Gary`s Blog in South Jersey

Spotting and Knowing Property Value Trends

Knowing property value trends can be very helpful to you as a buyer, seller or investor. As a buyer, you can pinpoint bargains in areas that are trending upward (or downward) in price. As a seller, you can use the information as part of the bargaining process to get the maximum price from the sale. As an investor, you can use the latest forecasts and trends to determine whether you want to invest, when you want to invest, and how much to put into a property. 

Remember, the trends are not guarantees of future performance; they're an educated guess as to which way the market is moving.Whatever your real estate goals, you want the latest and best information, and you want it from experienced professionals. In terms of your neighborhood and/or city, your local real estate agent is the best source for weekly and monthly trends. After all, it's their job to stay on top of such trends in the markets they serve. 

Other organizations provide state, regional and national forecasts. They're often updated on a monthly or quarterly basis. Sources of Information Thanks to the Internet, there are many, many sources for data on real estate property value trends. 

For state trends, go to the Federal Housing Finance Agency website (http://www.fhfa.gov/Default.aspx?Page=215). Click on your state to get the Housing Price Index (HPI). 

If you're wondering exactly what the HPI measures and how it's calculated, here's what the site says: "The HPI is a broad measure of the movement of single-family house prices. The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or re-financings on the same properties.

This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975. The HPI serves as a timely, accurate indicator of house price trends at various geographic levels. Because of the breadth of the sample, it provides more information than is available in other house price indexes." So, if you want property value trends for Nebraska from the FHFA site, click on "State HPI Summary" and scan down the list of states until you find Nebraska. The handy table gives rankings and trends in quarterly, 1 year, 5 year and "Since 1991Q1" columns.On the same site, you can also click on "Research and Analysis," and you'll get a list of government and industry sites which will provide you with information on property trends. Note: The FHFA site doesn't provide predictions; it simply reports data. To get analysis and predictions, try the respected RealtyTimes.com. It reports on current market conditions and provides advice to consumers as well. Another site for information on residential properties is Zillow.com.

To find local information, fist click on the "Local Information" tab. That takes you to the page where you'll find the "State," "City," and "Nearby Neighborhoods" tabs. Click on the appropriate names, and you have local information! There are many, many other websites from which you can gather property value information. 

I don't have the space to list them all, so here's a partial list of major industry and governmental agencies: 

- National Association of Realtors = Freddie Mac 
- National Association of Home Builders 
- Census Bureau 

Of course, the network, cable, and satellite channels report many of the finding from the sources listed above on a national basis. But, if you want local information, I recommend you work with your local real estate agent! He or she is best positioned to give you the latest information on property value trends. 

To see what I can do for you in that regard, please contact me direct today at 609-338-1339 on my cell phone. Have a good day!  Gary Simmens Balsley/Losco Real Estate

FHA now accepts e-signed third party documents, including real estate contracts

Federal Housing Administration to Accept DocuSign for Real Estate Contracts Nationwide

Buyers, Sellers, Agents and Lenders Will Save Significant Time and Money on Mortgage Document Approvals with DocuSign eSignature Services

SEATTLE – April 8, 2010 - DocuSign^®, the leader in on-demand electronic signature solutions, today announced that e-signed third-party documents, including real estate contracts, are now being accepted by the Federal Housing Administration (FHA).  DocuSign spearheaded an industry-wide effort to move the FHA to formally recognize e-signed third-party documents. The April 8, 2010 dated FHA mortgagee letter is the first in what is expected to be a series of responses to this initiative. With this policy statement from the nation's largest mortgage insurer, real estate professionals can use DocuSign to get real estate contracts, addenda and other documents signed electronically, and their buyers can apply for FHA insurance with confidence. The FHA mortgagee letter can be found at http://nhl.gov/offices/adm/hudclips/letters/mortgagee/files/10-14ml.pdf.

"We commend FHA's action today. By clarifying its position on electronic signatures, the process of buying, selling and financing of homes across the country will be greatly improved," said Ken Moyle, chief legal officer at DocuSign.  "Buyers, sellers and agents can use DocuSign's online process to eliminate the time, expense and environmental impact of printing, delivering and signing large stacks of paper documents, and mortgage lenders can take comfort in knowing that DocuSign's e-signature process is designed for legal compliance in all 50 states and is fully evidenced by a comprehensive audit trail."

