William and Kate were married this morning. They kissed on the balcony for all to see, so now I, along with the estimated 2 billion people that watched can now resume normal life once again. Oops, no we can't...I forgot that the media is going to video their every move of their Honeymoon, and what they can't film, they will make up.
There are increasing indications that the economy is on the path to sustained recovery. It may not be at an earth shattering pace, but evidence certainly points toward an improving economy. Of course there will continue to be set backs every so often, but the recovery trend seems to have really taken hold.
New Home Sales are starting to show signs of life. The increase of 30,000 units over last month was more than expected. Although the pace of new home sales is still at historic lows, the trend of improvement seems to be starting. As promising as this report is, it is important not to put much weight on the new home sale report for the simple fact that until existing home inventory declines significantly, home buyers will continue to gravitate towards existing home purchases. Existing homes tend to be more affordable due the fact that short sales and foreclosures make up almost 40% of all sales.
Existing Home Sales, which is the key to reducing existing housing inventory, showed a nice 5.1% jump for the month of March. The National Association of Realtors attributes the jump to improved job creation and rising rents. More and more renters are starting to realize that for a few dollars more per month, they can own a home instead of paying someone else's mortgage by renting.
The Mortgage Bankers Association reported a 13.6% decline in purchase applications for the prior week. Although this decline may seem significant, it is important to remember that the recent increases in mortgage purchase applications was mainly driven by home buyers trying to apply for their loan prior to the increase in FHA Insurance Premiums which took effect on April 18th. Now that the premiums have taken effect, we should see mortgage applications numbers moderate.
Mortgage rates have been declining again as concerns about significant inflation have subsided. The FOMC reiterated that the concern about inflation has decreased somewhat in their recent meeting as the FOMC continues to use "extended period" in their language in regard to keeping rates low. In fact for the first time in many months, the entire committee was in agreement about their assessment that the economy will continue to grow at a moderate pace.
Once again the American public is showing its resolve in that consumer spending habits have not been changing as radically as expected due to rising gas prices. Like anything else, if you experience it enough, you get used to it and accept it. (By the way Exxon reported an 11 billion dollar first quarter profit but yet they said that they don't make much money on gasoline. Please wish me a happy birthday because obviously Exxon thinks I was born yesterday.)
Reports due out next week are:
• Monday May 2nd - ISM Manufacturing Index & Construction Spending
• Tuesday May 3rd - Factory Orders
• Wednesday May 4th - MBA Mortgage Applications & ADP Employment Report
• Thursday May 5thth - First Time Jobless Claims
• Friday May 6th - National Unemployment
Your Mortgage Consultant,
JJ Mack
916-517-1800
Friday, April 29, 2011
Friday, April 22, 2011
Mortgage Market Update - 4/22/2011
Housing week came and went without much fanfare. As promised this was real estate reports week, and just like so many months past, the reports were very mixed.
The Housing Market Index, which measures the present and future anticipated health of new construction, showed that the state of new construction is moderate at best. Existing sales are slow and future sales appear to be slow as well. The bright spot in the report is buyer traffic has increased in recent weeks and that has builders hopeful about the future.
Housing Starts showed that although sales have not been where builders would like them to be, it is appears they believe things will improve. The increase in starts of 7.2% for the month of March was a drastic reversal of direction from February's decline of 18.5%. Overall the numbers remain at very low levels however any breath of optimism by builders will gladly be accepted.
The Mortgage Bankers Association reported that purchase applications jumped 10% in the week of April 15th and refinance applications increased 2.7%. The jump in purchase applications is believed to be related to both the recent drop in mortgage rates along with buyers rushing to apply for their home loan before the FHA Insurance Premiums take effect.
The National Association of Realtors reported that Existing Home Sales increased 3.7% from the prior month. Additional good news is that the average home price increased 2.2%. Home prices are still 5.9% lower than the same time last year however the gap in home prices between 2011 and 2010 seems to be closing. 35% of all purchases last month were "all cash sales". Additionally, 40% of all existing home sales were distressed properties.
First Time Jobless Claims are once again sitting back around the 400,000 per week. Last week there were 416,000 first time filers and this week it dropped 13,000 to 403,000. It seems that the gradual reduction of claims we had seen over the 1st quarter of 2011 has stopped. We are not experiencing significant increases in claims either which leads to a feeling that maybe the job market is stabilized.
