clear that the so called experts don't have a clue as to where we are headed. I actually find it entertaining to watch because recent history has shown us that over the last 24 months, the so called experts have not even been close in their predictions. (Weren't mortgage rates so supposed to 6% by now?)
The bottom line, don't try to predict the future and don't listen to anyone that says they know where the market and economy is headed. The key to survival and thriving is to adapt quickly to any changes in the market and economy and remain committed to persevering. Do not bet the farm on any forecast or prediction because odds are, it will be far from what actually happens
Buckle up, The Wall Street Reform Bill is about to be signed. Enter the new age of Socialism!
Economic reports due out next week are:
• Monday July 19th - Housing Market Index
• Tuesday July 20th - Housing Starts
• Wednesday July 21st - MBA Purchase Applications
• Thursday July 22nd - Existing Home Sales & Weekly Jobless Claims
Your Mortgage Professional,
JJ Mack
916-517-1800
Friday, July 9, 2010
Weekend Mortgage Update - 07/09/2010
When you combine the light trading in the stock market with very little market impacting data being released, it was nice to have a non volatile trading week. As indicated in last week's Weekender, this week there were only two significant U.S. economic reports so the usual market hysteria was kept to a minimum.
This week the stock market experience significant gains and once again climbed above the 10,000 mark. Besides the lack of market moving news, the other reason for the gains is the low trading volume. Historically this week has one of the lowest trading volumes of the year. When low trading volume exists, it is possible to have larger moves in the various stock market indices due to the fact that any large trade can have can carry more weight in the movement of the Dow, Nasdaq and S&P.
The Mortgage Bankers Association reported that despite some of the lowest mortgage rates on record, purchase applications continued to drop, however the slide has dramatically slowed down. Purchase applications dropped a small 2.0% which hopefully indicates that purchasing volume is stabilizing. However, we will have to wait and see the application reports in the coming weeks to truly determine the direction of housing.
The MBA also reported a 9.2% jump in refinance applications which continues to indicate that there are many homeowners that have still not taken advantage of all of the previous refinance booms over the last few years.
First time jobless claims were reported to have dropped by 21,000. The stock market loved this news and rallied to a 120 point rise on the Dow Jones Industrial Average.
For the most part, news on the European debt crisis seems to indicate that concern is easing and that Europe is getting it under control. In recent weeks and months, the European debt crisis has been keeping traders on edge making U.S. Treasuries the investment of choice.
Next week the treasury is auctioning off 10YR notes and depending on the demand, that can have an impact on mortgage rates either up or down.
After a restful week of little economic news, next week plans to deliver a slew of economic reports. Buckle Up, it could get bumpy again.
Lebron James decided on going to Miami, lets watch to see how many people now sell their recently acquired MSG stock in hopes of it rocketing up if he came to NY.
Reports due out next week are:
• Tuesday July 13th - 10 Yr Treasury Note Auction
• Wednesday July 14th - MBA Purchase Applications
• Wednesday July 14th - Retail Sales
• Thursday July 15th - Producer Price Index
• Thursday July 15th - Industrial Production
• Thursday July 15th - Weekly Jobless Claims
• Friday July 16th - Consumer Price Index
• Wednesday July 7th - MBA Purchase Applications
• Thursday July 8th - Weekly Jobless Claims
This week the stock market experience significant gains and once again climbed above the 10,000 mark. Besides the lack of market moving news, the other reason for the gains is the low trading volume. Historically this week has one of the lowest trading volumes of the year. When low trading volume exists, it is possible to have larger moves in the various stock market indices due to the fact that any large trade can have can carry more weight in the movement of the Dow, Nasdaq and S&P.
The Mortgage Bankers Association reported that despite some of the lowest mortgage rates on record, purchase applications continued to drop, however the slide has dramatically slowed down. Purchase applications dropped a small 2.0% which hopefully indicates that purchasing volume is stabilizing. However, we will have to wait and see the application reports in the coming weeks to truly determine the direction of housing.
The MBA also reported a 9.2% jump in refinance applications which continues to indicate that there are many homeowners that have still not taken advantage of all of the previous refinance booms over the last few years.
First time jobless claims were reported to have dropped by 21,000. The stock market loved this news and rallied to a 120 point rise on the Dow Jones Industrial Average.
For the most part, news on the European debt crisis seems to indicate that concern is easing and that Europe is getting it under control. In recent weeks and months, the European debt crisis has been keeping traders on edge making U.S. Treasuries the investment of choice.
Next week the treasury is auctioning off 10YR notes and depending on the demand, that can have an impact on mortgage rates either up or down.
After a restful week of little economic news, next week plans to deliver a slew of economic reports. Buckle Up, it could get bumpy again.
