The Weekly Rap! Friday April 25th, 2014

The National Debt is currently: $17,548,071,962,587.00 is lower by about 34 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,381 right about where it was last Friday. The S&P 500 is trading at 1,866. Gold is trading at $1,300 an ounce, while oil futures at $100.86 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.88/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 104.5 about .60 better than where we were last Friday at this time. 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.

In economic news this week; The reader’s digest version is the economy continues to limp along but at least moving in a positive direction. We continue to see small snippets of growth that are often spun into looking like larger growth numbers, but ultimately we are no further than we were a few years ago.

The Chicago Fed National Activity Index, a monthly index designed to gauge overall economic activity and related inflationary pressure, decreased to 0.20 in March from 0.53 in February. In attempting to try to illustrate the positive; the index’s three-month moving average rose to a neutral reading in March from negative 0.14 in February. The CFNAI is a weighted average of 85 existing monthly indicators of national economic activity. A positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend. As you can see we are pretty much at dead even.

The Conference Board’s leading economic index rose 0.8% in March, after a 0.5% rise in February. “This is an optimistic report, but the focus will continue to be on whether improvements in the labor market can be sustained, fueling stronger economic performance over the next few months,” said Ken Goldstein, economist at The Conference Board. Now I love a good economist report as much as the next person but this is why I call them “Economites.” The index rose a tad over ½ of one percent, and he calls it “an optimistic report.” Really??? It’s all in how you spin it folks.

Orders for durable goods such as computers, aircraft and heavy machinery rose by 2.6% in March and while the rise seems small, it was the biggest gain in four months, offering according to the Economites, another sign that the economy might be on the upswing after a winter-induced lull. The increase in bookings for big-ticket items last month was the largest since November, and orders for computers and electronic products, for example, rose by 5.7% to mark the sharpest spike in almost 3 1/2 years, the Commerce Department reported. Small gains can seem large when the overall growth in relatively small as well.

Consumers are the perkiest they’ve been in nine months, according to the University of Michigan and Thomson Reuters’s gauge of consumer sentiment holding brighter views on current and coming economic conditions, hitting a final April reading of 84.1, the highest reading since July, up from a final March level of 80. We watch sentiment levels to get a feeling for the direction of consumer spending. According to UMich’s report, households with top incomes reported improved buying attitudes this month, while lower-income homes reported a slight decline. Next week the government will release its monthly report on consumer spending, and the expectation is for a pickup for March.

Also according to the report, home purchasing is becoming more responsive to mortgage-credit availability stating: “The main attraction of home-buying conditions has shifted in the past few months toward a greater reliance on low mortgage rates and less emphasis on low prices.” Home prices have raced higher over the past year. And while mortgage rates have increased, too, they remain relatively low. Home builders are starting to respond to consumers who are unable or unwilling to pay for a pricey new place.

Consumer sentiment Apr 25, 2014 Cash-out Refinancings Apr 2014 Existing Home Sales Mar 2014

On the Real Estate front: The National Association of Realtors sales reported the pace of existing homes dropped 0.2% in March to the slowest rate since July 2012, showing weakness in the early spring sales season, though underlying trends signal a firming in market fundamentals. Sales rates have trended down since the summer on falling affordability as inventory remained low, and there’s been concern about tepid spring-sales results. Some buyers have been put off by rapidly rising prices. According to NAR, the median sales price of used homes hit $198,500 in March, up 7.9% from the year-earlier period. First-time buyers’ share of existing-home sales rose to 30% last month, up from 28% in February. The long-term average is closer to 40%. Distressed properties’ share of existing-home sales fell to 14% in March from 16% in February.

According to the Federal Housing Finance Agency (FHFA), data based on mortgages sold or guaranteed by Fannie Mae and Freddie Mac, home prices rose 0.6% in February, and were up 6.9% from the year-ago period.