The stock market has recovered nicely since last week as it has risen over 300 points for the week. The markets will be closed for Good Friday. As mentioned in last week's report, corporate profits were being released this week. The profit reports have been mixed.
Lastly, President Obama announced this morning that the overall health of the economy is improving however real estate continues to be a major drag on the economy. (I guess our President has not had to gas up his car recently to realize that skyrocketing gas prices are having a major impact on consumer spending habits)
Despite gas prices and housing, the economy continues to chug along growing little by little. Companies are hiring, raises are starting to come back into the picture, and overall company profits are improving. Even college graduates are starting to find jobs.
Reports due out next week are:
• Monday April 25th - New Home Sales
• Tuesday April 26th - Consumer Confidence
• Wednesday April 27th - MBA Mortgage Applications, Durable Goods Orders, FOMC Announcement
• Thursday April 28th - GDP, First Time Jobless Claims and Pending Home Sales
Your Mortgage Consultant,
JJ Mack
916-517-1800 x300
The Housing Market Index, which measures the present and future anticipated health of new construction, showed that the state of new construction is moderate at best. Existing sales are slow and future sales appear to be slow as well. The bright spot in the report is buyer traffic has increased in recent weeks and that has builders hopeful about the future.
Housing Starts showed that although sales have not been where builders would like them to be, it is appears they believe things will improve. The increase in starts of 7.2% for the month of March was a drastic reversal of direction from February's decline of 18.5%. Overall the numbers remain at very low levels however any breath of optimism by builders will gladly be accepted.
The Mortgage Bankers Association reported that purchase applications jumped 10% in the week of April 15th and refinance applications increased 2.7%. The jump in purchase applications is believed to be related to both the recent drop in mortgage rates along with buyers rushing to apply for their home loan before the FHA Insurance Premiums take effect.
The National Association of Realtors reported that Existing Home Sales increased 3.7% from the prior month. Additional good news is that the average home price increased 2.2%. Home prices are still 5.9% lower than the same time last year however the gap in home prices between 2011 and 2010 seems to be closing. 35% of all purchases last month were "all cash sales". Additionally, 40% of all existing home sales were distressed properties.
First Time Jobless Claims are once again sitting back around the 400,000 per week. Last week there were 416,000 first time filers and this week it dropped 13,000 to 403,000. It seems that the gradual reduction of claims we had seen over the 1st quarter of 2011 has stopped. We are not experiencing significant increases in claims either which leads to a feeling that maybe the job market is stabilized.
The stock market has recovered nicely since last week as it has risen over 300 points for the week. The markets will be closed for Good Friday. As mentioned in last week's report, corporate profits were being released this week. The profit reports have been mixed.
Lastly, President Obama announced this morning that the overall health of the economy is improving however real estate continues to be a major drag on the economy. (I guess our President has not had to gas up his car recently to realize that skyrocketing gas prices are having a major impact on consumer spending habits)
Despite gas prices and housing, the economy continues to chug along growing little by little. Companies are hiring, raises are starting to come back into the picture, and overall company profits are improving. Even college graduates are starting to find jobs.
Reports due out next week are:
• Monday April 25th - New Home Sales
• Tuesday April 26th - Consumer Confidence
• Wednesday April 27th - MBA Mortgage Applications, Durable Goods Orders, FOMC Announcement
• Thursday April 28th - GDP, First Time Jobless Claims and Pending Home Sales
Your Mortgage Consultant,
JJ Mack
916-517-1800 x300
Friday, April 8, 2011
Mortgage Market Update - 4/8/2011
I think I have decided that I am going to be an economic analyst or so called expert. The reason being is that they are like Weather Forecasters. Regardless of whether they are right or wrong, they are still going to get paid.
Does anyone really know which direction the economy is headed? Of course we can all look at headlines and see that economic indicators are improving. However despite this trend, this week we learned that the Fed can't even agree on the stability and growth of the economy.
The FOMC report released this week showed that in the last Fed meeting that the members were more divided in their sentiment about the economy than we have seen in a long time. Some of the members believe that sooner than later the Fed will have to start pulling back on the stimulus plan (commonly referred to as QE2) and begin raising interest rates.
Meanwhile other members believe that the economy still needs all the help it can get. Some committee members believe that stimulus will be needed well into 2012 and that any attempt to raise rates will hurt the fragile economy.
