Last Week in the News (December 29, 2008)

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending December 19 soared 48% from the previous week. Purchase volume increased 11%, while refinancing applications jumped 63%. Total applications and refinance activity were at their highest levels since July 2003.

On Tuesday, December 23, the Commerce Department reported that the gross domestic product, the broadest measure of economic health, declined at an annual rate of 0.5% in the July-September quarter. It was also reported that corporate profits fell 1.2% in the third quarter.

The Reuters/University of Michigan consumer sentiment index rebounded this month from the lowest level in 28 years. The index rose in December to 60.1 from 55.3 in November. Economists had forecast a reading of 58.8. The increase was attributed to easing inflationary pressures and a decline in gasoline prices. According to AAA, the price of a gallon of regular unleaded gasoline at the pump was $1.65 on December 23, compared with a record high $4.11 on July 17.

The median sales price of an existing home fell 13.2% in November to $181,300, from $208,000 a year ago. It was the biggest year-over-year drop since recordkeeping began in 1968, said the National Association of Realtors. The median price for a new home sold in November declined 11.5% from a year earlier to $220,400.

New home sales dropped 2.9% in November to an annual sales rate of 407,000 units, according to a report by the Commerce Department. The rate was the lowest since January 1991.

The National Association of Realtors reported existing home sales fell 8.6% in November to an annualized rate of 4.49 million units. Economists had expected an annualized rate of 4.93 million.

Meanwhile, the Commerce Department reported that orders for durable goods dropped by 1%, less than the 3% decrease economists had expected.

Upcoming on the economic calendar is a report on consumer confidence on December 30.

Last Week in the News (December 22, 2008)

On Monday, December 15, it was announced that the National Association of Home Builders/Wells Fargo housing market index remained at a record low of 9 in December. That is the same reading for the previous month of November. An index reading higher than 50 indicates positive sentiment about the housing market.
The Federal Reserve reported that industrial activity fell by 0.6% in November. Economists had expected a decline of 0.8%.

The Labor Department reported Tuesday that consumer prices fell 1.7% in November — the largest decrease since record keeping began in 1947. The report reflected a steep fall in energy costs, which dropped 17% in November, following an 8.6% decline in October.

On Tuesday, the Fed cut its key interest rate to a range of zero to 0.25%. This brings the interest rate that banks charge each other to the lowest level on record.

The Commerce Department said construction of new homes fell in November by 18.9%, the biggest drop in 25 years. The decline pushed construction down to a seasonally adjusted annual rate of 625,000 homes, the slowest pace on records dating to 1959.

The Conference Board reported Thursday that its index of leading economic indicators fell for the second straight month, dropping 0.4% in November. That was slightly better than the 0.5% decline economists had expected. The index is designed to forecast economic activity in the next three to six months.

Upcoming on the economic calendar are reports on existing home sales and new home sales on December 23, and durable goods orders on December 24.

NOW is the Time to Get a Home Loan!

Mortgage rates have dropped AGAIN and are at their lowest point in generations.

If you have been on the fence about buying or refinancing a home, now is the time to act.

Interest rates are at their lowest since the 1960s and home prices in some areas are at 2003-2004 levels. Add to that recent declines in energy prices and lower consumer interest rates, and you have a great holiday recipe for success.

In many markets, falling prices are bringing out buyers who have been waiting patiently to buy, and now they are scooping up great bargains and hot properties.

Don’t wait until next week. Call me today to get pre-approved. Rates have been very volatile and this great opportunity might not survive the holidays!

Whether you are looking to buy or refinance, I am here to help.

Don’t wait - contact me today!

Last Week in the News (December 15, 2008)

The Reuters/University of Michigan consumer sentiment index unexpectedly rose in December to 59.1. The index had hit a 28-year low of 55.3 in November. Economists attributed the gain to the fall in gasoline prices.

The National Association of Realtors reported Tuesday that the pending home sales index dropped 0.7% to 88.9 in October from a reading of 89.5 in September. The October reading was 1% lower than a year earlier. Economists were expecting a drop of 3.2%. Pending home sales declined by 4.3% in September.