Lebron James decided on going to Miami, lets watch to see how many people now sell their recently acquired MSG stock in hopes of it rocketing up if he came to NY.
Reports due out next week are:
• Tuesday July 13th - 10 Yr Treasury Note Auction
• Wednesday July 14th - MBA Purchase Applications
• Wednesday July 14th - Retail Sales
• Thursday July 15th - Producer Price Index
• Thursday July 15th - Industrial Production
• Thursday July 15th - Weekly Jobless Claims
• Friday July 16th - Consumer Price Index
• Wednesday July 7th - MBA Purchase Applications
• Thursday July 8th - Weekly Jobless Claims
Tuesday, July 6, 2010
Mortgage Market Update - July 6
Unfortunately due to the second week of primarily negative economic reports and data, it is not easy to find many good things to write about as much as I am trying - sorry!
The talk of a double dip recession has been increasing due to increasing trend of negative economic reports hitting the market. It is becoming clear to many people that we are further from a recovery than most of us had hoped.
Housing received a reprieve this week when the Senate and House finally agreed to push forward the independent bill of extending the tax credit until September 30th. The credit extension is only for homebuyers that were in contract by the required April 30th deadline.
The Case-Shiller Home Values Index rose in the months of April by .7% which goes along with the increased activity of home purchases that was reported during the same month. On the opposite side of the spectrum, pending home sales fell off a cliff in the month of May with the National Association of Realtors reporting as 30% drop.
The Mortgage Bankers Association reported that last week purchase applications dropped 3.3%. On the bright side, refinance applications jumped 12.6% with the lowest interest rates on record available to homeowners, 4.67% and 4.06% for a 30 and 15 year fixed rate respectively.
Other significant news reports for the week are:
• The stock market continues to take a beating on concerns about the economic recovery as well as the weakness in overseas economies.
• ADP reported job growth of 13,000 which was is an improvement however far below the projected 61,000.
• Consumer confidence dropped considerably slowing purchases in housing and auto sales.
• ISM Manufacturing Index and construction spending both declined slightly however these declines are not alarming.
• The House finally voted to extend unemployment benefits for those whose benefits were to expire on June 30th. The Senate is expected to pass the measure in about 2 weeks when they return from summer vacation.
• The employment situation reported on Friday showed that the national unemployment rate dropped from 9.7% to 9.5% indicating that the employment sector is still recovering at a very slow pace.
Despite all of the negative news, I still remain optimistic for housing. With record low interest rates and no sign of them increasing, housing is becoming even more affordable and demand will increase.
Fortunately, there are very few significant reports scheduled for next week which will hopefully lead us to a less volatile week in the markets. News on tap for next week is:
• Wednesday July 7th - MBA Purchase Applications
• Thursday July 8th - Weekly Jobless Claims
The talk of a double dip recession has been increasing due to increasing trend of negative economic reports hitting the market. It is becoming clear to many people that we are further from a recovery than most of us had hoped.
Housing received a reprieve this week when the Senate and House finally agreed to push forward the independent bill of extending the tax credit until September 30th. The credit extension is only for homebuyers that were in contract by the required April 30th deadline.
The Case-Shiller Home Values Index rose in the months of April by .7% which goes along with the increased activity of home purchases that was reported during the same month. On the opposite side of the spectrum, pending home sales fell off a cliff in the month of May with the National Association of Realtors reporting as 30% drop.
The Mortgage Bankers Association reported that last week purchase applications dropped 3.3%. On the bright side, refinance applications jumped 12.6% with the lowest interest rates on record available to homeowners, 4.67% and 4.06% for a 30 and 15 year fixed rate respectively.
Other significant news reports for the week are:
• The stock market continues to take a beating on concerns about the economic recovery as well as the weakness in overseas economies.
• ADP reported job growth of 13,000 which was is an improvement however far below the projected 61,000.
• Consumer confidence dropped considerably slowing purchases in housing and auto sales.
• ISM Manufacturing Index and construction spending both declined slightly however these declines are not alarming.
• The House finally voted to extend unemployment benefits for those whose benefits were to expire on June 30th. The Senate is expected to pass the measure in about 2 weeks when they return from summer vacation.
• The employment situation reported on Friday showed that the national unemployment rate dropped from 9.7% to 9.5% indicating that the employment sector is still recovering at a very slow pace.
Despite all of the negative news, I still remain optimistic for housing. With record low interest rates and no sign of them increasing, housing is becoming even more affordable and demand will increase.
Fortunately, there are very few significant reports scheduled for next week which will hopefully lead us to a less volatile week in the markets. News on tap for next week is:
• Wednesday July 7th - MBA Purchase Applications
• Thursday July 8th - Weekly Jobless Claims
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