The Weekly Rap! Friday July 25th, 2014

The National Debt is currently: $17,600,771,776,587.00  is Higher by another 6 BILLION.  The interest pay-out alone on the debt is 225 Billion per year!  I post this so we will be aware of what we are leaving to our children.

If you are looking for a new home or know of any potential buyers looking for a home, it’s time to get  “approved by an Underwriter” not just “pre-approved.”  Most pre-approval letters are not worth the paper they’re printed on, but underwriter approved will make you almost as strong as a cash buyer and significantly speeds up the loan process.  Think about it; you won’t have to deal with the 17 day removal of the loan contingency because your offer will not have a loan contingency and you can have a shorter escrow. Call me today and get approved before you go shopping. 

The Dow last traded at 16,940 about 160pts lower than where it was a week ago.  The S&P 500 is trading at 1,977.  Gold is trading at $1,304 an ounce, while oil futures at $101.99 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 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 102.34 about .10 worse than where we were last week.  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, not much change this week.  The economy continues to grow albeit at slow levels.  It looks like more home buyers prefer purchasing an existing home over an newly built one as sales of existing homes were higher while new home sales declined.  Consumer inflation is still in check.

Economic activity edged down to 0.12 in June, from 0.16 in May according to the Chicago Fed national activity index released Monday.  This is still the fourth month above zero. A reading of zero is equal to trend growth. The index is a weighted average of 85 indicators of national economic activity.  The three-month average slowed to 0.18 in June from 0.33 in May.

Consumer prices gained again in June but the rise was not as broad-based as in the prior month and was driven mainly by the rising cost for gasoline.  The Labor Department said the consumer price index increased 0.3% in June after a 0.4% gain in May.  The gasoline index rose 3.3% in June, and accounted for two-thirds of the increase in overall June prices.  Food and so-called core prices slowed in June.  Food prices rose 0.1% in June, the smallest monthly increase since January, after a steep 0.5% gain in May.  Excluding volatile food and energy prices, “core” prices rose just 0.1% after three straight gains of 0.2% or more.

June’s relatively tame reading should alleviate concerns that inflation is beginning to break to the upside.  While the Fed’s favorite measure of inflation, the personal consumption expenditure index, has been more moderate that the CPI, there is some concern the central bank is falling behind the curve on inflation.  The Fed is meeting next week and is expected to take another step toward ending its bond-buying program. After that program ends in October, the Fed has said it will wait a “considerable period” before raising rates.

Orders for durable goods such as computers, aircraft and heavy machinery rose 0.7% in June, but the details of the report suggest the rebound in business investment in the second quarter will not be as strong as previously hoped.  The increase in orders for big-ticket items last month was the fourth increase in the last five months, with gains in most major categories.

On the Real Estate front:  Nationally, home prices rose 0.4% in May, and April’s price move was revised to show 0.1% growth from a previously estimated no change, the said Tuesday. The FHFA (Federal Housing Finance Agency) house price index is based on mortgages bought or guaranteed by Fannie Mae and Freddie Mac.  Compared to May 2013, prices were up 5.5%, led by 9.6% growth in the Pacific region. Prices are 6.5% below the April 2007 peak, FHFA added.

Rising for a third consecutive month, sales of existing homes in June hit the fastest pace in eight months, signaling that the housing market’s recovery hasn’t petered out.  The National Association of Realtors reported Tuesday that sales of existing homes grew 2.6% in June to an annual rate of 5.04 million.

The sales pace of new single-family homes fell 8.1% in June to a three-month low, according to the Commerce Department adding to worries over the housing market’s recovery.  New-home sales in June were down 11.5% from a year earlier. The supply of new homes rose to 5.8 months from 5.2 months in May. This metric measures how long the number of homes on the market would last at the current sales rate, assuming that builders did not add to inventory.

On the Employment front:  The number of people who applied for regular state unemployment-insurance benefits last week tumbled by 19,000 to 284,000, the lowest level since February 2006, signaling that companies have further slowed down the pace of layoffs and are letting go of few workers.  The average of new claims over the past month declined by 7,250 to 302,000, the lowest level since May 2007, the U.S. Labor Department reported. The government also said that continuing claims in the week that ended July 12 dropped by 8,000 to 2.5 million, the lowest level since June 2007. 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!