On Wednesday, the Commerce Department reported that wholesalers reduced their inventories by 1.1% in October. It was the biggest cutback since November 2001. Economists had expected a decline of only 0.2%. Sales at the wholesale level plunged by 4.1% in October, the largest decline on record.

The Labor Department reported Thursday that applications for jobless benefits in the week ending December 6 increased to a seasonally adjusted 573,000 from 515,000 in the previous week. The increase was more than the 525,000 claims economists had expected.

The Commerce Department reported that retail sales dropped 1.8% in November. The decline was the fifth straight monthly drop. Also, it was reported that total business inventory decreased 0.6% in October, three times the amount economists had expected. It was the biggest drop in inventories since August 2003.

The Labor Department reported the producer price index, which tracks wholesale prices, fell 2.2% in November. That followed a record 2.8% drop in October. Economists had expected a 2% decline.

Upcoming on the economic calendar are reports on consumer price index and housing starts December 16, and the index of leading economic indicators on December 18.

Last Week in the News (December 8, 2008)

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending November 28 soared 112.1% from the previous week. Purchase volume increased 38%, while refinancing applications jumped 203.3%.

The Labor Department said that productivity rose at an annual rate of 1.3% in the third quarter. That’s down from the 3.6% growth rate in the second quarter, but higher than the 0.9% rise economists expected.

The Commerce Department reported Monday that construction spending dropped by 1.2% in October, a bigger drop than the 0.9% decline analysts had expected.

The National Bureau of Economic Research officially announced the U.S. economy slipped into recession in December 2007. The economic expansion from November 2001 to December 2007 lasted 73 months. The previous expansion of the 1990s lasted 120 months. The average expansion since the end of World War II has lasted 57 months.

The Institute for Supply Management reported the monthly index of manufacturing activity fell to 36.2 from October’s 38.9. The November reading was the lowest since May 1982. The institute also announced its services sector index fell to 37.3 in November from 44.4 in October. Economists had expected a reading of 42. Figures below 50 indicate contraction.

The Commerce Department reported Thursday that factory orders dropped 5.1% in October, the largest decrease since an 8.5% fall in July 2000. Economists had expected a 4% drop.

Upcoming on the economic calendar are reports on pending home sales on December 9, and producer price index and retail sales on December 12.

Mortgage Rates Drop on Fed Action!

Due to economic rescue actions by the Federal Reserve and Federal Home Loan Banks, mortgage rates are at their lowest point this year!

If you have been on the fence about buying or refinancing a home, now is the time to act.

Interest rates are extremely low and home prices in some areas are at 2003-2004 levels. Add to that recent declines in energy prices and lower consumer interest rates, and you have a great holiday recipe for success.

Don’t wait until next week. Call me today and get pre-approved. Rates have been very volatile and this great opportunity might not survive the holidays!

In many markets, falling prices are bringing out buyers who have been waiting patiently to buy, and now they are scooping up great bargains and hot properties.

Whether you are looking to buy or refinance, I am here to help.

Don’t wait – call today! See www.sherryconnor.com for contact information.

Last Week in the News (December 1, 2008)

On Monday, November 24, the National Association of Realtors said existing home sales declined 3.1% to a seasonally adjusted annual rate of 4.98 million units in October from a downwardly revised pace of 5.14 million in September.

On Tuesday, the Standard & Poor’s/Case-Shiller home price index showed that home prices declined a record 16.6% during the third quarter from the same period a year ago. That eclipsed the previous record of 15.1%, set during the second quarter.

In an effort to loosen credit and get more loans flowing, the Federal Reserve rolled out two new programs that would provide up to $800 billion. The allocated funds will be broken out as follows: $200 billion to buy credit card loans, auto loans, student loans and loans to small businesses; $500 billion to buy mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac; and another $100 billion to directly purchase mortgages held by Fannie, Freddie and the Federal Home Loan Banks.

