Jeff's Blog

Economic Update for the Week of April 14, 2008

Jeff Mccool (Bank of the West) — Mon, 14 Apr 2008 10:12:56 -0500

The Economic Report

Flagstar Bank

April 14, 2008

Highlights from the past week:

The week started with a Federal Reserve report detailing a lower than expected increase in February consumer borrowing. Overall consumer credit increased 2.44 percent. At mid-week, the latest FOMC meeting minutes were released. The minutes revealed what most of the economic world expected - further credit restrictions and continued housing weakness straining the economy. Next the Commerce Department reported that U.S. wholesale inventories increased more than expected in February by 1.1 percent. This was accompanied by a 0.8 percent decrease in wholesale sales. The Labor Department released data about jobless claims falling more than anticipated to 357,000. On Friday, the University of Michigan consumer survey said that U.S. consumer confidence dropped to the lowest level since 1982. The preliminary index for April was at 63.2.

MBA Mortgage Applications Survey Highlights - For the week ending April 4, 2008.

The Market Composite Index, a measure of mortgage loan application volume, was 725.6, an increase of 5.4 percent on a seasonally adjusted basis from 688.3 one week earlier. On an unadjusted basis, the Index increased 5.7 percent compared with the previous week and was up 10.9 percent compared with the same week one year earlier.

The Refinance Index increased 3.4 percent to 2724.7 from 2636.0 the previous week and the seasonally adjusted Purchase Index increased 8.1 percent to 384.7 from 356.0 one week earlier. The Conventional Purchase Index increased 6.1 percent while the Government Purchase Index (largely FHA) increased 15.2 percent. On an unadjusted basis, the Conventional Purchase Index increased 6.3 percent to 561.1 from 527.7 the previous week. The seasonally adjusted Conventional Index increased 3.8 percent to 935.8 from 901.8 the previous week, and the seasonally adjusted Government Index increased 12.9 percent to 375.2 from 332.4 the previous week.

The four week moving average for the seasonally adjusted Market Index is up 1.8 percent to 758.0 from 744.5. The four week moving average is up 1.1 percent to 377.4 from 373.4 for the Purchase Index, while this average is up 2.4 percent to 2987.8 from 2918.6 for the Refinance Index.

The refinance share of mortgage activity decreased to 52.2 percent of total applications from 53.4 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.5 from 5.4 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.78 percent from 5.75 percent, with points decreasing to 1.11 from 1.19 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 5.39 percent from 5.27 percent, with points decreasing to 1.11 from 1.13 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs increased to 7.06 percent from 7.00 percent, with points increasing to 1.46 from 1.39 (including the origination fee) for 80 percent LTV loans.

Economic Releases to Watch in the Week Ahead

Monday -

Retail Sales - March sales figures are expected to show a 0.1 percent increase, excluding autos a 0.2 percent increase is expected.

Business Inventories - Inventories are expected to increase 0.4 percent for February.

Tuesday -

Empire Manufacturing - This scale of the New York state manufacturing activity is expected to show an index of -16.0 for April.

Producer Price Index (PPI) - Producer prices are predicted to increase 0.4 percent for March, excluding Food and Energy (Core PPI) a 0.2 percent increase is expected.

Wednesday -

Consumer Price Index (CPI) - Consumer prices are predicted to increase 0.3 percent for March, excluding Food and Energy (Core CPI) a 0.2 percent increase is expected.

Housing Starts and Building Permits - Housing starts are expected to decrease to 1,025,000 for March and building permits are likely to decrease to 970,000.

Industrial Production - Experts predict a 0.1 percent decrease for March production figures.

Thursday -

Initial Jobless Claims - Claims from the previous week are expected to be announced at 365,000.

Leading Indicators - Economists expect the March LEI index to increase 0.1 percent.

Philadelphia Fed - Analysts expect an index of -18.0 for March to be announced from the Philadelphia Fed -- up from -24 in February.

Friday -

No significant economic indicators released today.

Communications from Flagstar Capital Markets are intended solely for informational purposes. Statements made by various authors and other contributors do not necessarily reflect the opinions of Flagstar Capital Markets, and should not be construed as an endorsement by Flagstar Capital Markets, either expressed or implied. Flagstar Capital Markets is not responsible for typographic errors or other inaccuracies in the content. We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided "as is" without any warranty of any kind. The information provided in this circular is for the dissemination to and for the use of real estate business entities and mortgage lenders only. It is not an advertisement for the extension of credit nor is it intended for distribution to consumers.

Economic report for the week of April 14, 2008

Jeff Mccool (Bank of the West) — Fri, 11 Apr 2008 19:45:33 -0500

The Economic Report

Flagstar Bank

April 14, 2008

Highlights from the past week:

MBA Mortgage Applications Survey Highlights - For the week ending April 4, 2008.