Bill Bartok ESIG 9-25-13

The Weekly Rap! Friday July 4th, 2014

The National Debt is currently: $17,581,866,962,587.00 is Higher by about 43 BILLION.  The interest pay-out alone on the debt is 246 Billion per year!  I post this so we will be aware of what we are leaving to our children.

The Dow last traded at 17,068 about 100pts higher than where it was a week ago and establishing another all time high.  The S&P 500 is trading at 1,985.  Gold is trading at $1,321 an ounce, while oil futures at $103.77 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.82/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 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 102.09 about .75 worse than where we were last week.  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 Employment has picked up, pending home sale are higher as are home prices, and manufacturing is trudging along.

There are 2 million “missing households” in the US – which represents pent up demand for new residences.  These are Millennials who are living with their parents or rooming together in an apartment. That represents 2 years of housing starts at the current pace. Rents are increasing, jobs are tough to get, and student debt is high. Fun fact – we haven’t been building this few homes since World War II, according to the NAHB.

In the manufacturing sector; Chicago PMI retreated to 62.6 in June after hitting a seven-month high in May. A fall in new orders led the decline in June. But the index remains above 60 for the third straight month, signaling a bounce-back in the second quarter after a sharp decline in first quarter gross domestic product. Any reading above 50 indicates expansion.  

The final Markit reading of U.S. manufacturing conditions in June totaled 57.3. Despite the slight decline, this is still the highest reading of the index since May 2010.  The Institute for Supply Management said its manufacturing index registered 55.3% in June, just a hair below May’s reading of 55.4%. Any number above 50% signals expansion.

Fed Chairwoman Janet Yellen was at the podium again this week saying Federal Reserve monetary policy should continue to focus on jobs and inflation and leave stability concerns to regulation.  “I do not presently see a need for monetary policy to deviate from a primary focus on attaining price stability and maximum employment, in order to address financial stability concerns,” Yellen said in a speech at the International Monetary Fund.

On the Real Estate front:  Pending home sales jumped 6.1% in May to reach the highest level in eight months, signaling that upcoming closings of existing homes are likely to speed up, the National Association of Realtors reported Monday. The index of pending home sales hit 103.9 in May, compared with 97.9 in April. Low mortgage rates, a growing number of homes on the market and stronger job creation will all likely fuel more sales.  Although pending sales have risen three months in row, first-quarter closings were weak enough that NAR expects them to drag down 2014’s total sales tally below last year’s result. In May the pending-sales gauge was down 5.2% from a year earlier. An index reading of 100 equals 2001’s average contract activity level.

As spring sales continued, home prices in May rose 1.4%, and 10 states set record highs.  Record prices were hit in states such as Texas, New York and North Dakota.  Despite the monthly gain, annual growth slowed down as more homes were put on the market. Annual home-price growth hit 8.8% in May, down almost three percentage points from a quarter earlier. Looking forward, CoreLogic expects annual growth to slow to 6% by May 2015. Including May 2014’s increase, national home prices were about 13.5% below a 2006 peak.

Jobs Growth June 2014

On the Employment front:  The U.S. produced another big batch of jobs in June and the unemployment rate fell to a nearly six-year low as more people entered the labor force and found work, another strong signal that economic growth has rebounded after a dismal first quarter.  The economy created 288,000 jobs last month, posting a fifth straight gain of 200,000 or more, according to the government’s survey of worksites. The last time that happened was in 1999.  The unemployment rate, meanwhile, fell to 6.1% from 6.3%, based on a separate Labor Department survey of Americans households. That’s the lowest jobless rate since September 2008.

The strong jobs report is further indication that the economy continues to build momentum after a surprising rough patch in the first quarter, when growth contracted by 2.9%.  The first-quarter decline marked the steepest drop in growth outside of a recession since 1947, but the economites chalk it up to an a particularly harsh winter and other unusual factors that are unlikely to be repeated soon.The better-than-expected employment report pushed the Dow above the 17,000 mark for the first time ever and Bond yields higher.

