Market News Update - Stock Market Takes a Wild Ride

Outside of Monday’s volatile trading day, the stock market was unusually stable for the remainder of the week through Thursday’s closing bell.  On Monday, the stock market took a wild ride and the Dow Jones Industrial Average dropped as much as 177 points before recovering back to close higher than where it started the day.  Monday’s volatility was more having to do with perception than any real economic data. 

Investors that were surveyed on Wall Street seemed to blame Monday’s mid-day sell off on the perception that many stocks, especially those related to social media, are grossly overvalued.

Housing, the Fed, and the Department of Labor dominated the week’s most significant news.  The housing data for the week shows continued signs of slow improvement in the real estate market.  Monday the Pending Home Sales Index showed the first signs of spring momentum.  After 9 consecutive months of declines, the pending home sales index jumped 3.4 percent in March.  February’s report was also revised upward by 3 tenths to 0.5 percent. 

On Tuesday the Case-Shiller Home Value Index report was released.  For the month of February home price appreciation was strong and slightly more than expected.  According to the report, home values in the 20 major cities measured by the index rose 0.8 percent.  Values on the west coast, especially San Francisco, led the rise.  Home values in the index are 12.9 percent higher than the same time last year.

Applications for purchase mortgages took an unexpected drop for the week of April 25^th.  There has been some upward movement in mortgage rates; however, the increase is not necessarily believed to be the reason for the decline.  The Mortgage Bankers Association of American reported that purchase applications declined 4.0 percent.  Applications for refinances dropped 7.0 percent.

The one area of concern in this week’s economic data was Wednesday’s GDP report.  The first quarter of 2014 showed that economic growth has come to a virtual standstill. GDP for the first quarter only increased a far lower than expected 0.1 percent.  Harsh weather across the country seems to be what experts believe is the main culprit.  Economic growth in the last quarter of 2013 was 2.6 percent, so it is easy to understand why this year’s first quarter report took many by surprise.

On Wednesday the Fed announced that they are continuing to leave the plan for monetary policy in place.  The Fed will continue to reduce the amount of stimulus they are pushing into the economy through their bond buying program.  Investors on Wall Street expected this announcement from the Fed and there was virtually no reaction when the announcement hit the news wires.

There is much optimism for future employment data as ADP reported payroll growth of 220,000 for the month of April.  March’s figures were also revised up to 209,000.  Employment data has been steadily improving and that is having a positive impact on the latest consumer confidence report.

Next week is very light on market moving data:

·        Wednesday May 7^th - MBA Applications and Fed Chair Janet Yellen Speaks

·        Thursday May 8^th - First Time Jobless Claims

I appreciate your business and look forward to talking to you soon! Have a great day!!!
 

Sincerely,

Cindy Tomlinson
Loan Officer

USLending Company

BRE Lic # 01520422
NMLS # 214851   

PS… FOLLOW ME on Facebook for the latest Mortgage updates

Healthier Market Welcome Sight for Spring Home Buyers

The National Housing Trend Report for March was just released by Realtor.com, and it offers some great news for spring home buyers. The market is much healthier this year, with growth in inventory and days on the market. With modest price increases present, the overall outlook is good.

The stats from Realtor.com showed a 9.5 percent growth over March of last year, with 1,841,844 units at a median price of $199,900, which was also 5.3 percent higher. Last year showed an imbalance, with a shorter supply and a heavy increase in home prices.

"Bidding wars in many markets last year frequently elevated offer prices beyond the reach of first-time buyers who could scarcely save for the down payment," offered Steve Berkowitz, CEO of Move. "While inventory is still low, the continuing annual lift in the number of homes on the market that we've seen over the first months of 2014 is an indicator that buying conditions this year may be notably improved from the frenzied pace of last spring."

Read more DSNews. . .

Flatness in Mortgage Rates

A slow week for economic news led to relative flatness in mortgage rates to kick off April.

Freddie Mac released Thursday the results of its latest weekly Primary Mortgage Market Survey, showing the average rate on a 30-year fixed-rate mortgage (FRM) coming up to 4.41 percent (0.7 point) for the week ending April 3—a minor increase from 4.40 percent last week. A year ago at this time, the 30-year FRM averaged 3.54 percent.

The 15-year FRM was up slightly higher, averaging 3.47 percent (0.6 point) from 3.42 percent a week ago.

Changes in adjustable rates were also small: The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.12 percent (0.5 point) this week, up from 3.10 percent previously, while the 1-year ARM moved up to 2.45 percent (0.4 point) from 2.44 percent.