On the Employment front: The number of Americans who applied for unemployment benefits last week rose by 24,000 in April to the highest level since the end of March, but most of the bump may have been related to a seasonal quirk tied to the Easter holiday. Claims often rise around Easter because the holiday falls on different dates each year and that makes it harder for the government to conduct seasonal adjustments. Continuing claims decreased by 61,000 to a seasonally adjusted 2.68 million in the week ended April 10. That’s the lowest level since December 2007, when the Great Recession started. Continuing claims 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!

The Weekly Rap! Friday April 18th, 2014

The National Debt is currently: $17,582,052,685,587.00 is higher by about 12 BILLION. I post this so we will be aware of what we are leaving the next generation.

Markets are closed today due to Good Friday. I hope you have a great weekend and a Happy Easter however you choose to celebrate it. Eggs from a rabbit anyone???

The Dow last traded at 16,408 about 380 pts. higher than where it was last Friday. The S&P 500 is trading at 1,864. Gold is trading at $1,294 an ounce, while oil futures at $104.59 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.80/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 103.95 about .75 worse than where we were last Friday at this time. 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.

In economic news this week; The reader’s digest version is the economy is limping along but at least moving in a positive direction. The new Fed Chairwoman is calling current growth “modest to moderate.” Retail sales and inflation rose but very slightly. Manufacturing sees to be picking up a bit, and new home construction is on the rise.

Retail sales rose 1.1% in March, indicating that the economy is moving in a positive direction after the cold winter. The report, which shows the largest gain for sales since September 2012, adds to the perception that the economy has taken a turn for the better. But it will take several months to know for sure whether this strong spending can be sustained. Excluding a 3.1% rise in auto sales, retail sales rose 0.7%, the fastest pace since February of last year. Excluding the 1.3% drop in gasoline-station sales, retail sales rose 1.4%, the biggest rise since March 2010. Excluding both autos and gas, sales rose 1%, still the fastest pace since February 2012.

Consumer prices rose slightly 0.2% in March after a 0.1% gain in February, pushed up by higher costs for shelter and food. Excluding volatile food and energy prices, so-called core prices ticked up 0.2%. On a three- and six-month basis, prices are creeping higher, which is something to keep an eye on, but with wage growth still modest and lots of retail competition, inflation should remain in check for now.

Industrial production grew 0.7%, in March, and February’s data was revised higher to show the biggest monthly advance since May 2010, according to data released by the Fed. The gains mean that production grew an annualized 4.4% in the first quarter. Capacity utilization rose in March to 79.2% from an upwardly revised 78.8% in February.

A reading of manufacturing sentiment in the Philadelphia region improved in April, contradicting a disappointing regional index from the New York Fed released earlier in the week. The Philadelphia Fed’s manufacturing index rose to a reading of 16.6 in April from 9.0 in March, much stronger than a forecast of 10.0. It is the strongest reading since last September. Any reading above zero indicated expansion. The index has improved markedly from a negative 6.3 reading in February that was blamed on severe winter weather. The components of the report were mostly positive.

The Empire State manufacturing index, the first of the many regional manufacturing gauges to be released, slipped to 1.3 in April from 5.6 in March, the New York Fed reported. Any reading above zero indicates improving conditions.

Economic activity increased in most of the country as the weather improved, particularly in the snow-ravaged northeast, according to summary of economic conditions published by the Fed. The Beige Book, a collection of reports about the economy, said 10 of its 12 districts saw improvement, mostly of the “modest to moderate” variety. This summary fits with the view of most private-sector economites that activity has rebounded as weather has returned to normal.

Our newest Fed Chairwoman Janet Yellen stated that a strong economy with full employment and stable prices is “tantalizingly” on the horizon. In a speech to the Economic Club of New York, Yellen noted that the central bankers and many economites see a return to full employment and stable prices by the end of 2016. This would be the strongest economy in a decade. “I find this baseline outlook quite plausible,” Yellen said. Read full text of her address. She quickly added that the forecast is still two years away, showing “how far we have to go.” She also stated, “The recovery still feels like a recession to many Americans.” Why? Long-term, joblessness remains high, and quitting is still below pre-recession levels, signaling that many workers are unwilling to trade some job stability and security to advance their careers.

