Just an FYI, many underwriters have started conditioning for W-2 transcripts just like if you were self employed and full returns are needed. This can impact closing time frames.
Monday, June 17, 2013
Inside Lending Newsletter - Market update
QUOTE OF THE WEEK... "The greatest weapon against stress is our ability to choose one thought over another." --William James, American psychologist and philosopher
INFO THAT HITS US WHERE WE LIVE... Here are two thoughts that should relieve some stress for those of us working in the housing market. Fannie Mae's May 2013 National Housing Survey reported that the share of American's who think now is a good time to sell and the share of those who think now is a good time to buy spiked sharply from April to May. 40% of respondents think it's a good time to sell, up from 30% the month before, the largest gain in the survey's 3-year history. And 76% of respondents think it's a good time to buy!
They also reported that respondents expect home prices to go up 3.9% in the next 12 months, another record high for the 3-year survey. Later in the week, Fannie Mae's Mid-Year Outlook predicted housing starts should be up 25% and home sales up 7% for the year. Their economists also feel that any mortgage rate increases are unlikely to trip up the recovery, since affordability remains near historical highs. An online listing site estimated rates could rise to 10.5% on a 30-year fixed-rate mortgage with 20% down payment before it's more affordable to rent than to buy.
BUSINESS TIP OF THE WEEK... Attack your most challenging tasks early in the day when you're most fresh. Save any busy work you have for the afternoon when your energy may slump a little.
Review of Last Week
STOCKS FALL ON FED FEARS... Last week investors got nervous that the Fed may begin tapering its bond buying program at this week's meeting, from the current $85 billion a month rate. The program has helped keep stock prices up and interest rates down, so traders see any tapering as a negative and their fears sent all three stock indexes south for the third week out of the last four. The Fed's bond buying will end when the economy or inflation picks up, so better than anticipated May Retail Sales and hotter than expected PPI producer prices kept many people skittish in the markets.
But wait. There was also evidence the economy is a long way from recovery. The manufacturing sector reported that Industrial Production was flat in May and factory Capacity Utilization dropped for the month. Then the University of Michigan Consumer Sentiment Index dipped more than expected in the preliminary June report. Lastly, continuing unemployment claims went up by 2,000. But on a better note, initial weekly jobless claims fell by 12,000, to 334,000.
The week ended with the Dow down 1.2%, to 15070; the S&P 500 down 1.0%, to 1627; and the Nasdaq down 1.3%, to 3424.
There was enough weakness in stocks and the economic data to send investors back into bonds, pushing up prices after six weeks of declines. The FNMA 3.5% bond we watch ended the week up .10, at $103.16. National average mortgage rates edged up again, but are still at historically attractive levels. As evidence of that, demand for purchase loans was up 5% for the week, and up 6% from a year ago, according to the Mortgage Bankers Association.
DID YOU KNOW?... Analysts feel mortgage rates could rise if the Fed stops its bond buying program. But last week, FOMC member James Bullard said, "...surprisingly low inflation readings may mean the Committee can maintain its aggressive program over a longer time frame."
This Week’s Forecast
NO INFLATION, NO RATE CHANGE, MORE HOME BUILDING, MORE HOME SALES... The closely watched Consumer Price Index (CPI) is expected to show no huge move up for May. The FOMC Rate Decision on Wednesday should leave the Fed Funds Rate untouched. The policy statement will of course be examined for any indications of future Fed moves, as well as for the central bank's overall take on the state of the economy.
On the housing front, analysts predict May Housing Starts will move ever closer to an annual rate of one million units. While more new homes are going up, more Existing Home Sales are being closed. That number is forecast to hit the 5 million unit annual rate for May.
The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
INFO THAT HITS US WHERE WE LIVE... Here are two thoughts that should relieve some stress for those of us working in the housing market. Fannie Mae's May 2013 National Housing Survey reported that the share of American's who think now is a good time to sell and the share of those who think now is a good time to buy spiked sharply from April to May. 40% of respondents think it's a good time to sell, up from 30% the month before, the largest gain in the survey's 3-year history. And 76% of respondents think it's a good time to buy!