In the meantime the stock market has seemed to hit a wall. Last week I had mentioned that there are things happening all around the world that can impact the markets. Although in the U.S. we seem to be stabilizing (except the potential government shut down), unrest in North Africa, Thursday's 7.1 earthquake in Japan, and rising oil prices have many concerned that the recovery may come to a halt.
In recent weeks many economic reports have verified that the pace of the recovery is slowing. The good news is that there is still a recovery happening however slow it may be.
Mortgage rates have been rising and are up about .25% from a week ago. Purchase applications for mortgages increased 6.1% despite rising rates. The Mortgage Bankers Association believes that the main driving force for the increase is that FHA Insurance Premiums increased on April 1st and that mortgage companies were advising buyers to apply before the increase went into effect. Refinance applications dropped 6.2% which is a reflection of the rising mortgage rates and also evidence that the pool of borrowers that can still take advantage of refinances continues to get smaller and smaller.
Jobless claims continue to drop in small steps. Last week we saw that national unemployment dropped to .1% down to 8.8%. In addition, first time jobless claims are dropping little by little as well. The most promising indicator about employment is that on-going jobless claims have been steadily decreasing for many weeks now. Some believe that this is because employers are hiring people back into the work force. The "naysayers" will tell you that it is because people have given up trying to find work. I believe it is a combination of both but more so that employers are beginning to undue their hiring freezes and are once again increasing staffing.
Lastly, next week starts the corporate profit reporting season for the 1st quarter of 2011. That could play a major role in driving stocks up or down. Stay tuned...
Reports due out next week are:
• Wednesday April 13th - MBA Mortgage Applications, Retail Sales & 10 YR Note Auction
• Thursday April 14th - First Time Jobless Claims and Producer Price Index
• Friday April 15th - Consumer Price Index, Industrial Production and Consumer Sentiment
Your Mortgage Consultant,
JJ Mack
916-517-1800
Does anyone really know which direction the economy is headed? Of course we can all look at headlines and see that economic indicators are improving. However despite this trend, this week we learned that the Fed can't even agree on the stability and growth of the economy.
The FOMC report released this week showed that in the last Fed meeting that the members were more divided in their sentiment about the economy than we have seen in a long time. Some of the members believe that sooner than later the Fed will have to start pulling back on the stimulus plan (commonly referred to as QE2) and begin raising interest rates.
Meanwhile other members believe that the economy still needs all the help it can get. Some committee members believe that stimulus will be needed well into 2012 and that any attempt to raise rates will hurt the fragile economy.
In the meantime the stock market has seemed to hit a wall. Last week I had mentioned that there are things happening all around the world that can impact the markets. Although in the U.S. we seem to be stabilizing (except the potential government shut down), unrest in North Africa, Thursday's 7.1 earthquake in Japan, and rising oil prices have many concerned that the recovery may come to a halt.
In recent weeks many economic reports have verified that the pace of the recovery is slowing. The good news is that there is still a recovery happening however slow it may be.
Mortgage rates have been rising and are up about .25% from a week ago. Purchase applications for mortgages increased 6.1% despite rising rates. The Mortgage Bankers Association believes that the main driving force for the increase is that FHA Insurance Premiums increased on April 1st and that mortgage companies were advising buyers to apply before the increase went into effect. Refinance applications dropped 6.2% which is a reflection of the rising mortgage rates and also evidence that the pool of borrowers that can still take advantage of refinances continues to get smaller and smaller.
Jobless claims continue to drop in small steps. Last week we saw that national unemployment dropped to .1% down to 8.8%. In addition, first time jobless claims are dropping little by little as well. The most promising indicator about employment is that on-going jobless claims have been steadily decreasing for many weeks now. Some believe that this is because employers are hiring people back into the work force. The "naysayers" will tell you that it is because people have given up trying to find work. I believe it is a combination of both but more so that employers are beginning to undue their hiring freezes and are once again increasing staffing.
Lastly, next week starts the corporate profit reporting season for the 1st quarter of 2011. That could play a major role in driving stocks up or down. Stay tuned...
Reports due out next week are:
• Wednesday April 13th - MBA Mortgage Applications, Retail Sales & 10 YR Note Auction
• Thursday April 14th - First Time Jobless Claims and Producer Price Index
• Friday April 15th - Consumer Price Index, Industrial Production and Consumer Sentiment
Your Mortgage Consultant,
JJ Mack
916-517-1800
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