“Mortgage rates were little changed amid a week of light economic reports,” said Frank Nothaft, VP and chief economist for Freddie Mac. “Of the few releases, real GDP was revised up slightly to 2.6 percent growth in the fourth quarter of 2013.”

Meanwhile, finance website Bankrate.com reported the 30-year fixed rate at an average 4.54 percent for the week (up 3 basis points), with the 15-year fixed settling at 3.58 percent (up 2 basis points).

Read More at DSNews.com...

Mortgage Purchases are Up as Rates Fall Slightly

It has been a rough and tumble week in the markets.  Although there were only a few economic reports released during the week, corporate earnings and projections seemed to play the most on the emotions of investors.

The Dow Industrial Average started the week at 16,424.  With a decline to as low as 16,254 and with a peak as high as 16,500, by the end of the trading day on Thursday the market closed almost exactly where it started at 16,417.

The roller coaster started the early part of the week on the upswing with the retail sales report coming stronger than expected.  In December the index rose .2%, which was better than expected.  When you factor out gasoline and auto sales the index rose .6%.  The surprise comes in two places:  the holiday shopping season was slower than hoped by most retailers, combine that with the poor unemployment report from last week, the surprise was that retail increased at all.

The poor unemployment report had investors thinking mid week that the Fed may slow down the planned tapering of the government stimulus plan.  The irony of the whole stimulus focus is that mid last year the markets tanked when the Fed discussed starting the tapering.  In today’s market mindset investors want the Fed to taper the program.  The belief is that the tapering means the economy is healthy and growing, which is good news for investors. 

To prove once again just how sensitive home owners and home purchasers are to interest rates, the recent drop in mortgage rates created a surge in loan applications according to the Mortgage Bankers Association.  Rates have been declining slightly over the last 2 weeks, which created a 12% surge in mortgage applications for home purchases.  Home owners who have still yet to refinance elected to jump on the rate drop as well, with refinance applications surging 11.0% for the week of January 10^th.

On Friday the report on housing starts will be released at 8:30AM.  The expectations for the report is a decline in starts after a 22.7 jump in November.  The reason for the expected decline is that in November the number of permits filed to begin construction declined 3.1%.  Typically, when there is a decline in permits in the prior month, the following month housing starts declines.

The privacy of the American consumer is fast becoming the hot topic.  After the latest security breach at target in which data from over 110 million consumers was stolen, privacy fears are growing like wildfire.  So much so…that there was an article on CNNMoney.com that discussed growing fears of lack of privacy inside our motor vehicles.  Seriously, between GPS devices, smart phones, internet service providers, traffic light cameras, security cameras, store cameras…. Do you think the word “privacy” even exists? (Latest estimates are that our pictures are taken a minimum of 300 times a day)

Next week is an extremely light week on the economic data front:

·        Monday January 20^th – Martin Luther King Holiday – All Markets Closed

·        Thursday January 21^st - First Time Jobless Claims, Existing Home Sales, FHFA HPI

Call Me Today for More Information About:

·        Purchasing w/Low Down

·        FHA Loans

·        HARP 2.0 Refinance

·        VA Loans

·        USDA 100% Financing

·        203k Rehabilitation Loans

·        Fannie Mae Homepath

·        Refinancing for: Cash Out, Debt Consolidation, Remodeling, etc.

·        Reverse Mortgages for Seniors

·        Home Equity Line of Credit

·        Construction Loans

·        Commercial Property Loans    

        

I appreciate your business and look forward to talking to you soon! Have a great day!!!
 

Sincerely,

Cindy Tomlinson
Loan Officer

USLending Company

BRE Lic # 01520422
NMLS # 214851   

PS… FOLLOW ME on Facebook for the latest Mortgage updates

Purchase Applications Down 20% From Same Time Last Year

The stock market has been trading in a narrow range all week.  With a lack of any real market moving data this week, it seems that all eyes are on today’s unemployment report being released at 8:30AM.  What increased the focus on employment data is that on Wednesday the Federal Open Market Committee released the minutes from their last meeting.  In the report, it is clear that the Fed is watching very closely the labor markets to determine at what pace they will continue to taper the economic stimulus program.

As everyone knows by now, the Fed has reduced their bond buying program by 10 billion a month starting with this month.  There is no set time table or schedule for future reductions as of right now, and the employment reports, both today and in the future, are expected to play a major factor in the Fed’s monetary policy decisions in 2014.