They also reported that respondents expect home prices to go up 3.9% in the next 12 months, another record high for the 3-year survey. Later in the week, Fannie Mae's Mid-Year Outlook predicted housing starts should be up 25% and home sales up 7% for the year. Their economists also feel that any mortgage rate increases are unlikely to trip up the recovery, since affordability remains near historical highs. An online listing site estimated rates could rise to 10.5% on a 30-year fixed-rate mortgage with 20% down payment before it's more affordable to rent than to buy.
BUSINESS TIP OF THE WEEK... Attack your most challenging tasks early in the day when you're most fresh. Save any busy work you have for the afternoon when your energy may slump a little.
Review of Last Week
STOCKS FALL ON FED FEARS... Last week investors got nervous that the Fed may begin tapering its bond buying program at this week's meeting, from the current $85 billion a month rate. The program has helped keep stock prices up and interest rates down, so traders see any tapering as a negative and their fears sent all three stock indexes south for the third week out of the last four. The Fed's bond buying will end when the economy or inflation picks up, so better than anticipated May Retail Sales and hotter than expected PPI producer prices kept many people skittish in the markets.
But wait. There was also evidence the economy is a long way from recovery. The manufacturing sector reported that Industrial Production was flat in May and factory Capacity Utilization dropped for the month. Then the University of Michigan Consumer Sentiment Index dipped more than expected in the preliminary June report. Lastly, continuing unemployment claims went up by 2,000. But on a better note, initial weekly jobless claims fell by 12,000, to 334,000.
The week ended with the Dow down 1.2%, to 15070; the S&P 500 down 1.0%, to 1627; and the Nasdaq down 1.3%, to 3424.
There was enough weakness in stocks and the economic data to send investors back into bonds, pushing up prices after six weeks of declines. The FNMA 3.5% bond we watch ended the week up .10, at $103.16. National average mortgage rates edged up again, but are still at historically attractive levels. As evidence of that, demand for purchase loans was up 5% for the week, and up 6% from a year ago, according to the Mortgage Bankers Association.
DID YOU KNOW?... Analysts feel mortgage rates could rise if the Fed stops its bond buying program. But last week, FOMC member James Bullard said, "...surprisingly low inflation readings may mean the Committee can maintain its aggressive program over a longer time frame."
This Week’s Forecast
NO INFLATION, NO RATE CHANGE, MORE HOME BUILDING, MORE HOME SALES... The closely watched Consumer Price Index (CPI) is expected to show no huge move up for May. The FOMC Rate Decision on Wednesday should leave the Fed Funds Rate untouched. The policy statement will of course be examined for any indications of future Fed moves, as well as for the central bank's overall take on the state of the economy.
On the housing front, analysts predict May Housing Starts will move ever closer to an annual rate of one million units. While more new homes are going up, more Existing Home Sales are being closed. That number is forecast to hit the 5 million unit annual rate for May.
The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Wednesday, June 12, 2013
5 unsightly red flags that drive home buyers away - PLUS 12 cool tools for Dad this Fathers' Day
In many places, home prices are heading up and more buyers are hitting the market. If you're selling, you obviously want to get the best price, but don't want to spend a lot on renovations. Fair enough! However, studies show there are five issues you really should address, because they turn off home buyers right away. Fix these and you have your best shot at selling your home in less time for more money. Best of all, you can tackle these issues yourself for not very much money.
1. Paint problems. Peeling paint on siding and trim makes a house look uncared for and results in lower offers from buyers. Inside, walls painted colors that are dark, like navy, or unusual, like hot pink, are a complete buyer turnoff. But painting is an easy and inexpensive do-it-yourself fix.
2. Unkempt landscaping. Your home's curb appeal can make or break a sale. Get out the clippers, pruning shears, and rake, and weed and mulch the beds. It doesn't take that long to spruce up your landscaping, but it can pay big dividends.