Curb your enthusiasm folks… while the increase is good news, the year-over-year acceleration is still small, arguing that this has been catch-up.  Hours worked and average hourly earnings do not imply much momentum for the economy.  The number of people who had to take on a part-time job for financial reasons jumped by 275,000, offsetting a similarly sized decline in Americans who’ve been without a job six months or longer. And the fewest young adults entered the labor market in June in four years, though that could be the result of a longer school year.

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

Sincerely,

Bill Bartok

Mortgage AdvisorMLO# 445991

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

Thank you!

Bill Bartok ESIG

The Weekly Rap! Friday June 20th, 2014

The National Debt is currently: $17,538,072,962,587.00 is Higher by about 6 BILLION.  The interest pay-out alone on the debt is 246 Billion per year!  I post this so we will be aware of what we are leaving to our children.

The Dow last traded at 16,947 about 200pts higher than where it was a week ago.  The S&P 500 is trading at 1,962.  Gold is trading at $1,314 an ounce, while oil futures at $106.62 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.79/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 105.50 about .30 better than where we were last week.  We’ve broken out of the past trading range and rates are still trending lower at this point.  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 inflation is higher, layoffs are lower, manufacturing is steady, and there were no surprises of major changes from the Fed at their regular meeting.

The Federal Reserve Bank of New York reported this week that Manufacturing activity in their “Empire State” general business conditions index basically held steady in June after hitting an almost four-year high in May. The Philadelphia Fed’s manufacturing index jumped to a reading of 17.8 in June from 15.4 in May. This is the highest reading of activity since last September.

Industrial production bounced back in May, according to Federal Reserve which also showed that April output wasn’t as bad as initially estimated. Production climbed 0.6% in May, after falling 0.3% in April and rising 0.8% in March.

Signaling that economic growth could pick up in coming months, the leading economic index for the U.S. rose 0.5% in May to 101.7, the Conference Board reported. “Recent data suggest the economy is finally moving up from a 2% growth trend to a more robust expansion,” said Ken Goldstein, economist at the Conference Board, in a statement.  I want to be an economist when I grow up.  They get paid to guess and whether they’re right or wrong, kind of like the weather man.

Consumer prices, CPI, rose sharply in May for the second straight month and the rate of inflation over the past year reached its highest level since late 2012, an upward trend that could worry the Fed Gods unless it pulls back soon.  The consumer price index jumped 0.4% last month following a 0.3% gain in April, the Labor Department said Tuesday.  Annualized over the past 12 months, consumer inflation is at 2.1%.  Just eight months ago, inflation was running at just a 1% pace.  

The Fed has been aiming to boost inflation to around 2% or so from what it considered an economically damaging low level, but the sudden surge could set off alarm bells. While I doubt that it will, this could cause “market” concern that the Fed might be forced to raise interest rates earlier than it planned.  Excessive inflation appears unlikely in the absence of stronger growth, further tightening in labor market conditions, and greater pressure on wages.  Historically speaking, on an annual basis inflation is still very low. Once annual inflation gets above 5% it becomes extremely troublesome for the economy. But with inflation so low in spite of the Fed’s efforts to print money some are saying that Deflationary forces are stronger than the Fed.  Long term average inflation is about 3.2.  The core CPI, which excludes volatile food and energy costs, rose by 0.3%, the biggest gain since August 2011. The cost of housing, new cars, airline tickets, medical care and prescription drugs all increased.

inflation_by_decade_sm   Housing starts May 2014

On the Real Estate front:  Home builders’ confidence rose four points to 49 in June, the highest level in five months, but respondents were still a bit pessimistic, according to the National Association of Home Builders/Wells Fargo housing-market index released Monday.  The index has been below 50 since February, indicating that builders, generally, are pessimistic about sales trends. “Consumers are still hesitant, and are waiting for clear signals of full-fledged economic recovery before making a home purchase. Builders are reacting accordingly, and are moving cautiously in adding inventory,” said David Crowe, NAHB’s chief economist. Construction on new homes fell by 6.5% in May and builders trimmed plans for future projects in another sign that a hoped-for spring revival in the housing market remains elusive.