The overall tone of Yellen’s first major public remarks since assuming the helm of the FOMC was broadly in line with recent Fed rhetoric. Yellen is considered to be “dovish” on the monetary policy stance (meaning; promoting monetary policies that involve the maintenance of low interest rates, believing that inflation will have a minimal impact on society. It’s derived from the docile and placid nature of the bird of the same name, and is the opposite of the term “hawk”), but she’s upbeat on the economic growth and inflation outlook. The main message continues to be that the Fed remains committed to providing a helping hand to the economic recovery, while becoming more confident in the ability of the recovery to finally achieve liftoff later this year. See Rant on my blog a little later regarding the Fed and their “stimulus” policies.

MW-CA053_Claims_20140417092545_MGHome-construction pace risesConsumer prices ticked up slightly in March

On the Real Estate front: Construction on new homes in March hit the fastest pace in three months (which still isn’t much), led by single-family homes. Home-construction starts rose 2.8% as they rebounded from a tough winter. Despite March’s gain, the starts rate was down 5.9% from the year-earlier period, the widest annual contraction since April 2011.

Echoing the construction of new homes, a report earlier this week showed confidence among builders in the market for newly built, single-family homes edged up slightly this month to a reading of 47 from 46 in March, according to the National Association of Home Builders/Wells Fargo housing market index. The index has now held below 50 for three straight months. Any number over 50 indicates that more builders view conditions as good than poor. The HMI index gauging current sales conditions in April held steady at 51 while the component gauging traffic of prospective buyers was also unchanged at 32, the NAHB said. The component measuring expectations for future sales rose four points to 57.

On the Employment front: The number of people applying for unemployment-insurance benefits is sticking close to the lowest level since 2007, signaling that employers are maintaining a slow pace of layoffs. The Labor Department reported that initial claims for unemployment-insurance benefits reached 304,000 last week. That tally is up 2,000 from 302,000 in the prior week, which was the lowest level since September 2007.

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!

The Weekly Rap! Friday April 11th, 2014

  I just got my own personal mobile phone App for your smart phone! This will replace my business card as you will always have it with you. You can download it on your mobile phone. It gives you all my contact info with links to my social media sites including: my blog and this Weekly Rap, mortgage and real estate news, a very useful mortgage calculator and more. You can share it with others simply by hitting “share” in the App and texting it to their cell phone. CLICK HERE FROM YOUR SMART PHONE TO ADD: http://bbartok.mortgagemapp.com/mobile

The National Debt is currently: $17,574,181,702,957.00 is higher by about 28 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,089 about 400 pts. lower than where it was last Friday. The S&P 500 is trading at 1,826. Gold is trading at $1,318 an ounce, while oil futures at $104.17 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.75/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 104.65 about .50 belter than where we were last Friday at this time. 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.

In economic news this week; The reader’s digest version is consumer credit is rising, small business optimism is on the rise, the Federal budget (although not balanced and bleeding cash) is getting smaller, our local real estate market is heating up, and employment looks to be improving.

Consumer Credit climbed 6.4% or $16.5 billion in February, mainly due to college loans and auto purchases as reported by the Fed Gods. Consumer credit rose 5.3% in January, 7.0% in December and 5.5% in November. Consumer debt has risen every month since August 2011. Non-revolving credit such as federal student loans jumped 10.1%, or $18.9 billion, in February. Credit-card debt fell by 3.4%, or $2.4 billion. That’s the second straight decline in credit-card debt. Credit card debt has barely risen since 2010, but non-revolving loans have jumped nearly 26% since then.

A measure of small-business optimism improved in March but still didn’t surpass January levels. The National Federation of Independent Business said its small-business “optimism” index rose 2 points to 93.4, helped in particular by those who expect real sales to be higher. The best component, at positive 24%, is “plans to make capital outlays,” and the worst component, at negative 24%, is “earnings trends.”