The Commerce Department reported Wednesday that new home sales fell 5.3% in October to a seasonally adjusted annual rate of 433,000, the lowest level since January 1991. The drop was larger than had been expected. In September, new home sales gained 0.7%.

Also on Wednesday, the Commerce Department reported that consumer spending fell by 1% in October, after declining 0.3% in September. It was the biggest decline since September 2001.

Orders for durable goods decreased 6.2% to $193 billion in October, more than double the decline economists expected. It was the biggest decrease since October 2006, when orders fell 8.3%. Orders for durable goods have now fallen for three straight months.

Upcoming on the economic calendar are reports on construction spending on December 1 and factory orders on December 4.

Mortgage Market Update - 4/1/2008

Wall Street starts 2nd quarter 2008 off with a BANG. (And that's no April Fool's joke)
The Dow currently up 295 points on better than expected ISM Manufacturing Index. Economists were expecting this one to fall but the reading posted up to 48.6. (Keeping in mind that a reading under 50 suggest contraction in the market) Along with this, Oil drops to $100 a barrel and the dollar gains.
10 yr Treasury notes sell off leaving the yield up to 3.52% and pushing mortgage rates higher today. MBA purchase application reports tomorrow followed by Jobless Claims on Thursday.
Good Luck,

Mortgage Market Update - 3/31/08

Today the Stock market struggles out of the gate and Bonds are up slightly. The Chicago Purchasing Managers Index reported better than expected read on Manufacturing. The report showed that Regional manufacturing was at 48.2 up from 44.5 the previous month. The market was expecting a read of 46.0...signaling a welcome increase. However, any read under 50 still signifies that the market is still weak.
On other news...Alphonso Jackson (HUD Secretary) announces his resignation effective April 18th, 2008. He is under investigation over a friend who was paid $392K as a construction manager in New Orleans post Katrina.
Treasury secretary Henry Paulson lays out the Bush Administrations plan to overhaul the Financial Markets. The changes would mark the biggest overhaul to Wall Street since the Great Depression and would allow the Central Bank more control. It would take a couple years to fully engage the policies and prior attempts have failed. Only time will tell and this will certainly prove to be the one to watch!
Reports due out tomorrow: ISM Manufacturing, Construction spending and Vehicle Sales.
That's a wrap...Good Luck

Mortgage Market Update - 3/28/08

Out of the gate Personal Income rose .05% in February ahead of the .03% predicted by economists. This has the stock market up this morning and the bonds are down. Even though the Personal Income reported higher than expected, Consumer Spending remaines weak.
Personal Income and Consumption reports monthly and affects the mortgage markets directly. An increase in Personal Income and Consumption will cause the Bond Market to decline...Mortgages rates will be up. Got It?
It is important to note that the consumption portion of this report represents over half of the GNP (Gross National Product)...which reports quarterly.
So today, with a slight increase in Personal Income and Consumption...you expect slightly higher mortgage rates today.
Good Luck,

Mortgage Market Update - 3/26/08

Stocks open down this morning as investors face bad news from all angles...New Homes Sales down to a new 13 year low in February, Factory orders were down and oil spiked $3 a barrel. On top of that, the proposed $19 million buyout of Clear Channel is not to clear as banks are relunctant to lend.
Bonds rally as the yield hits 3.45% down from yesterday at 3.5%. Should see lower mortgages rates today...but that could all change quickly.
Good Luck!

Mortgage Market Update - 3/18/08

All eyes on the FED this morning as many expect a huge drop in Fed Funds rate...some suggesting more than a point. That would put the prime lending rate at 5% or less...The question remains, Will this spark the economy?

Banks are still tight on lending. Especially in the Jumbo sector and reduced LTV's. And Wall Street is nervous on the possibility of more fall out from the lending institutions. I can honestly say I agree with them on their concerns. Sit tight and get ready for the wild ride ahead...
Housing starts due out soon, along with reports from Lehman and Goldman Sachs...These reports alone could send the Stock market on a plunge. Get ready for a wild ride today.
More update at 10:00am...