On the Employment front:  With layoffs at very low levels and more jobs available, the number of Americans seeking unemployment benefits continues to hover near a post-recession bottom.  Initial jobless claims declined by 6,000 to 312,000 in the week ended June 14.   Yet despite the decline in jobless claims, millions of Americans still cannot find work and the number of long-term unemployed remains higher now than at any time before the 2007-2009 recession struck.  The unfinished recovery in the labor market is the chief reason why the Fed plans to keep interest rates low for the foreseeable future, a point reiterated by Chairman Janet Yellen on Wednesday after the bank’s latest gathering in Washington.

The economy has now recovered all the jobs it lost from the Great Recession. It’s only taken seven years.  Industrial production is now higher.  But consumer confidence is, depending on your measure, somewhere between 10% to 25% below its 2007 peak.  It turns out; Fed Chairwoman Janet Yellen feels pretty much the same way as other Americans. For example, this is what the world’s most powerful central banker had to say Wednesday when asked if, finally, she’s confident the economy is running above its long-run potential.  “When you say confident, I suppose the answer is no, because there is uncertainty,” she said. Yes, she continued, there’s accommodative policy from her Fed, there’s diminished fiscal drag, easing credit conditions, improving household debt finances, rising home prices, rising equity prices. But she returned to the word “uncertainty,” and it didn’t seem like just obligatory caution.

In the Fed’s statement following their meeting on Wednesday, Yellen was more kitten than lion, sticking to her guns that the central bank can hold short-term interest rates steady until the middle of next year and then raise them gradually, and downplaying recent strong inflation readings.  As expected, the central bank trimmed bond purchases by another $10 billion, staying on track to end its long-running stimulus program before the end of the year. This is the fifth straight meeting with a $10 billion cut in the asset purchases. The Fed will now buy $35 billion a month in Treasuries and mortgage-related assets, starting in July.  At the same time, the Fed lowered its forecast for “longer run” interest rates to 3.75% from closer to 4%. The last change is important because it signals the central bank won’t push up interest rates all that high during this recovery phase.

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

Sincerely,

Bill Bartok

Mortgage AdvisorMLO# 445991

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

Thank you!

Bill Bartok ESIG 9-25-13

The Weekly Rap! Friday June 13th, 2014

The Weekly Rap will be getting out a bit later as I have taken on another endeavor.  Many of you know that I also have another passion, food and cooking.  I have taken the position as new Chef at the Bass Lake Golf Course Bar & Grill.  Please know though, that my main focus is still being a Mortgage Advisor.  We currently serve just breakfast and lunch and have room for 50+ on the beautiful outdoor patio and 38 inside.  I will be revamping the menu so stay tuned…

The National Debt is currently: $17,531,034,962,587.00 is Higher by about 7 BILLION.  The interest pay-out alone on the debt is 246 Billion per year!  I post this so we will be aware of what we are leaving to our children.

The Dow last traded at 16,775 about 200pts lower than where it was a week ago.  The S&P 500 is trading at 1,936.  Gold is trading at $1,276 an ounce, while oil futures at $106.77 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.81/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 105.20 about .40 worse than where we were last week.  We’ve broken out of the past trading range and rates are still trending lower at this point.  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 plug along, Small Business owners are more optimistic, Retail Sales continue to plug higher, Wholesale prices are lower, and home listings locally are much higher than last year.

Small-business owners have recovered all of the optimism lost during the Great Recession, according to a report released this week. The higher level of confidence is feeding into price increases.  The National Federation of Independent Business’s small-business optimism index increased again to 96.6. last month, from 95.2 in April. The May reading is the highest since September, 2007, before the last recession.  The improvement though, while welcome, is far below readings that normally accompany an expansion.

Our government recorded a budget deficit of $130 billion in May, which is 6% lower than in the same month last year.  For the fiscal year to date, Our government has spent $436 billion more than it’s taking in.  It is though 30% lower than the same period in fiscal 2013. The deficit hit a record of $1.4 trillion in 2009.

Retail Sales rose 0.3% last month on strong demand for cars, trucks and home-improvement products, but spending tapered off at most other retailers after a big bump in demand in April.  Despite the mixed report, the pace of sales in April and May taken together reflect an economy growing at a moderate pace in the spring after the U.S. suffered a sharp contraction in the first quarter. Retail sales account for about one-third of consumer spending, the main engine of economic activity.