The Fed Gods apparently had a secret video conference call in early March and reached a general consensus that the 6.5% unemployment rate threshold for the first rate hike was outdated. A summary of the video conference was included in the minutes of the Fed’s March 18-19 meeting released by the Fed. The Gods were clearly worried that changing the forward guidance would impact markets. They noted that, going into the video conference, the Fed and the markets were on the same page about the outlook for short-term interest rates.

After the meeting, the Fed policy committee statement took out any reference to an unemployment rate of 6.5% as a possible threshold to consider raising short term rates. Instead, the Fed said it will “take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments” before deciding to raise short-term rates.

The U.S. budget deficit narrowed sharply in March, the Treasury Department reported, as tax receipts climbed and government spending fell broadly. The government’s shortfall was $37 billion, down 65% compared to the March 2013 deficit of $107 billion. The government’s deficit has been steadily improving. With the March figures, the shortfall for the first six months of the 2014 fiscal year is $413 billion. The year-to-date deficit is down 31% from the same period a year ago.

U.S. producer prices, or inflation at the wholesale level, rose 0.5% in March at the fastest rate in nine months, owing largely to higher costs experienced by clothing retailers, grocers and wholesalers of chemical goods. That’s the largest increase since last June and surpassed the 0.1% estimates. The wholesale cost of services surged 0.7%, the biggest spike in more than three years, to push the index higher. Excluding the volatile categories of food and energy, so-called core producer prices jumped 0.6% last month. The spike in prices pushed the year-over-year increase in wholesale costs to 1.4% from just 0.9% in February. That’s the highest rate since last August.

PPI 4-11-14 Fed Budget 4-11-14 Consumer sentiment highest in nine months

A gauge of consumer sentiment is the highest in nine months, with sunnier views on both current and upcoming economic conditions, according to data released this morning. Markets watch sentiment levels to get a feeling for the direction of consumer spending. The overall consumer-sentiment gauge from the University of Michigan and Thomson Reuters rose to a preliminary reading of 82.6 in April, the highest since July, from a final March level of 80. For context, the gauge average is 86.9 over the year leading up to the start of the recession.

On the Real Estate front: Local data (El Dorado Hills to Placerville) is out for the month ending March 14th. New Listings are up 39% from February, up 206% from December, and 10% from 1 year ago. Homes currently for sale are up 7% from February, up 10% from December, and 36% from 1 year ago. Pending Sales are up 54% from February, up 100% from December, and 1.8% from 1 year ago. The Average price per square ft. is up 4.4% from February, up 5.8% from December, and 17% from 1 year ago. The average “days-on-market” is currently 67 from 74 in February. The average “months-of-inventory” is down to 3.4 from 4.5 last month. The median sold price was higher by almost 15% from February and almost 20% higher than last year at this time. What does this mean for our real estate market you ask? Well, prices are on the rise, more homes are being listed/sold, and more buyers are entering into contract. Our market is heating up!

On the Employment front: Job openings at U.S. workplaces rose to 4.17 million in February, the most in just over six years, from 3.87 million in January. Compared with same period in the prior year, February job openings rose 4%, as private-sector openings increased 5% to 3.78 million, and government positions declined. With 10.46 million unemployed people in February, there were about 2.5 potential job seekers per opening, below January’s ratio of 2.6. In February 2013, there were 12.05 million unemployed people, about 3 potential seekers per opening. When the recession began in December 2007, there were less than two potential job seekers per opening.

Once older workers lose a job, they face steep obstacles in getting rehired, and equally difficult financial challenges in managing a bout of long-term unemployment, including the prospect of never working again. On average, workers age 55 and up were unemployed for 45.6 weeks, compared with 34.7 weeks for workers younger than 55, according to AARP’s analysis of Bureau of Labor Statistics data from February.