3. Wallpaper and paneling. Outdated wallpaper can really throw buyers. It takes time to strip and repaint, but it's worth it. Have a wallpaper stripping party, or hire a company to do the stripping and repaint the walls yourself. Paneling is tougher because removing it can uncover problems. Painting it may or may not work. Talk to your realtor to decide the best route.
4. Mirrored walls. Big walls of mirrors or mirror tiles just don't fly with most buyers who think removing them is a major project. Take them down yourself; repairs shouldn't be that difficult, and then just repaint. To avoid paint matching problems, either use an accent color or repaint the whole room.
5. Closet doors. Buyers lose their enthusiasm for a place when closet doors are missing, out of adjustment, or if they've been replaced with drapes or beads. Make sure all closets have doors installed, adjusted, and properly working.
As a buyer, when you see these problems in a home you otherwise like, realize that you could be looking at a bargain. Walk away if exterior paint issues indicate severe moisture problems. But the rest of these conditions are minor issues that you can fix yourself for not much money.
12 GIFTS FOR HANDY DADS
Most fathers appreciate a new tool to use around the family abode. Here are a dozen ideas for a range of budgets.
1. Stud Finder. Locating studs in a wall helps with everything from hanging pictures to attaching handrails. There are many models to choose from.
2. Knife Sharpener. Quickly, easily, and accurately keep blades working at their best.
3. Floating Waterproof LED Flashlight. LEDs are super bright and the waterproof floating design is great if the light is dropped in a clogged bathtub or puddle on the driveway.
4. Multi-Tool. These handy devices can include a wide variety of tools from wire strippers, files, different sized pliers to screwdrivers. Prices increase with the number of options.
5. Drill Bit Set.A new set of drill bits can be appreciated if Dad had his power drill a while and some of the original drill bits have dulled.
6. Packaged Tool Set. Typically the case contains dozens of tools for basic household projects. Keep handy in a closet. Look for sets that include a hammer, tape measure, and level.
7. Hearing Protector with AM/FM Radio and Music Player Compatibility. This is for operating power tools and garden equipment. The design lets Dad listen to his favorite radio station or connect to an MP3 music player through the built-in input jack.
8. Tool Belt. Convenient for carrying tools to the place Dad will use them. Consider adding some items like a big set of pliers or vise grips.
9. Cordless Power Drill. These are great for lots of jobs around the house. Good home units are reasonably priced.
10. String Trimmer. This is perfect for edging lawns and cutting areas too small for the mower. Choose from gas, battery powered, or corded electric models.
11. Leaf Blower. Cleans up leaves and grass clippings, but also terrific for keeping the garage floor clean. There are gas, battery, and corded electric options.
12. Tool Box. Choose between portable models or cabinets with drawers that can swallow a whole workshop.
Whenever you're ready to put your home on the market and purchase another, we're happy to answer any questions you may have about financing. We can also help with refinancing your existing home, or funding home improvements. Please call or email us any time. We're always here to help.... Have a great day!
P.S.: The housing market is recovering and mortgage rates are still at very attractive levels. If you're thinking about buying or refinancing, it's smart to start the process early. Please call or email us to talk about the appealing options available now.
1. Paint problems. Peeling paint on siding and trim makes a house look uncared for and results in lower offers from buyers. Inside, walls painted colors that are dark, like navy, or unusual, like hot pink, are a complete buyer turnoff. But painting is an easy and inexpensive do-it-yourself fix.
2. Unkempt landscaping. Your home's curb appeal can make or break a sale. Get out the clippers, pruning shears, and rake, and weed and mulch the beds. It doesn't take that long to spruce up your landscaping, but it can pay big dividends.
3. Wallpaper and paneling. Outdated wallpaper can really throw buyers. It takes time to strip and repaint, but it's worth it. Have a wallpaper stripping party, or hire a company to do the stripping and repaint the walls yourself. Paneling is tougher because removing it can uncover problems. Painting it may or may not work. Talk to your realtor to decide the best route.
4. Mirrored walls. Big walls of mirrors or mirror tiles just don't fly with most buyers who think removing them is a major project. Take them down yourself; repairs shouldn't be that difficult, and then just repaint. To avoid paint matching problems, either use an accent color or repaint the whole room.