Retail Sales May 2014

Prices at the Wholesale level (PPI) unexpectedly sank in May, as prices dropped across the board, easing concern that inflation pressure might be stirring in the pipeline.  The producer price index dropped 0.2% after rising 0.6% in April and 0.5% in March, the Labor Department said. The Federal Reserve has actually been trying to nudge inflation higher. They were caught off guard by the weak inflation seen last year and have been heartened by signs that inflation is stabilizing in the past few months. But Fed officials pay much more attention to the personal consumption expenditure index, which measures prices consumers pay.

Consumer sentiment declined to an early June reading of 81.2, the lowest level in three months, from a final May level of 81.9, according to the University of Michigan and Thomson Reuters report. Economists watch sentiment levels to get a feeling for the direction of consumer spending.

On the Real Estate front:  For the El Dorado Hills/Cameron Park/Shingle Springs areas: From April to May New listings are higher by 14% and higher by 81% over this time last year.  Average price per Sq/Ft is about the same from a month ago but higher by 10% from a year ago.  As you could probably guess the average-days-on-market is higher due to increased inventory.  The average sold price is $552,000 vs. $473,000 just a year ago. 

On the Employment front:  Job openings rose 7.2% to 4.46 million in April, the most since September 2007, the U.S. Department of Labor reported Tuesday.  Compared with same period in the prior year, April job openings rose 17%, as private-sector openings increased 18%.  With 9.75 million unemployed people in April, there were about 2.2 potential job seekers per opening.  In April 2013, there were 11.68 million unemployed people — about 3.1 potential seekers per opening.  When the recession began in December 2007, there were less than two potential job seekers per opening. The total number of hires remained at 4.71 million. The level of hires was almost 5 million when the recession began.

The number of Americans who applied for unemployment benefits last week increased slightly but remained near a post-recession bottom, indicating little change in a gradually improving U.S. labor market.

Please check out my Blog site: BartoksBlog “Food, Wine and Finance; Recipes for success” at http://www.bartoksblog.com 

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

Sincerely,

Bill Bartok

Mortgage AdvisorMLO# 445991

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

Thank you!

 

The Weekly Rap! Friday May 30th, 2014

The National Debt is currently: $17,518,115,962,587.00 is lower by about 10 BILLION.  The interest pay-out alone on the debt is 246 Billion per year!  I post this so we will be aware of what we are leaving to our children.

The Dow last traded at 16,667 right about where it was a week ago.  The S&P 500 is trading at 1,917.  Gold is trading at $1,245 an ounce, while oil futures at $102.64 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.89/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 105.80 about .30 better than where we were last week.  We’ve broken out of the past trading range and rates are still trending lower at this point.  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; “Economics: The science of explaining tomorrow why the predictions you made yesterday didn’t come true today.”  The reader’s digest version is the economy is plugging along, the economy contracted in the first quarter for the first time in three years, Consumer confidence is a bit higher, home prices are higher,

Millennials are going to make major shifts in corporations over the next decade and most people aren’t ready for the amount of change that’s coming.  By 2025, Millennials will account for 75% of the global workforce and by next year, they will account for 36% of the American workforce. At some companies like Accenture and Ernst & Young, they already account for over two thirds of the entire employee base.  The Millennials like the Baby Boomers are very likely to shape many things to come just as their parents did.  To be continued…

The largest Navy ship-building contract ever boosted orders for durable goods in April, but demand for long-lasting civilian items such as personal computers and appliances slowed a bit after surging in the prior month.  Orders for long-lasting goods rose 0.8% in April, propelled by the biggest burst of orders for defense equipment since December 2012.  The Navy placed a $17.6 billion order in late April for 10 nuclear-powered submarines.  Are the ones we have wearing out or are we planning an invasion somewhere?  The durables report is often quite volatile and subject to large revisions.  Business investment has repeatedly faltered since the recovery began in mid-2009 and the question in whether companies are ready to sustain a faster pace of spending after years of frugality.

The economy contracted in the first quarter for the first time in three years, hampered by harsh weather that disrupted business and slowed construction. Yet the damage seems to be fading fast amid widespread signs that growth has accelerated in the spring.  Gross domestic product, or GDP, the sum of all goods and services produced by the economy, shrank by annual pace of 1% in the first three months of 2014, the Commerce Department said. Initially the government had reported last month that GDP rose at 0.1% rate.  GDP is anticipated to snap back with a 3.8% gain. 