Although the Fed and investors place most of the focus on today’s national employment statistics released by the department of labor, on Wednesday the ADP Employment Report was released.  ADP estimated 238,000 private payroll jobs were created last month.  This was slightly higher than expectations.  The stock market moved into positive territory on Wednesday based on this news; however, response was tempered due to ADP’s poor track record of employment predictions over the last year.  Truth be told, ADP estimates have been more in line with the national reports over the last few months, however it seems that investors have not yet gotten over the massive employment miscalculations from ADP over the last few years.  First time jobless claims continue to remain in the 330k range.

The expectation for the Employment Report this morning is that the unemployment rate will remain at 7.0% and that the economy will add approximately 200,000 new jobs.

The big question is what about the 1.3 million people that lost unemployment benefits on December 28th?  Both sides of Congress are not in agreement on what to do and the American public is caught in the middle.

Mortgage rates for the most part have been flat for the last 2 weeks.  Minor movement up and down has occurred, but overall the rise in mortgage rates towards the end of 2013 is playing a role in housing.

Applications for purchase applications declined 1% in the prior week.  According to the Mortgage Bankers Association, applications for purchase loans are down a whopping 20% from the same time last year.  Applications for refinances tipped up last week by 5%, but that is not very significant since the total number of people refinancing at this point is much lower than in months and years past.

Next week potential market moving reports are on the lighter side once again.

·        Tuesday January 14^th – Retail Sales

·        Wednesday January 15^th – MBA Applications and Producer Price Index

·        Thursday January 16^th - First Time Jobless Claims and Consumer Price Index

·        Friday January 17^th – Housing Starts and Industrial Production

I appreciate your business and look forward to talking to you soon! Have a great day!!!
 

Sincerely,

Cindy Tomlinson
Loan Officer

USLending Company

BRE Lic # 01520422
NMLS # 214851   

PS… FOLLOW ME on Facebook for the latest Mortgage updates

All-Cash Sales Reach New High In November

All-cash purchases accounted for 42 percent of all residential property sales in November, up from 38.8 percent in October and also up from a year ago to the highest level since RealtyTrac began tracking all-cash purchases in January 2011, the company report

States with the highest percentage of cash sales last month included Florida (62.7 percent), Georgia (51.3 percent), Nevada (51 percent), South Carolina (50.3 percent), and Michigan (49 percent).

According to RealtyTrac, the national median sales price of all residential properties—including both distressed and non-distressed sales—was $169,000 in November, up 1 percent from October and up 7 percent from November 2012. It was the 19th consecutive month median home prices have increased on an annualized basis.

The median price of a distressed residential property—in foreclosure or bank owned—was $110,500, 39 percent below the median price of $181,500 for purely non-distressed residential properties.

Read More . . . 

Market News Update - Mixed Response from Market After Budget Deal

On Thursday the Republican controlled House of Representatives approved the proposed budget plan placed for a vote.  This budget actually appears to have the support of the majority of Republicans and just enough Democrats for it to be passed.  Next week the Democrat controlled Senate will vote on the bill, which is expected to pass by a narrow margin.

The response from the markets has been mixed.  The stock market has been dropping with the belief that the latest batch of positive economic data, combined with the government appearing to pass a budget, and a seemingly slowly improving job market, will likely move the Fed closer to tapering the stimulus program.  Bond yields have been rising on this news as well, moving interest rates higher over the last couple of days.

Last week mortgage rates declined slightly bringing some home buyers and refinance borrowers to take action.  Purchase applications increased 1.0% while refinances inched up 2.0% from the prior week.  With the latest jump in interest rates this week in response to the budget deal, it is likely that the MBA mortgage applications report will show declines next week.

Adding to the hopes that the economy might continue to recover is the latest report on retail sales.  Overall retail sales jumped 0.7% in November following a rise of 0.6 % in September.

At long last the foreclosure crisis is showing signs that it’s finally fading away.  The number of foreclosure filings dropped 15% down to 113,454 in November, which is the largest decline since November 2010.  In addition, the total number of filings is the lowest since December 2006.  The number of filings is down 37% from the same time last year. 

Some real estate agents have even said that they are noticing much faster responses from many banks when it comes to approving short sales.

 

I appreciate your business and look forward to talking to you soon! Have a great day!!!
 

Sincerely,

Cindy Tomlinson
Loan Officer

USLending Company

BRE Lic # 01520422
NMLS # 214851   

PS… FOLLOW ME on Facebook for the latest Mortgage updates