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Brent Kluge
Mortgage Banker

 

　

　

　

　

For the week of July 4, 2011 - Vol. 9, Issue 27

　

>> Market Update　

QUOTE OF THE WEEK...



INFO THAT HITS US WHERE WE LIVE...Last week's housing market facts were so good,　it was hard for commentators to distort them into the negative picture many like to paint. Wednesday's Pending Home Sales for May came in 8.2% ahead of April, the biggest monthly gain since November and 13.4% higher than May a year ago! This annual hike was the first in over a year, while the monthly gain points to sales increases come June and July. All regions were up, the Midwest leading with a　17.2% annual bump!

April's Case-Shiller home price index posted its first gain in eight months, UP 0.8% in the top 10 metros and UP 0.7% in the top 20. Data aggregator CoreLogic's Home Price Index was UP in May for the second month in a row.

It was also nice to see consumers aren't discouraged. In a New York Times/CBS News poll, almost 9 in 10 Americans say homeownership is an important part of the American Dream. And consumers continue to believe that the market will eventually improve and housing will regain its traditional importance.

Lastly, the Wall Street Journal reported, "there are growing indications that it is a good time to buy," concluding that "the long-term case for home ownership is looking stronger."

BUSINESS TIP OF THE WEEK...Take the initiative. Don't wait for things to happen, get them started right now. Instigate, experiment, test, learn. Don't just react to the world, take action yourself!

>> Review of Last Week

EARLY FIREWORKS...

It was an explosive week for stocks, as investors just couldn't wait for the weekend celebrations. It was one of the biggest weekly market gains in two years. Greece passed unpopular austerity measures and got its bailout. This calmed Wall Streeters worried about US bank exposure to Greek bonds. The week began with inflation still under control. Core PCE Prices were up 0.3% in May and up only 1.2% for the year. And personal income is up 4.2% in the past year.

On the jobs front, key to housing, the Bureau of Labor Statistics reported that in May, the unemployment rate fell year-over-year in 74% of the metro areas measured. Investors were also buoyed by an unexpected uptick in manufacturing. The Chicago PMI bolted up to 61.1 in June, showing strength in Midwestern manufacturing. Manufacturing nationwide also grew strongly, as the ISM Manufacturing index jumped to 55.3 for the month. In both cases a drop had been forecast.


With stocks surging, bonds headed lower as investor fears dissipated and the Fed ended its QE2 bond buying program. So the FNMA 4.0% bond dropped heavily, ending the week down 1.84, at $99.25. But national average rates on fixed-rate mortgages barely moved, still near yearly lows. National average rates on 5-year adjustable-rate mortgages (ARMs) also hit　lows for the year.

DID YOU KNOW?

>> This Week's Forecast

WILL JOBS JUMP IN JUNE?...Happy Independence Day!

There are no economic reports today and markets are closed. Everyone's focus is on Friday's June Employment Report. Economists do not foresee a big jump in jobs just yet, only a nudge up to around 80,000 new payrolls. This won't be enough to drop unemployment below the existing 9.1% rate.

Wednesday features June ISM Services, forecast basically flat, but still above 50, indicating growth in the non-manufacturing sector. Service businesses provide around 85% of U.S. jobs, so expansion is good.

>> 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.

Economic Calendar for the Week of July 4 - July 8

 

W
Jul 6

10:00

ISM Services

Jun

54.0

54.6

Moderate

 

Th
Jul 7

08:30

Initial Unemployment Claims

7/2

425K

428K

Moderate

 

Th
Jul 7

08:30

Continuing　Unemployment Claims

6/25

3.700M

3.702M

Moderate

 

Th
Jul 7

11:00

Crude Inventories

7/2

NA

-4.375M

Moderate

 

F
Jul 8

08:30

Average Workweek

Jun

34.4

34.4

HIGH

 

F
Jul 8

08:30

Hourly Earnings　

Jun

0.2%

0.3%

HIGH

 

F
Jul 8

08:30

Nonfarm Payrolls

Jun

80K

54K

HIGH

 

F
Jul 8

08:30

Unemployment Rate

Jun

9.1%

9.1%

HIGH

 

　

>> Federal Reserve Watch　　　

Forecasting Federal Reserve policy changes in coming months...

With the recovery slowing, economists expect Fed Chairman Bernanke to keep the Funds Rate where it is until things get moving again. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%-0.25%

After FOMC meeting on:

Consensus

 

Aug 9

0%-0.25%

 

Sep 20

0%-0.25%

 

Nov 2

0%-0.25%

 


Probability of change from current policy:

After FOMC meeting on:

Consensus

 

Aug 9

　 　 　<1%

 

Sep 20

　 　 　<1%

 

Nov 2

　 　 　<1%

 

　

　

　

 

　

　

This e-mail is an advertisement for Brent Kluge. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property of PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of PrimeLending, A PlainsCapital Company. © 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking- lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender. NMLS #330566

 

　

　

 

　

Brent Kluge

 

Cell: 410.591.8300

Fax: 888.557.5271

info@203kworld.com

www.203kworld.com

 
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