The Conference Board said its consumer confidence index in May rose to 83 from 81.7 in April.  Both the present situation and future expectations indices also advanced.  While there is a real pickup in consumer confidence, six years out from “the Great Recession,” sentiment is still at very weak levels.  Those who plan to buy a home within six months fell to 4.9% in May, the lowest since July 2012; that compares with a percentage of 5.6% in April and as high as 7.4% in December.    

Consumer spending slipped 0.1% in April, the first decline in a year, as we cut back on car purchases and spent less on utilities such as natural gas and electricity as the weather warmed up.Just one month earlier, consumer spending jumped by a revised 1%, reflecting the largest increase since 2009.  A large chunk of the increase in spending in March, and most of the decline in April, was tied to changes in what we paid for utilities. We spent less to heat and power our homes in April than we did in March.

Personal incomes, meanwhile, rose 0.3% in April.  Adjusted for inflation, disposable income rose 0.2% last month.  Disposable income is mainly the money left over after taxes and an increase typically foreshadows an rise in consumer spending. Yet over the past 12 months disposable income has risen just 2%, a rate that needs to rise if the economy is going to grow much faster.

Consumer sentiment May 30, 2014 GDP Q1 2014

On the Real Estate front:  Home prices rose 0.9% in March, the first increase in five months, but annual growth is slowing down a bit.  Including March’s gain, prices across the 20 cities were still about 19% below a 2006 peak.  Year-over-year home prices were up 12.4% in March. Going forward home prices are expected to continue to slow down as inventories expand.  Both the number of new single-family homeson the market, as well as existing homesavailable for sale, rose in April, according to reports released last week.  Here locally in El Dorado Hills, Cameron Park and Shingle Springs as far as new listings go this month May 1 through 29 we had 139 new listings.  Current inventory is 336 homes listed for sale (per MLS).  Last year in the same time period there were 201.

The National Association of Realtors reported that pending home sales rose 0.4% in April, the second consecutive gain after slumping since the summer, signaling that sales of existing homes may pick up. The index of pending home sales hit 97.8 in April compared with 97.4 in March. Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers’ confidence.  Despite April’s gain, the gauge was down 9.2% from a year earlier, hit by few homes available for sale and pricier properties. An index reading of 100 equals 2001’s average contract activity level.  Here locally pending sale increased 9.8% from March to April.

On the Employment front:  The number of people applying for unemployment benefits sank last week to the second-lowest level since the recession ended in mid-2009, suggesting continued improvement in a labor market that’s perked up in the early spring.  Initial jobless claims fell by 27,000 to 300,000 in the week ended May 24, the Labor Department saidThursday. 

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

Sincerely,

Bill Bartok

Mortgage AdvisorMLO# 445991

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

Thank you!

Bill Bartok ESIG 9-25-13

The Weekly Rap! Friday May 23rd, 2014

The commentary is a bit late today due to me having two separate signings this morning and one of them that almost funded in the same day.  It’s been a busy morning.  I hope all of you have a wonderful Memorial day weekend!

The National Debt is currently: $17,528,071,962,587.00 is higher by about 8 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,606 right about 175 points higher than where it was a week ago.  The S&P 500 is trading at 1,900.  Gold is trading at $1,292 an ounce, while oil futures at $104.39 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.89/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 105.53 about .20 better than where we were last week.  We’ve broken out of the past trading range and rates are still trending lower at this point.  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 plugging along, existing home sales are positive, and the Fed Gods are at the podium again.

Existing Home Sales Apr 2014Jobless Claims 5-22-2014Millennials are starting to age into their prime spending years

Ninety percent of Millennials frequently used the internet to search for homes compared to less than half of Silent Generation buyers. Younger generations of buyers were also more likely to find the home they purchased through the internet; older buyers most often learned about the home they purchased from their real estate agent.
The Millennials like the Baby Boomers are very likely to shape many things to come just as their parents did.  To be continued…

The Fed Gods examined “several approaches” for the eventual tightening of monetary policy but only decided to be flexible, according to the minutes from the April meeting released Wednesday that suggested that the time for higher interest rates is drawing closer.  They emphasized the need for base decisions on experience because of the unprecedentedly large size of the central bank’s balance sheet.  According to the minutes, a number of Fed officials said it would be important for the Fed to “communicate still more clearly about the Fed’s policy intentions as the time of the first increase in the federal funds rate moves closer.” Several of the Fed Gods were at the podium this week speaking on the very same topic.

