Market News Update - Slow Uptick in Housing Sales

The good news on housing keeps coming.  The latest news out of the housing sector is a 2.4 percent rise in the pending home sales index, a gain that points to further improvement for existing home sales. This is also a 12.4 percent increase over the same time last year and the highest in nearly 2-1/2 years. Sales of existing homes have been trending higher for the last year, though gains have been slightly behind those for new homes.

Home prices are clearly on the recovery with Case-Shiller reporting a 0.9 percent rise for its 20-city index. This is the fifth rise in a row and the fourth very strong increase in a row. The year-on-year rate is a .5% improvement and shows the first positive reading in nearly 2 years.

The Mortgage Bankers Association reported that purchase mortgage applications increased 1.0 percent in the week of August 24^th.  This is the second straight week of a significant increase.  The refinancing index, which had been very strong earlier in the summer, fell 6.0 percent for a second straight weekly decline.  Mortgage rates moved lower after the recent increases, however this was not significant enough to have a major impact on stimulating refinance applications.

The jobs market is improving, but at a snail’s pace and not at a speed that is creating much optimism about future employment reports.  For the week of August 18^th claims remained the same, which shows that there is little movement in the employment sector.  Next week all eyes will be on the national employment report due to be released on Friday morning at 8:30AM.  Few analysts expect much in the way of improvement in the national employment picture.

The stock market has been trading in a fairly narrow range this week. This is typical for this time of the year as many people are on vacation and others are busy getting their children back to school.  Additionally many investors are sitting on the sidelines waiting and watching for any hint from Fed Chairman Bernake on the possibility of another round of stimulus. 

For the present time “stability”, if we want to call it that, seems to have taken a little bit of a hold in the European debt crisis.  The interest rates on government bonds in Europe have been able to sell with yields below 7%.  This is a critical measurement, in that when government debt in Europe is above that mark, many believe that the governments do not have the capability to sustain the interest payments and that ultimately the government will default. 

The one thing I would say if I was a gambler is that I don’t believe things will remain quiet for long!

 Next week’s economic reports are:

• Tuesday September 4^th – ISM Manufacturing Index and Construction Spending
• Wednesday September 5^th  – MBA Applications
• Thursday September 6^th – First Time Jobless Claims and ADP Employment Report
• Friday September 7^th – National Employment

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

Sincerely,

Cindy Tomlinson
Loan Officer

USLending Company

DRE Lic # 01520422
NMLS # 214851   

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