Real estate agents can quickly access the DocuSign e-signing service from any laptop with Internet access, drag and drop familiar yellow StickEtabs® onto the contract and send the envelope. The recipient immediately receives an email notification that can be accessed through a computer or any Web-enabled mobile device, including Apple® iPhone®, RIM® BlackBerry®, Google® AndroidTM, Windows Mobile®, adopts an e-signature and signs the document. Once completed, an email notification is sent to all parties with a link to the final executed document. The result is a legally binding, fully ESIGN-compliant document supported by a comprehensive audit trail.

As on-demand software-as-a-service (SaaS), DocuSign requires no additional software or hardware purchases and no downtime for training. DocuSign eSignature service offers users one of the easiest, most simple to use and safest electronic signature experiences available today

Linwood, NJ Sold and Under contract home report for 1st quarter of 2010

LINWOOD UNDER CONTRACT FROM JANUARY 1 TO MARCH 31, 2010

ADDRESS ASKING PRICE BEDROOMS BATHS

105 E. Berkshire $729,000 4 2.5

6 Crestwood $469,000 5 2.2

17 Hamilton $449,900 4 2.5

303 W. Poplar $134,900 3 2

113 Seaview $205,900 3 1

503 W. Wilson $315,000 4 2

Please disregard if your property is listed with another broker. This information is complied from the SJSRMLS system for the past 90 days. This information is based in

whole or in part on data supplied by our SJSRMLS system. That system does not guarantee accuracy for the information supplied. Data maintained by SJSRMLS may

not reflect all real estate activity in the market.

THE SIMMENS REPORT

Highlighted properties are transactions that our company participated. The Realtor sponsoring

this community information service ad is not making any representation that they were involved in any other

particular transaction whatsoever as printed in this report except for the highlighted properties.

LINWOOD SOLD FROM JANUARY 1 TO MARCH 31, 2010

ADDRESS ASKING PRICE SOLD PRICE BEDROOMS BATHS

218 W. Belhaven $475,000 $432,500 4 2.5

32 Crossing $378,000 $360,000 4 2.5

503 W. Davis $249,900 $228,900 4 1.5

503 Garfield $319,000 $312,000 3 3

315 Kirklin $184,900 $175,000 3 1

1 Liberty $275,000 $255,000 3 2.5

2 Mill $949,000 $870,000 4 3.2

303 W. Van Sant $199,500 $150,000 5 2.5

Please disregard if your property is listed with another broker. This information is complied from the SJSRMLS system for the past 90 days. This information is based inwhole or in part on data supplied by our SJSRMLS system. That system does not guarantee accuracy for the information supplied. Data maintained by SJSRMLS maynot reflect all real estate activity in the market.

NJ Gov. Christie getting tuff on costs-lobbyists.

Gov. Chris Christie has called on Tuesday told all state agencies, authorities, boards and commissions to stop hiring lobbyists.
He also said his administration will review whether certain authorities should be eliminated.
At a news conference, Christie signed an executive order that forbids authorities from signing new contracts with lobbying firms, and orders that existing contracts must expire or be legally terminated as soon as possible.

In making the rule, Christie blasted what he called "the shadow government economy," namely the work of around 700 state authorities, boards, agencies and commissions, whose members are not elected but administer large budgets.
"They spend billions of dollars every year of taxpayer money, fee-money, toll-money that is collected from the people of New Jersey and others. I have been... significantly disturbed by the reports of some of things we've seen going on, the ways that some of that money is expended."

The Press of Atlantic City reported on Monday that Christie vetoed budgets of the state thoroughbred and standardbred horse breeding associations in part because the thoroughbred group planned to spend $40,000 on lobbying.
The order further says that each authority must provide a list of all its lobbying contracts to the Governor's office by March 1.

And by May 15, each head of a government department must recommend to the governor which of the authorities in the department should survive. The governor said unnecessary authorities could be scrapped.
Christie specifically said the order extended to the two horsemen's associations, both registered as 501c3 non-profit organizations. As 501c3s, those groups are allowed to spend a small part of their budget on lobbying.

But Christie said he wanted to see those groups cease lobbying altogether.
"We're telling them not to be spending their money on lobbyists. And the tax code may have it be permissible, but this governor is not going to have it be permissible."
The governor on Tuesday also capped all travel by employees of the authorities at $250 unless otherwise approved by the governor's office.