Mortgage Market Update - 3/17/08

A lot going on in the market right now. First the big news over the weekend...The Fed cut the discount rate by a quarter and JPMorgan Chase is acquiring Bear Stearn. The Fed's discount rate cut to 3.25% (from 3.5%) should provide banks more ways to obtain short term loans. The Fed will meet on Tuesday to lower the Fed's fund rate...currently expecting a cut of .5%...This would affect the rates given to consumers for short term loans.

The buy out of Bear Stearn has wall street nervous this morning about the financial markets. The Bond Yield is currently at 3.37% and mortgage interest rates have posted out slightly better than Friday. I recommend locking and keeping a close eye on the financial markets today. Anything Goes, expect the unexpected!

Good Luck,

Mortgage Market Update Pre-session 2/26/08

The markets do not open for another hour and 45 minutes but I just read some interesting news that could affect the stock market very positively today. Visa, the credit card company, is going public! The IPO (Initial Public offering) could raise up to $19.0 billion. So why is this important...Because creditors will reap the benefit and right now, creditors need all the help they can get.
Major lenders such as JPMorgan Chase, Bank of America, etc. all hold stock in Visa. A successful IPO could assist these banks in easing the credit crunch we've all been feeling lately! More to follow on the rate market around 10:00am. Good Luck.

Mortgage Market Update 2/25/08

Stocks and bonds...What will we do... Homes Sales data showing January sales down .04% from December...This was expected. However the stock market may survive today off the talks of Ambac...The bond insurer that is close to reaching an agreement for more capital.
Anything goes this week. Watching the Bond Yield (currently at 3.82%) a drop below 3.8 could cause a mid day price for the better. However a rise over 3.85% could be a rate increase.
Keeping you posted!

Mortgage Market Definition: Recession

By Definition: A Recession is the decline in a country's gross domestic product (GDP) for 2 or more quarters successively. Personally, many of us may feel like we are already in a recession but Wall Street looks at the GDP...So if the GDP does not decline then technically there's no "recession".
What we are experiencing is a slowing of the economy and an insight that a recession is coming. (It just affects us more now because of the housing hit!) Our industry has been dramatically affected...therefore we "feel" the affects more heavily.

Mortgage Market Update 2/22/08

Happy Friday! The Market is really flat today...Typical of a Friday when there's no real data being released. Get ready for Monday and next week as Existing Homes Sales, PPI, and Consumer Confidence all report next week. It could be a wild ride starting Monday.

As far as the stimulus package goes, Rumor has it the details of the plan will be available on March 7th, 2008. I will post the information as soon as it is readily available.

Have a great weekend!

Mortgage Market update 2/21/08

Nice surprise to see the bond yield down to under 3.8%, If you haven't already noticed on your rate sheets, Rates are lower. Stocks not doing to much today which is why the bonds are the go to items of the day. Keep an eye on those bonds. If the yield drops below 3.75% you will probably see lower rates mid-day.

Good Luck

Mortgage Market Update 2/20/08 - Mid-day rate Reprice

I have GOOD news this time! Don't get too excited - It's a slight change for the better. The bond yield dropped below 6.90% due to bond sales rising. The stock market is basically flat ...and word on Wall street/Fed etc. is that this year is looking a lot like 1991 recession.

I entered the mortgage world in 1991, so I remember what it was like. For those of you who remember that year...It was tough! But we all survived and we will survive this too.

Good Luck!

Mortgage Market Update for 2/20/08

This is going to be another crazy day in the markets. Just when you thought rates would not go higher, They did!

Two key reports came out: housing starts and CPI...The housing starts were up (barely) and so was the Consumer Price Index. The stock market seems a little slow out of the gate this morning but the bond yield is over 3.9% which means higher rates for us in the mortgage profession. The rising rates have caused the mortgage app volume to drop dramatically for the week ending 2/15 and I can attest to that one personally. Don't rule out refinances yet. There are still a large number of eligible borrowers that need to refi to a fixed rate loan...We just have to find them!

Good Luck!