The Weekly Rap! Friday Jan 24th, 2014

The National Debt is currently: $17,342,844,586,845.00  higher by about 12 BILLION.  I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,009 about 500 pts lower than where it was on Tuesday.  The S&P 500 is trading at 1,805.  Gold is trading at $1,263 an ounce, while oil futures at $96.85 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.28/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, last traded at 2.74%.  30-year Treasury Bond yields last traded at 3.66%.  Rates on 30-year fixed-rate mortgages are about 4.625% this week. MBS yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. Rising yields mean higher consumer-mortgage rates.

The FNMA 30-year fixed 3.5% coupon, containing 3.75% – 4.125% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 101.00 about 0.50 Pt better in price than where we were last Friday at this time and a full point better than two weeks ago.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.  This is what I’ve been saying for some time that a correction in the stock market usually means a “flight-to-quality” where money flows from stocks to bonds.  This is what’s pushing the rally today in the bond market.  There was no economic news released today.

I’ve just finished revising my investment portfolio which consists of a five asset class investment allocation. If you’re interested please check the Finance tab above.

In economic news this week; the reader’s digest version is it was a very light week for economic data and some of us experienced a holiday week with Monday being Martin Luther King day of which many did the celebratory march in honor of the man who did so much for civil rights in this country.  The economy continues to crawl along but at least in a positive direction.

The LEI or leading economic index rose 0.1% in December to 99.4, marking the sixth gain in a row, the Conference Board reported. “This latest report suggests steady growth this spring, but some uncertainties remain,” said Ken Goldstein, economist at the board.  That’s like saying “the market’s going to go up, or it’s going to go down.”  I printed this quote by a “prominent” economist at the Conference Board to illustrate why I call them “economites.”   I would love to have a job where you get paid to “guess” and you don’t get fired if you’re wrong.  Kind of like being a Weather Man.

On the Real Estate front:  After falling for three months, the National Association of Realtors reported sales of existing homes rose a meager 1% in December to an annual rate of 4.87 million, pushing 2013’s total sales to the highest level in seven years. For all of 2013, existing-home sales hit 5.09 million, up 9.1% from the prior year. The median sales price of used homes hit $198,000 in December, up 9.9% from the year-earlier period, supported by low inventory. For 2013 the median sales price reached $197,100, up 11.5% from the prior year, the strongest growth since 2005.  December’s inventory was 1.86 million existing homes for sale, a 4.6-month supply at the current sales pace.

According to conventional loans funded; home prices ticked up 0.1% in November, and were up 7.6% from the year-earlier period, the Federal Housing Finance Agency reported Thursday.  In October, prices rose 0.5%. FHFA’s data are based on sales information from mortgages sold to or guaranteed by federally controlled mortgage buyers Fannie Mae FNMA and Freddie Mac

On the Employment front:  The number of Americans who applied last week for unemployment benefits rose slightly but remains near a post-recession low, suggesting little change in private-sector hiring and firing patterns.  Last week, initial jobless claims edged up by 1,000 to 326,000. The new claims figure appears to offer additional indication that the labor market has not softened as much as the government’s employment report in December suggested.  The economy added just 74,000 net jobs in the final month of 2013.  The U.S. added an average of 180,00 jobs a month over the past two years and the pace of hiring, as predicted,  should pick up a bit in 2014.

Meanwhile, the government said continuing jobless claims increased by 34,000 to 3.06 million last. Continuing claims, reported with a one-week delay, reflect the number of people already receiving benefits.

You can visit my corporate website at: http://bill.bartok.stanfordloans.com
Sincerely,

Bill Bartok

Mortgage Advisor MLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

Thank you!

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