Economic Highlights for the Week Ending February 5, 2010

Volume 16, Number 4 Economic Highlights for the Week Ending February 5, 2010

MONDAY, February 1st Manufacturing activity expanded for the sixth straight month in January. The ISM index increased to 5.84% from 54.9% in December. The gain last month was led by production increases related to inventory investment. Severe declines in factory activity appear to be over and a moderate recovery from very low levels is underway. Personal income rose 0.4% in December, the fastest pace of growth recorded since stimulus checks were issued last May. Consumer spending rose a modest 0.2% on the month as the savings rate increased to 4.8%. Income growth, although improved, remains modest and consumers remain cautious about spending.

TUESDAY, February 2nd The pending home sales index increased to 96.6% in December from a level of 95.6% in November. The index plunged in November in conjunction with the original expiration of the homebuyer tax credit and has not yet rebounded significantly. Now that the tax credit has been extended and expanded, the pending home sales index and thus existing home sales are expected to increase over the next several months. Motor vehicle sales declined 4.2% in January to an annual rate of 10.8 million. Total vehicle sales are off to a weak start this year, constrained by a weak labor market, still tight credit and at this time the suspension of sales by Toyota. Although very weak, vehicle sales are expected to continue trending mildly higher throughout this year.

WEDNESDAY, February 3rd The MBA mortgage applications index surged 21.0% to 620.7% for the week ending January 29. The purchase index increased 10.3% on the week as the refinance index rose 26.3%. Refinancing activity accounted for slightly less than 70% of new mortgage application activity. Despite this week’s gains, the level of mortgage activity remains quite low indicating stagnation in the housing recovery. The ISM service sector survey increased to 50.5% in January from 49.8% in December. An index level over the key 50% level indicates expansion in the sector. Like many other sectors of the economy, the recovery in service sector activity remains quite subdued.

THURSDAY, February 4th Productivity grew at an annualized pace of 6.2% in Q409 as unit labor costs fell a more-than-expected 4.4%. There was a large increase in output but a smaller increase in the hours worked leading to the growth in productivity. Firms are producing more to meet demand without hiring new workers. Also, the weak labor market combined with productivity increase led to another steep decline in unit labor costs. Jobless claims increased 8k to 480k for the week ending January 30. It may be that some of the holiday induced volatility has yet to work its way through the data, accounting for the elevated weekly reading. Expectations are for claims to decline from here and retake their pre-holiday improved level. If not then, it would indicate a stalled labor market recovery. Chain store sales rose 3.1% in January from January one year ago. Most major retail categories posted gains from last year except for drug store sales which declined 1.4%. Wholesale clubs in particular received a boost from higher gas prices. Because chain store sales were at such a low level last year, the comparisons this year will remain favorable. Sales will continue to increase, modestly, from very low levels going forward.

FRIDAY, February 5th Payroll employment fell another 20k in January compared to expectation for a 10k increase. Employment has declined 3.0% over the past year for a total of 4.02 million jobs. Since the onset of the recession in December 2007, the economy has shed 8.42 million jobs. Jobs have now been lost in 24 of the past 25 months. On a more positive note however, the unemployment rate fell to 9.7% from 10.0% previously even as the workforce increased moderately.

Stock Market Close for the Week

Index Latest A Week Ago Change DJIA 10012.23 10067.33 -55.10 or -0.55% NASDAQ 2141.12 2147.35 -6.23 or -0.29%

WEEK IN ADVANCE

Light data flows in the week ahead provide mostly second-tier indicators with the exception of retail sales for January, due out on Thursday. With consumer spending accounting for two-thirds of all economic activity, retail sales are always on the radar. Other than that, the markets will have a chance to absorb the chronically sluggish employment data while the Treasury auctions another $81 billion in short and long term notes and bonds.

Key Interest Rates Latest 6 Mos Ago 1 Yr Ago Prime Rate 3.25 3.25 3.25 Fed Discount 0.50 0.50 0.50 Fed Funds 0.15 0.18 0.23 11th District COF 1.828 1.599 2.757 10-Year Note 3.56 3.77 2.92 30-Year Treasury Bond 4.52 4.52 3.62 30-Yr Fixed (FHLMC) 5.01 5.22 5.25 15-Yr Fixed (FHLMC) 4.40 4.63 4.92 1-Yr Adj (FHLMC) 4.22 4.78 4.92 6-Mo Libor (FNMA) 0.38438 0.92500 1.6600 Sources: IBC' s Money Fund Report; Bank Rate Monitor; Federal Home Loan Bank of San Francisco