5. Closet doors. Buyers lose their enthusiasm for a place when closet doors are missing, out of adjustment, or if they've been replaced with drapes or beads. Make sure all closets have doors installed, adjusted, and properly working.
As a buyer, when you see these problems in a home you otherwise like, realize that you could be looking at a bargain. Walk away if exterior paint issues indicate severe moisture problems. But the rest of these conditions are minor issues that you can fix yourself for not much money.
12 GIFTS FOR HANDY DADS
Most fathers appreciate a new tool to use around the family abode. Here are a dozen ideas for a range of budgets.
1. Stud Finder. Locating studs in a wall helps with everything from hanging pictures to attaching handrails. There are many models to choose from.
2. Knife Sharpener. Quickly, easily, and accurately keep blades working at their best.
3. Floating Waterproof LED Flashlight. LEDs are super bright and the waterproof floating design is great if the light is dropped in a clogged bathtub or puddle on the driveway.
4. Multi-Tool. These handy devices can include a wide variety of tools from wire strippers, files, different sized pliers to screwdrivers. Prices increase with the number of options.
5. Drill Bit Set.A new set of drill bits can be appreciated if Dad had his power drill a while and some of the original drill bits have dulled.
6. Packaged Tool Set. Typically the case contains dozens of tools for basic household projects. Keep handy in a closet. Look for sets that include a hammer, tape measure, and level.
7. Hearing Protector with AM/FM Radio and Music Player Compatibility. This is for operating power tools and garden equipment. The design lets Dad listen to his favorite radio station or connect to an MP3 music player through the built-in input jack.
8. Tool Belt. Convenient for carrying tools to the place Dad will use them. Consider adding some items like a big set of pliers or vise grips.
9. Cordless Power Drill. These are great for lots of jobs around the house. Good home units are reasonably priced.
10. String Trimmer. This is perfect for edging lawns and cutting areas too small for the mower. Choose from gas, battery powered, or corded electric models.
11. Leaf Blower. Cleans up leaves and grass clippings, but also terrific for keeping the garage floor clean. There are gas, battery, and corded electric options.
12. Tool Box. Choose between portable models or cabinets with drawers that can swallow a whole workshop.
Whenever you're ready to put your home on the market and purchase another, we're happy to answer any questions you may have about financing. We can also help with refinancing your existing home, or funding home improvements. Please call or email us any time. We're always here to help.... Have a great day!
P.S.: The housing market is recovering and mortgage rates are still at very attractive levels. If you're thinking about buying or refinancing, it's smart to start the process early. Please call or email us to talk about the appealing options available now.
Monday, June 10, 2013
Inside Lending Newsletter - Market update
QUOTE OF THE WEEK... "It's not whether you get knocked down, it's whether you get up." --Vince Lombardi, legendary professional football coach
INFO THAT HITS US WHERE WE LIVE... U.S. home prices were certainly knocked down for a few years there, but they've definitely gotten up now. A prominent data analytics firm reported that home prices, including distressed sales, rose 3.2% in April, up for the 14th month in a row. Compared to a year ago, prices were up 12.1%, posting their highest annual increase in more than seven years. These statisticians predicted that the annual home price gain will increase to 12.5% in May.
The chief economist at the analytics firm explained, "Increasing demand for new and existing homes, coupled with low inventory, has created a virtuous cycle for price gains." The higher demand for those new homes is reflected in new residential construction spending data from the U.S. Census Bureau of the Department of Commerce. Although flat for the month, spending for residential construction on an annual basis was up 18.3% in April.
BUSINESS TIP OF THE WEEK... Make shorter to-do lists. The goal isn't to do as many things as you can in a day, but to focus on accomplishing the things that really matter.
Review of Last Week
JOBS DID THE JOB... The May jobs report pushed major stock indexes to their first weekly gain in three, accomplished in a good news/bad news fashion. Good news: 175,000 jobs were added, beating expectations. Bad news: March and April numbers were revised down by 12,000, so the average monthly gain is just 155,000 jobs the last three months, well below the 237,000 monthly average we saw from November through February. Good news: investors felt the modest job gains mean the Fed will continue the bond buying program that's driving down interest rates and boosting stocks.