Economic Releases to Watch in the Week Ahead

Monday -

Retail Sales - March sales figures are expected to show a 0.1 percent increase, excluding autos a 0.2 percent increase is expected.

Business Inventories - Inventories are expected to increase 0.4 percent for February.

Tuesday -

Empire Manufacturing - This scale of the New York state manufacturing activity is expected to show an index of -16.0 for April.

Producer Price Index (PPI) - Producer prices are predicted to increase 0.4 percent for March, excluding Food and Energy (Core PPI) a 0.2 percent increase is expected.

Wednesday -

Consumer Price Index (CPI) - Consumer prices are predicted to increase 0.3 percent for March, excluding Food and Energy (Core CPI) a 0.2 percent increase is expected.

Housing Starts and Building Permits - Housing starts are expected to decrease to 1,025,000 for March and building permits are likely to decrease to 970,000.

Industrial Production - Experts predict a 0.1 percent decrease for March production figures.

Thursday -

Initial Jobless Claims - Claims from the previous week are expected to be announced at 365,000.

Leading Indicators - Economists expect the March LEI index to increase 0.1 percent.

Philadelphia Fed - Analysts expect an index of -18.0 for March to be announced from the Philadelphia Fed -- up from -24 in February.

Friday -

No significant economic indicators released today.

Economic Report - March 10, 2008

Jeff Mccool (Bank of the West) — Wed, 12 Mar 2008 23:16:43 -0500

The Economic Report

Flagstar Bank

March 10, 2008

Highlights from the past week:

Last week was another volatile one. The week started with the February ISM Manufacturing Index coming in at a five year low with a reading of 48.3. The Commerce Department's report on factory orders was as expected, a 2.5 percent decrease in February. All the data so far points to a further weakening economy which bodes well for Treasuries, but the deep concern about the housing and mortgage industries caused a large sell-off in mortgage backed securities. The week ended with a much weaker than expected unemployment report. In February employers cut 63,000 jobs which was the largest monthly decline in five years. The Labor Department reported that the national unemployment rate declined slightly to 4.8 percent, but that was only because the number of people in the workforce dropped by 450,000.

MBA Mortgage Applications Survey Highlights - For the week ending February 29, 2008.

The Market Composite Index, a measure of mortgage loan application volume, was 684.9, an increase of 3.0 percent on a seasonally adjusted basis from 665.1 one week earlier. On an unadjusted basis, the Index increased 15.3 percent compared with the previous President's Day holiday shortened week and was up 1.1 percent compared with the same week one year earlier.

The Refinance Index increased 4.5 percent to 2569.0 from 2458.9 the previous week and the seasonally adjusted Purchase Index increased 1.4 percent to 363.1 from 358.2 one week earlier. The Conventional Purchase Index increased 0.9 percent while the Government Purchase Index (largely FHA) increased 3.5 percent. On an unadjusted basis, the Purchase Index increased 14.5 percent to 401.6 from 350.7 the previous week. The seasonally adjusted Conventional Index increased 2.4 percent to 929.0 from 907.1 the previous week, and the seasonally adjusted Government Index increased 6.2 percent to 277.8 from 261.5 the previous week.

The four week moving average for the seasonally adjusted Market Index is down 11.0 percent to 809.1 from 909.5. The four week moving average is down 2.8 percent to 370.7 from 381.3 for the Purchase Index, while this average is down 15.6 percent to 3365.8 from 3987.0 for the Refinance Index.

The refinance share of mortgage activity increased to 52.4 percent of total applications from 52.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 17.3 from 15.0 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.98 percent from 6.27 percent, with points unchanged at 1.15 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.26 percent from 5.77 percent, with points increasing to 1.08 from 1.01 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs decreased to 5.83 percent from 5.84 percent, with points decreasing to 0.85 from 0.86 (including the origination fee) for 80 percent LTV loans.

Economic Releases to Watch in the Week Ahead

Monday -

Wholesale Inventories - The figure for wholesale inventories is expected to increase 0.5 percent for January.

Tuesday -

Trade Balance - A trade deficit of $59.5 billion is expected for January.

Wednesday -

No significant economic indicators released today.

Thursday -

Initial Jobless Claims - Claims from the previous week are expected to be announced at 355,000.

Retail Sales - February sales figures are expected to show a 0.1 percent increase, excluding autos a 0.2 percent increase is expected.

Business Inventories - Inventories are expected to increase 0.3 percent for January.

Friday -

Consumer Price Index (CPI) - Consumer prices are predicted to increase 0.3 percent for February, excluding Food and Energy (Core PPI) a 0.2 percent increase is expected.

University of Michigan Consumer Confidence (Preliminary) - Specialists expect a reading for the March consumer confidence index at 70.5.