February 2010 Real Estate Update

Serving South Jersey. Gary Simmens Broker/Associate February 2010 WELCOME. TIME-SAVING PRESET PROPERTY SEARCH LINKS IN THE LEFT-GREEN COLOR AREA, NEED MORE DETAILS? CALL US. SEE HELPFUL LOCAL MARKET CONDTIONS ON THE LOWER RIGHT. Copyright 2010 Realty Times All Rights Reserved. Mortgage Rates Steady   In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage averaged 4.98 percent for the week ending January 28, 2009 - down from the previous week when it averaged 4.99 percent.   Last year at this time, the 30-year fixed-rate mortgage averaged 5.10 percent.   "Rates held steady this week ahead of the Federal Reserve's (Fed) policy committee meetings," Mortgage Rates Source: Realty Times U.S. averages as of January 28, 2010: 30 yr. fixed:   4.98% 15 yr. fixed:   4.39% 1 yr. adj: 4.29% said Frank Nothaft, Freddie Mac vice president. The Fed announced on January 27th that economic activity has continued to strengthen.

House Hunters Out Early

The springtime spurt in home buying may hit before the snow melts this year as buyers scramble to meet an April 30 tax credit deadline.
The spring buying season typically takes off in March and runs through May. But buyers who want to claim this year’s tax credit—up to $8,000 for first-time buyers and up to $6,500 for repeat buyers -- must have signed purchase contracts by April 30. And they have to complete the deal by June 30.
"I expect the buying season will be moved up," says Vicki Cox Golder, President of the National Association of Reatlors. Sales "are going to take off in February and March and really take off in April. My concern is that the move-up buyer hasn’t thought what they need to do. Their window is really short. They have to coordinate closing dates."

Nearly 11 Million People Now Working from Home

The number of people who worked at home increased by nearly 2 million, from about 9.5 million in 1999 to about 11.3 million in 2005, according to new data released by the U.S. Census Bureau. Nearly half of these home workers had college degrees and nearly half of them earned $75,000 a year or more.
It would seem that with all those people working from home, having a dedicated home office would be a smart move for a renovator. But that’s not the case. According to the 2010 Remodeling Magazine Cost vs. Value report, the average home office costs $28,375 to build and returns $13,648 at resale. That’s a cost vs. value of only 48.1%.
The median monthly earnings of workers who worked at home were about $2,400 in 2005.
Resolve to Take a Look at Refinancing
If you haven't looked into refinancing your mortgage under federal programs, you could be missing an opportunity to save money, keep your home and give the economy a little juice.
Federal mortgage refinance programs have given more than 2 million homeowners a better shot at holding on and the economy a much needed shot in the arm.
What's more, the year began with fixed interest rates hovering slightly below 5%, but still near record lows, according to Erate.com.
First American CoreLogic's "How the U.S. Consumer Has Benefited from Mortgage Finance Programs in 2009," reveals a group of 2.2 million homeowners have saved an average $120 a month on their mortgage payment -- a 10.5% reduction from the previous mortgage payment.
The study says the refinance activity will result in $2.3 billion in mortgage payment savings for borrowers who refinanced in the first six months of 2009. Over the next five years, the total benefit to homeowners who refinanced in 2009 will grow to $11.5 billion.
This summer, HARP gave a hand up to more homeowners suffering mortgages larger than the value of their home. Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125% of the home's current value.

Gary Simmens Broker/Associate 609-645-0202 Gwhatshisname@aol.com http://www.GarySimmens.com

Gary Simmens Team at Balsley/Losco Real Estate 609-645-0202 PO BOX 892 Northfield, NJ 08225

Economic Highlights for the Week Ending January 29, 2010

Volume 16, Number 3 Economic Highlights for the Week Ending January 29, 2010

MONDAY, January 25th Existing home sales plunged a record 16.7% in December to an annualized pace of 5.45 million. The large decline followed several months of strong sales gains that were primarily driven by the first time homebuyer tax credit which was originally slated to expire on November 30. The tax credit has since been extended and expanded but not before impacting sales immediately afterward in December. Despite the sharp decline in December, total sales are still 15.0% above their year ago level. For all of 2009, sales increased over 5% from 2008, their first annual gain since 2005.