The last bit of bad news/good news: the unemployment rate rose to 7.6%, but this was seen as good news, because it means more people are looking for work. Got that? Earlier in the week, the data was plain old-fashioned bad news. The ISM index dropped below 50 in May, indicating manufacturing was contracting. Unit Labor Costs and Factory Orders both missed estimates. But on a slightly up note, the Fed's Beige Book averred, "Overall economic activity increased at a modest to moderate pace since the previous report." We'll take that.
The week ended with the Dow up 0.9%, to 15248; the S&P 500 up 0.8%, to 1643; and the Nasdaq up 0.4%, to 3469.
Friday's jobs report sent investors scurrying over to stocks, which hurt bond prices. But bonds had been boosted by weak economic data earlier in the week, so the price dips weren't all that bad in the end. The FNMA 3.5% bond we watch ended the week down .15, at $103.06. National average mortgage rates edged up again in Freddie Mac's weekly Primary Mortgage Market Survey, but remain attractive. The Mortgage Bankers Association reported applications for purchase loans down 2% for the week, but up 14% on an annual basis.
DID YOU KNOW?... This week's Federal Budget reports the amount that the government's expenditures exceeded its tax revenues during May. The difference is made up by borrowing from the public through issuing debt in the form of Treasury bonds.
This Week’s Forecast
MORE ACTION IN STORES AND FACTORIES, INFLATION OK... We'll all be watching Retail Sales, always a good measure of the consumer's economic outlook. Analysts expect these numbers to rise for May, a good sign. Factories are also expected to come in a little busier for May, with Industrial Production up for the month.
From the Fed on down to the ordinary citizen, everyone's keeping an eye on inflation. The May Producer Price Index (PPI) and Core PPI reading are forecast to show that the prices businesses pay for things are staying well within Fed guidelines.
The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
INFO THAT HITS US WHERE WE LIVE... U.S. home prices were certainly knocked down for a few years there, but they've definitely gotten up now. A prominent data analytics firm reported that home prices, including distressed sales, rose 3.2% in April, up for the 14th month in a row. Compared to a year ago, prices were up 12.1%, posting their highest annual increase in more than seven years. These statisticians predicted that the annual home price gain will increase to 12.5% in May.
The chief economist at the analytics firm explained, "Increasing demand for new and existing homes, coupled with low inventory, has created a virtuous cycle for price gains." The higher demand for those new homes is reflected in new residential construction spending data from the U.S. Census Bureau of the Department of Commerce. Although flat for the month, spending for residential construction on an annual basis was up 18.3% in April.
BUSINESS TIP OF THE WEEK... Make shorter to-do lists. The goal isn't to do as many things as you can in a day, but to focus on accomplishing the things that really matter.
Review of Last Week
JOBS DID THE JOB... The May jobs report pushed major stock indexes to their first weekly gain in three, accomplished in a good news/bad news fashion. Good news: 175,000 jobs were added, beating expectations. Bad news: March and April numbers were revised down by 12,000, so the average monthly gain is just 155,000 jobs the last three months, well below the 237,000 monthly average we saw from November through February. Good news: investors felt the modest job gains mean the Fed will continue the bond buying program that's driving down interest rates and boosting stocks.
The last bit of bad news/good news: the unemployment rate rose to 7.6%, but this was seen as good news, because it means more people are looking for work. Got that? Earlier in the week, the data was plain old-fashioned bad news. The ISM index dropped below 50 in May, indicating manufacturing was contracting. Unit Labor Costs and Factory Orders both missed estimates. But on a slightly up note, the Fed's Beige Book averred, "Overall economic activity increased at a modest to moderate pace since the previous report." We'll take that.
The week ended with the Dow up 0.9%, to 15248; the S&P 500 up 0.8%, to 1643; and the Nasdaq up 0.4%, to 3469.
