For the week of January 17, 2011

By
Mortgage and Lending with Caliber Home Loans 176918

 

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April Diehl

 

April Diehl
Loan Officer
415 Hwy 95A, Suite K-1102
Fernley, NV 89408
Phone: (775) 575-1744
Mobile: (775) 830-4398
Toll Free: (866) 412-1740
Fax: (866) 254-0558

PrimeLending, A PlainsCapital Company

For the week of January 17, 2011 - Vol. 9, Issue 3

>> Market Update 

INFO THAT HITS US WHERE WE LIVE  Down in Orlando, Florida, last week there were more housing market forecasts for the year just begun. Bottom line? Housing economists are cautiously optimistic about a recovery during 2011. These economists were presenting their views at the annual meeting of the National Association of Home Builders (NAHB). None of the experts see a robust upturn for housing. But they do feel that home sales, which have been in a bit of a stall, may start to recover soon.

The prevailing opinion is that the residential market should pick up in the spring, thanks to low mortgage rates and home prices at bargain levels. The NAHB's chief economist feels that recent economic indicators are "signifying growing consumer confidence." These indicators include job creations, good retail sales, and increasing purchases of big ticket items like cars and furniture. Freddie Mac's chief economist sees home prices bottoming in the first six months. He expects mortgage rates to edge up slightly but still remain at historically low levels. Overall, home sales are forecast to be up from 4% to 10% year-over-year and for new construction to be up by 20%.

>> Review of Last Week

THINGS KEEP LOOKING UP... Investors seem to be more positive about the U.S. economy and the European financial situation. They articulate those views by trading stock prices up and last week, they sent the Dow, the broadly based S&P 500, and the tech-heavy Nasdaq UP by solid percentages. Across the pond, Portugal, Italy, and Spain got some much needed support. Over here, Q4 corporate earnings season got off to a good start, supported by some encouraging economic data.

A slight glitch in the proceedings came from an increase in weekly unemployment claims to 445,000. But the four-week moving average is at 417,000 and continuing unemployment claims dropped by 248,000 to 3.88 million, the lowest it's been since October 2008. Strongly positive economic signs came from a shrinking trade deficit, with exports running ahead of imports over the past year. Inflation appears to be in check, as measured by Core CPI, the Fed's key reading on the matter. This means the Fed Funds rate can stay at its current low levels.

Retail sales were up slightly less than expected for December, but they did reach an all-time high, surpassing the November 2007 figure. For the last year, retail sales are up almost 8% and they've been growing at a 13% annual rate the past three months. In corporate Q4 earnings news, major players Alcoa, JPMorgan Chase, and Intel beat estimates and issued better than expected guidance going forward.

For the week, the Dow ended up 1.0%, at 11,787; the S&P 500 went up 1.7%, to 1,293; and the Nasdaq shot up 1.9%, ending at 2,755.


Bond prices went on an up and down trip last week, with varied results at the finish. The FNMA 4.0% bond we watch ended virtually flat, down 4 basis points for the week, closing at $99.14. According to Freddie Mac's weekly survey of conforming mortgages, average fixed-rate mortgage rates dropped for the second week in a row. The national average rate for 30-year fixed rate mortgages hit a four-week low after their slight uptick at the end of last year.

>> This Week's Forecast

HOUSING, MANUFACTURING, THE ECONOMY OVERALL... Financial markets are closed Monday in observance of Martin Luther King Day. The rest of the week features some measures of the housing market. Wednesday's December Housing Starts and Building Permits will show us the mindset of home builders. Starts are forecast to be down a little, but the weather wasn't conducive to breaking ground in many regions of the country. Permits indicate starts a month or two out and they should be up a little, the same as December Existing Home Sales, coming on Thursday. 

Manufacturing is expected to expand in the New York region, as measured by Tuesday's Empire State Index, but Thursday's Philadelphia Fed Index may show a slight manufacturing contraction. Also that day, the Leading Economic Indicators (LEI) Index for December is forecast to continue to improve, although at a slightly slower rate than the previous month.

>> 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 January 17 - January 21

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

Tu
Jan 18

08:30

Empire State Manufacturing Index

Jan

12.00

10.57

Moderate

W
Jan 19

08:30

Housing Starts

Dec

550K

555K

Moderate

W
Jan 19

08:30

Building Permits

Dec

560K

530K

Moderate

Th
Jan 20

08:30

Initial Unemployment Claims

1/15

425K

445K

Moderate

Th
Jan 20

08:30

Continuing Unemployment Claims

1/8

3.900M

3.879M

Moderate

Th
Jan 20

08:30

Existing Home Sales

Dec

4.80M

4.68M

Moderate

Th
Jan 20

08:30

Leading Economic Indicators (LEI) Index

Dec

0.6%

1.1%

Moderate

Th
Jan 20

10:00

Philadelphia Fed Manufacturing Index

Jan

20.5

20.8

HIGH

Th
Jan 20

11:00

Crude Inventories

1/15

NA

-2.15M

Moderate

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months  With inflation still under control, economists expect the Fed to keep the Funds Rate at its super low level well into the year. The experts feel the economy is not yet strong enough to handle a rate hike just yet. 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

Jan 26

0%-0.25%

Mar 15

0%-0.25%

Apr 27

0%-0.25%


Probability of change from current policy:

After FOMC meeting on:

Consensus

Jan 26

     <1%

Mar 15

     <1%

Apr 27

     <1%

 

This e-mail is an advertisement for April Diehl. 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. © 2010 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# 176918


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