TUESDAY, January 26th The S&P/Case-Shiller 20-city home price index increased 0.2% in November from October and gained 5.3% from November 2008. 14 of the 20 metro areas tracked gained on a monthly basis, seasonally adjusted, and 4 of the 20 areas posted annual gains. The rate of decline slowed in most all areas which is indicative of some price stabilization. Nationwide, home prices are akin to 2003 levels. Consumer confidence increased to 55.9% in January from a level of 53.6% in December. A solid gain in present situation ratings led the index higher although expectations scores rose slightly as well. Even with a better-than-expected reading this month, confidence levels remain depressed as weak labor and housing markets continue to weigh on consumers' attitudes about the economy.

WEDNESDAY, January 27th The MBA mortgage applications index fell 10.9% to 513.0% for the week ending January 22. The purchase index slipped 3.3% as the refinance index tumbled 15.1%. With this week's decline, mortgage application activity is 29.9% lower than its year ago level which suggests stagnation in what was a modest housing market recovery. New home sales declined by 7.6% in December to an annual pace of 342k after an upwardly revised, but still dismal annual rate of 370k in November. Substantial back-to-back monthly declines have left new home sales near their record low rate of 329k registered in January last year. New home sales are tanking again after many months of recovering at a modest pace. Hopefully, the housing market will rebound once again supported by the extended homebuyer tax credit, high affordability, looser mortgage credit and improving jobs picture. The FOMC voted to keep rates in an exceptionally low range of 0% to 0.25% in order to support ongoing recovery in the economy. The Committee acknowledging moderate economic expansion but with substantial resource slack which is likely to restrain inflation at this time. Policymakers maintained their commitment to buying up to $1.25 trillion of agency mortgage backed securities and up to $175 billion of agency debt. In addition the Fed anticipates that most of their special liquidity programs will expire on February 1, 2010 but are prepared to modify these plans if necessary. The Fed and fiscal and market forces have generated the beginnings of an economic recovery and resolved much of the distress in financial markets. With their mission largely being accomplished, details of the exit strategy are emerging.

THURSDAY, January 28th Jobless claims fell 8k to 470k for the week ending January 23. Expectations were centered on a bigger decline to a level of 450k. Consequently claims remain elevated which may indicate renewed weakness in labor market conditions. It may take several weeks for the data to settle down from the fluctuations caused by the holidays.

FRIDAY, January 29th The economy grew at a 5.7% pace in the fourth quarter according to the advance estimate for GDP. This was the strongest pace of economic growth in more than six years. This follows 2.2% growth in Q3. The Q4 expansion was driven by inventory investment which added 3.4 percentage points to growth. Final demand was positive last quarter but still fairly weak. With inventories being cyclical in nature it is questionable whether the current strong growth pace can be maintained in the near-term.

Stock Market Close for the Week

Index Latest A Week Ago Change DJIA 10067.35 10172.98 -105.65 or -1.04% NASDAQ 2147.35 2205.29 -57.94 or -2.63%

WEEK IN ADVANCE

Robust Q4 growth is not expected to continue in the current quarter. Data in the coming week will provide the first look at the economy's footing in the New Year. The employment report for January, due out on Friday, highlights on the economic calendar.

Key Interest Rates Latest 6 Mos Ago 1 Yr Ago Prime Rate 3.25 3.25 3.25 Fed Discount 0.50 0.50 0.50 Fed Funds 0.13 0.15 0.19 11th District COF 2.094 1.832 3.155 10-Year Note 3.59 3.67 2.75 30-Year Treasury Bond 4.50 4.49 3.45 30-Yr Fixed (FHLMC) 4.98 5.25 5.10 15-Yr Fixed (FHLMC) 4.39 4.69 4.80 1-Yr Adj (FHLMC) 4.29 4.80 4.90 6-Mo Libor (FNMA) 0.42969 1.11125 1.7500 Sources: IBC' s Money Fund Report; Bank Rate Monitor; Federal Home Loan Bank of San Francisco

Weekly Economic Update

Volume 15, Number 45 Economic Highlights for the Week Ending December 4, 2009

MONDAY, November 30th The Obama administration announced today that together with the Treasury and HUD they will step up efforts to convert more borrowers who are in the trial phase of the Home Affordable Modification Program to permanent modifications. To increase the conversion rate, a new agency will monitor the nation's largest servicers for the status of each loan and the number of permanent modifications. Currently, about 650k borrowers are in the trial period for modifications.