Friday's jobs report sent investors scurrying over to stocks, which hurt bond prices. But bonds had been boosted by weak economic data earlier in the week, so the price dips weren't all that bad in the end. The FNMA 3.5% bond we watch ended the week down .15, at $103.06. National average mortgage rates edged up again in Freddie Mac's weekly Primary Mortgage Market Survey, but remain attractive. The Mortgage Bankers Association reported applications for purchase loans down 2% for the week, but up 14% on an annual basis.
DID YOU KNOW?... This week's Federal Budget reports the amount that the government's expenditures exceeded its tax revenues during May. The difference is made up by borrowing from the public through issuing debt in the form of Treasury bonds.
This Week’s Forecast
MORE ACTION IN STORES AND FACTORIES, INFLATION OK... We'll all be watching Retail Sales, always a good measure of the consumer's economic outlook. Analysts expect these numbers to rise for May, a good sign. Factories are also expected to come in a little busier for May, with Industrial Production up for the month.
From the Fed on down to the ordinary citizen, everyone's keeping an eye on inflation. The May Producer Price Index (PPI) and Core PPI reading are forecast to show that the prices businesses pay for things are staying well within Fed guidelines.
The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Monday, June 3, 2013
Inside Lending Newsletter - Market update
QUOTE OF THE WEEK... "There is always room at the top." --Daniel Webster, American statesman and senator
INFO THAT HITS US WHERE WE LIVE... Last week, Pending Home Sales took their place at the top, hitting their highest level since April 2010, when folks were rushing to close before the homebuyer tax credit expired. April Pending Home Sales, based on signed contracts for existing homes, were up 0.3% over March and up 10.3% over last year, according to the National Association of Realtors (NAR). Their chief economist predicts, "Total existing home sales are expected to rise just over 7%, to about 5 million this year."
The NAR's economic honcho also feels that in 2013, "Because of inventory shortages, higher home sales will push up home values to the highest level in five years." Those values appear to be well on their way up. Evidence? The latest S&P/Case-Shiller 20-City Composite index was up 10.9% in March compared to a year ago, the highest annual home price gain since 2006. In addition, all 20 cities tracked registered annual increases and all showed monthly gains for the fifth month in a row!
BUSINESS TIP OF THE WEEK... Ask your clients how you could improve. Requesting their input helps you upgrade products and services and makes clients feel more invested in your brand. It's a win-win.
Review of Last Week
UP MONTH ENDS DOWN... Stocks were down again for the week, yet all three major indexes ended up for the month: the Dow up 1.9%, the S&P 500 up 2.1%, and the Nasdaq up 3.8%. The Dow saw its sixth straight monthly gain and the S&P 500 its seventh, the longest monthly win streak since the one that ended in September 2009. All three indexes are also up solidly for the year. Dragging things down last week were a lower GDP-2nd Estimate (2.4%), flat Personal Income, and a drop in Personal Spending, all missing expectations.
But the good economic data was quite good. Pending Home Sales and the Case-Shiller Home Price Index showed housing recovering. Consumer Confidence and Michigan Consumer Sentiment both beat estimates, reflecting a more optimistic mindset among Americans. The Chicago PMI index indicated strong expansion for Midwest manufacturing. Core PCE Prices confirmed inflation is under control. So why did stocks dip for the week? Analysts say some investors are now afraid the economy is strengthening too quickly. Go figure.
The week ended with the Dow down 1.2%, to 15116; the S&P 500 down 1.1%, to 1631; and the Nasdaq down 0.1%, to 3456.
While stocks slipped, bonds plunged, as positive economic data made investors worry the Fed might soon slow its bond-buying program that's kept prices up and interest rates down. The FNMA 3.5% bond we watch ended the week down .97, at $103.21. In Freddie Mac's Primary Mortgage Market Survey, national average mortgage rates were up from both the week before and a year ago. But they're still at attractive levels, so the Mortgage Bankers Association saw applications for purchase loans up a seasonally adjusted 3%.