The number of people who applied for U.S. unemployment benefits last week fell to a nearly seven-year low of 300,000, a sign the labor market might be experiencing a spring revival. Initial claims ended April 5 sank by 32,000 from a revised 332,000 in the prior week. The last time claims were that low was in May 2007, six months before the Great Recession began.

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!

The Weekly Rap! Friday April 4th, 2014

The National Debt is currently: $17,565,412,702,957.00 is higher by about 20 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,501 about 250 pts. higher than where it was last Friday. The S&P 500 is trading at 1,872. Gold is trading at $1,303 an ounce, while oil futures at $101.38 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.75/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 104.15 about .15 better than where we were last Friday at this time. 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.

In economic news this week; The reader’s digest version is the economy continues to limp along at a snail’s pace with The employment report being the big news of the week. The U.S. created 192,000 jobs in March, and the unemployment rate was unchanged at 6.7%.

Purchasing Managers’ Indexes (PMI) are economic indicators derived from monthly surveys of private sector companies. The two principal producers of PMIs are Markit Group, which conducts PMIs for over 30 countries worldwide, and the Institute for Supply Management (ISM), which conducts PMIs for the US. The surveys are done monthly by polling businesses that represent the makeup of the respective sector. The surveys cover private sector companies, but not the public sector. We watch these for an indication of future economic outlook. Results over 50 indicate an expansion from the prior month.

The Chicago purchasing-managers index fell to 55.9 in March hitting the lowest level since August, down 3.9 points from February led by drops for new orders and employment. The Chicago-PMI survey registers manufacturing and non-manufacturing activity in the Chicago region. Investors care about this indicator because the Chicago region somewhat mirrors the nation in its distribution of manufacturing and non-manufacturing activity.

The final Markit PMI for the U.S. in March was unchanged at 55.5, down from 57.1 in February. The slight drop-off in the March PMI comes after the Markit index rose in February to the highest level in almost four years, helped by manufacturers catching up after winter-related softness in January.

The Institute for Supply Management said its manufacturing index rose to 53.7% from 53.2% in February. The employment gauge dropped 1.2 points to 51.1%, but the ISM’s new-orders index edged up to 55.1% from 54.5%, and production surged to 55.9% from 48.2%, marking the best performance in 2014. Fourteen of the industries tracked by ISM reported growth last month while four recorded a decline.

The U.S. Commerce Department reported that orders for goods produced in U.S. factories rose 1.6 % in February. Factory orders fell by a revised 1% in January, compared with a prior estimate of a 0.7% decline. Orders for durable goods (products meant to last at least three years) rose 2.2% in February. Orders for nondurable goods increased 1%.

On the Real Estate front: There was no real estate related news released this week.

On the Employment front: The U.S. created 192,000 jobs in March, and the unemployment rate was unchanged at 6.7%, the result of more than a half-million people joining the labor force in search of work, according to Labor Department figures . The expectation was for an increase of 200,000 nonfarm jobs. In March, hiring was strongest in the professional ranks and at bars and restaurants. Manufacturing shed 1,000 jobs but was the only sector to do so.

Average hourly wages, meanwhile, dipped just 1 cent to $24.30 after several strong gains. And the average workweek jumped 0.2 hours to 34.5 hours, matching a post-recession high. The labor-force participation rate moved up to 63.2% from 63%, as 503,000 people searched for work, a sign that they think more jobs are available. Employment gains for February and January were revised higher by a combined 37,000. The number of new jobs created in February was raised to 197,000 from 175,000, while January’s figure was increased to 144,000 from 129,000.

The gain in employment might not be large enough to assure that job creation and broader economic growth are ready to reignite after a first-quarter slowdown. The main takeaway from this report is that employment growth and upward revisions along with a rebound in the workweek are good news, not great news, but good news. The flat growth in hourly earnings and the lack of a drop in the unemployment rate reminds us that the Fed has plenty of breathing room, for now.

Unemployed rate still elevated Hiring remains depressed

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!