TUESDAY, December 1st Motor vehicle sales increased 4.5% in November to an annual rate of 10.9 million units. The better than expected sales appear to be clear of the cash-for-clunkers effect of the past several months. Moreover, sales were roughly 5% above the year ago total, the first yearly gain since November 2007. Truck and auto sales are moving in the right direction but remain quite weak due to credit restraints and poor job prospects. The ISM manufacturing index slipped to 53.6% in November from a level of 55.7% in October. The index reading was a bit lower than expected however; the level still indicates modest ongoing expansion in national manufacturing conditions. The pending home sales index rose 3.7% in October to 114.1, its highest level since March 2006. The index is now 31.8% above its year ago level. The index has gained steadily over the last 6 to 9 months indicating stronger existing home sales in November and December. Construction spending was unchanged in October from November after sharp downward revisions in the previous two months. After a substantial three year decline, construction spending now appears to be bottoming out. Any recent gains in total spending are being carried by improvement in the residential sector although homebuilding remains about 60% lower than at its peak. The nonresidential sector continues to tumble while public construction spending remains volatile.

WEDNESDAY, December 2nd The MBA mortgage application index increased 2.1% to 613.7% for the week ending November 27. The purchase index rose 4.1% during the week and is down 35.7% from a year ago. The refinance index gained 1.7% on the week but is 24.6% lower than its year ago level. Refinance activity accounted for more than 70% of all new mortgage activity and has been on a modestly rising trend most of the year as homeowners continue to take advantage of low mortgage interest rates. The Fed's round-up of economic conditions known as the beige book portrays an economy that is recovering irregularly depending on the region and industry. The survey covers the timeframe of late October and November and is compiled in preparation for the next FOMC meeting December 15. The majority of districts reported a pick-up in activity, including consumer spending and residential real estate but the commercial real estate market continued to struggle. Inflation was subdued, labor market remained weak and credit was still an issue. The economy is in the beginning stages of a mild recovery and so monetary policy is expected to be accommodative for the foreseeable future.

THURSDAY, December 3rd Jobless claims fell 5k to 457k for the week ending November 28. Meanwhile, claims were downwardly revised in the previous week to 462k. Declines in the last two weeks put initial claims in a new lower range indicating improved labor market conditions especially compared to the first half of the year. Layoffs appear to have slowed while hiring remains weak.

FRIDAY, December 4th The economy shed only 11k jobs in November, much stronger than a projected payroll decline of 125k. Additionally, upward revisions in the past two months resulted in a net 159k fewer job losses. Steep payroll declines have stopped for the moment possibly laying the foundation for job gains over the next several months. However, with over 7 million jobs lost since the onset of the recession, the road back will likely be long and arduous. Also on a positive note, the unemployment rate fell to 10.0% of the workforce from 10.2% previously.

Stock Market Close for the Week

Index Latest A Week Ago Change DJIA 10388.90 10309.92 +78.98 or +0.76% NASDAQ 2194.35 2138.44 +55.91 or +2.61%

WEEK IN ADVANCE

All eyes will be on the retail sales report for November, due out on Friday in the coming week, for the latest data on the all-important holiday shopping season.

Key Interest Rates Latest 6 Mos Ago 1 Yr Ago Prime Rate 3.25 3.25 4.00 Fed Discount 0.50 0.50 1.25 Fed Funds 0.13 0.19 0.49 11th District COF 1.259 1.380 3.125 10-Year Note 3.47 3.70 2.66 30-Year Treasury Bond 4.39 4.54 3.15 30-Yr Fixed (FHLMC) 4.71 5.29 5.53 15-Yr Fixed (FHLMC) 4.27 4.79 5.33 1-Yr Adj (FHLMC) 4.25 4.81 5.02 6-Mo Libor (FNMA) 0.48813 1.24000 2.59125 Sources: IBC' s Money Fund Report; Bank Rate Monitor; Federal Home Loan Bank of San Francisco

Happy Thanksgiving Everyone

I hope you have a great Thanksgiving this year.
I am thankful to have such a wonderful family. We take for
granted what we have in the world and we need to give thanks
more often to the people around us that make our lives
special.

Happy Thanksgiving From Gary Simmens-Enjoy your day! 