DID YOU KNOW?... A service is an economic activity that is intangible, not stored, doesn't result in ownership, and is consumed at the point of sale. This week's ISM Services index measures the health of this business sector. >> This Week’s Forecast FACTORIES OK, FED OBSERVATIONS, A FEW MORE JOBS... This week's ISM Index should show factory activity barely expanding in May, while ISM Services is forecast to report stronger growth for that sector. The Fed's Beige Book reveals anecdotal economic info from Fed Districts across the country. Experts expect a tone of cautious optimism. Nothing new there.
Friday it's the always important Employment Report. Economists think that new Nonfarm Payrolls in May will stay in the modest range we've been seeing. This job growth isn't outpacing workforce growth, so the Unemployment Rate should remain at 7.5%
The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
INFO THAT HITS US WHERE WE LIVE... Last week, Pending Home Sales took their place at the top, hitting their highest level since April 2010, when folks were rushing to close before the homebuyer tax credit expired. April Pending Home Sales, based on signed contracts for existing homes, were up 0.3% over March and up 10.3% over last year, according to the National Association of Realtors (NAR). Their chief economist predicts, "Total existing home sales are expected to rise just over 7%, to about 5 million this year."
The NAR's economic honcho also feels that in 2013, "Because of inventory shortages, higher home sales will push up home values to the highest level in five years." Those values appear to be well on their way up. Evidence? The latest S&P/Case-Shiller 20-City Composite index was up 10.9% in March compared to a year ago, the highest annual home price gain since 2006. In addition, all 20 cities tracked registered annual increases and all showed monthly gains for the fifth month in a row!
BUSINESS TIP OF THE WEEK... Ask your clients how you could improve. Requesting their input helps you upgrade products and services and makes clients feel more invested in your brand. It's a win-win.
Review of Last Week
UP MONTH ENDS DOWN... Stocks were down again for the week, yet all three major indexes ended up for the month: the Dow up 1.9%, the S&P 500 up 2.1%, and the Nasdaq up 3.8%. The Dow saw its sixth straight monthly gain and the S&P 500 its seventh, the longest monthly win streak since the one that ended in September 2009. All three indexes are also up solidly for the year. Dragging things down last week were a lower GDP-2nd Estimate (2.4%), flat Personal Income, and a drop in Personal Spending, all missing expectations.
But the good economic data was quite good. Pending Home Sales and the Case-Shiller Home Price Index showed housing recovering. Consumer Confidence and Michigan Consumer Sentiment both beat estimates, reflecting a more optimistic mindset among Americans. The Chicago PMI index indicated strong expansion for Midwest manufacturing. Core PCE Prices confirmed inflation is under control. So why did stocks dip for the week? Analysts say some investors are now afraid the economy is strengthening too quickly. Go figure.
The week ended with the Dow down 1.2%, to 15116; the S&P 500 down 1.1%, to 1631; and the Nasdaq down 0.1%, to 3456.
While stocks slipped, bonds plunged, as positive economic data made investors worry the Fed might soon slow its bond-buying program that's kept prices up and interest rates down. The FNMA 3.5% bond we watch ended the week down .97, at $103.21. In Freddie Mac's Primary Mortgage Market Survey, national average mortgage rates were up from both the week before and a year ago. But they're still at attractive levels, so the Mortgage Bankers Association saw applications for purchase loans up a seasonally adjusted 3%.
DID YOU KNOW?... A service is an economic activity that is intangible, not stored, doesn't result in ownership, and is consumed at the point of sale. This week's ISM Services index measures the health of this business sector. >> This Week’s Forecast FACTORIES OK, FED OBSERVATIONS, A FEW MORE JOBS... This week's ISM Index should show factory activity barely expanding in May, while ISM Services is forecast to report stronger growth for that sector. The Fed's Beige Book reveals anecdotal economic info from Fed Districts across the country. Experts expect a tone of cautious optimism. Nothing new there.
Friday it's the always important Employment Report. Economists think that new Nonfarm Payrolls in May will stay in the modest range we've been seeing. This job growth isn't outpacing workforce growth, so the Unemployment Rate should remain at 7.5%
The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
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