 

Weekly economic review

Volume 15, Number 44 Economic Highlights for the Week Ending November 20, 2009

MONDAY, November 16th Retail Sales jumped 1.4% in October better than expectations for a 0.9% gain. Better than expected retail sales results last months were driven by a 7.4% surge in spending on motor vehicle sales and parts. Excluding the motor vehicle category, retail sales inched up just 0.2%. Building supply, furniture and sporting goods stores all posted declines last month. Over the past year, total retail sales have declined 1.7% but are up 6.0% in the past three months, which is consistent with resurgence in consumer spending, albeit at a modest pace as the economy emerges from recession.

TUESDAY, November 17th The producer price index rose 0.3% in October, less than an expected gain of 0.5%. Food and energy prices both jumped 1.6% during the month which raised the headline number. Excluding food and energy prices from the index, the core PPI declined 0.6% on the month and was up just 0.7% on the year. Core wholesale inflation is now at its lowest point in over 5 years. The outlook is for soft pricing to continue until demand returns in a significant way. Industrial production gained 0.1% in October less than an expected increase of 0.4%. An increase in utilities usage carried the gains last month. The other two categories of output, manufacturing and mining both declined. The utilization rate rose 2 percentage points to 70.7% of capacity in October, which is still weak and indicative of slack in resource usage. Output is starting to gain traction but has some distance to go before returning to strong growth and fuller capacity utilization. The NAHB housing market index remained unchanged at a very weak level of 17 in November from October. Home builder sentiment remains very low amid steady but weak present sales of single-family homes and the same level of foot traffic through model homes. Builders did slightly raise sales projections for six months from now. Improvement in builder sentiment has waned in response to the slower than expected recovery in the housing market but builders do hold out hope that conditions will be better down the road.

WEDNESDAY, November 18th The MBA mortgage applications index dropped 2.5% to 611.7% for the week ending November 13. The purchase index fell 4.7% last week and remains 15.3% lower than its year ago level. The refinance index slipped 1.4% on the week but is up 130.7% on the year. Refinance activity accounted for more than 70% of all new mortgage activity because of a recent downtick in rates. The weak level of purchase applications, now at a cyclical low, does not bode well for a speedy recovery in the housing market. The consumer price index increased 0.3% in October, a bit higher than expected because of rising energy prices. Over the past year, the CPI is down 0.2% as energy prices declined 14.1%. Less food and energy costs, core consumer inflation rose 0.2% on the month and is up 1.7% on the year. Inflation is very mild and is expected to remain soft over the next several quarters as the tepid recovery continues. Housing starts dropped 10.6% in October to an annual rate of 529,000, much less than expected. After a string of gains in the last several months, economists were expecting another gain in October to an annual rate of 600,000 but that level is proving elusive. With this month’s decline, housing starts are 30.7% below their year ago level and are down 76.7% from their January 2006 peak. The outlook for new home construction is mixed at best as builders remain sidelined waiting for large inventories of existing homes to clear, home price declines to abate and jobs and the economy to make a full recovery.

THURSDAY, November 19th Initial jobless claims were unchanged at a level of 505k for the week ending November 14. Claims maintained a new lower range around 500k for the second week in a row. The pace of layoffs has slowed while hiring remains extremely weak. Mortgage rates slipped for the third week in a row. 30-year fixed rate mortgages averaged 4.83% this week compared to 4.91% last week according to Freddie Mac's mortgage market survey. 30-year fixed rates have been below the key 5.0% level since the beginning of November.

FRIDAY, November 20th

Stock Market Close for the Week

Index Latest A Week Ago Change DJIA 10318.16 10270.47 +47.69 or +0.46% NASDAQ 2146.04 2167.88 -21.84 or -1.00%

WEEK IN ADVANCE

New and existing home sales results for October and Treasury auctions worth $118 billion are on tap for the upcoming holiday week.

Key Interest Rates Latest 6 Mos Ago 1 Yr Ago Prime Rate 3.25 3.25 4.00 Fed Discount 0.50 0.50 1.25 Fed Funds 0.13 0.16 0.36 11th District COF 1.272 1.627 2.679 10-Year Note 3.37 3.29 3.38 30-Year Treasury Bond 4.29 4.24 3.93 30-Yr Fixed (FHLMC) 4.83 4.82 6.04 15-Yr Fixed (FHLMC) 4.32 4.50 5.73 1-Yr Adj (FHLMC) 4.35 4.82 5.29 6-Mo Libor (FNMA) 0.56438 1.56500 3.12125 Sources: IBC' s Money Fund Report; Bank Rate Monitor; Federal Home Loan Bank of San Francisco