Charles Plosser, president of the Philadelphia Fed. In a speech Tuesday in Washington said “The U.S. economy is likely to grow at an accelerating pace in the second half of 2014 and into next year, possibly requiring the Federal Reserve to begin raising interest rates sooner rather than later.” Plosser reaffirmed his view that the economy will continue to strengthen over the next year. He said a more rapid pace of hiring might lower the unemployment rate, now at 6.3%, below 6% by the end of 2014. He also said he’s optimistic the housing market will bounce back after a recent drop in sales.

William Dudley, the president of the New York Fed, told the New York Association for Business Economics that “The Federal Reserve will take its time lifting interest rates” and that that there will be “a considerable period of time” between the end of its asset purchases (in the fall, he says) and the first rate hike. He said the trajectory of hikes will “probably be relatively slow” – but that depends both on how the economy perform and how financial conditions respond to tightening.  He expects the level of rates over the longer-term to be “well below” the historical average of 4.25%.

Fed Chairwoman Janet Yellen on Wednesday delivered what you’d expect from a commencement speech: graduates, she said, should “tend the fires of curiosity,” listen to others, and show grit in the face of failure. Yellen reminded New York University students in Yankee Stadium that even Babe Ruth, Lou Gehrig and Joe DiMaggio failed most of the time they stepped to the plate, according to a text of her remarks.

The leading economic index (LEI) rose 0.4% in April to 101.4, the Conference Board reported. “Despite a brutal winter which brought the economy to a halt, the overall trend in the leading economic index has remained positive,” said Ken Goldstein, economist at the board.  

Economic growth moderated in April, according to the Chicago Fed national activity index released Thursday. The index fell to negative 0.32 in April from positive 0.34 in March. However, the three-month average rose to 0.19 from 0.04 in March — the highest level since November 2013. The index is a weighted average of 85 different economic indicators, designed so that a reading of zero is equivalent to trend growth. When the three-month average exceeds 0.7, there’s an increasing likelihood of sustained increasing inflation, and when it’s below negative 0.7, there’s an increasing likelihood a recession has begun.

U.S. manufacturing picked up in May, according to the purchasing managers index released by Markit on Thursday.  The manufacturing PMI rose to 56.2 compared to the 55.4 in April. Readings over 50 indicate growth.  Readings for new orders, new export orders and employment expanded at a slower pace than April. Basically this means that manufacturing is at an even pace barely exceeding growth numbers.

On the Real Estate front: Sales of existing homes rose 1.3% in April to an annual rate of 4.65 million, the National Association of Realtors reported.  Details of the report contained at least two nuggets that may bode well for future sales. One, the number of existing homes on the market is rising, a trend that will give buyers more choice and support sales. Inventories jumped almost 17% in April. Two, home-price growth is slowing, which may make would-be buyers more comfortable with entering the market.  The median sales prices for existing homes hit $201,700 in April, up 5.2% from a year earlier supported by low inventory.  Last year, price growth was in the double digits.  This is the first crucial sign that the housing recovery, which had essentially stalled during the past nine months, may be on the verge of a rebound.

On the Employment front:  New applications for unemployment benefits rose in mid-May, reversing a big drop earlier in the month that put initial claims at a seven-year low.  The number of people who applied for new benefits climbed by 28,000 to 326,000 in the week ended May 17.  I guess they just waited a week.

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

Sincerely,

Bill Bartok

Mortgage AdvisorMLO# 445991

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

Thank you!

The Weekly Rap! Friday May 16th, 2014

The National Debt is currently: $17,521,071,962,587.00 is lower by about 27 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,437 right about where it was a week ago.  The S&P 500 is trading at 1,870.  Gold is trading at $1,293 an ounce, while oil futures at $102.09 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.89/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 105.35 about .20 better than where we were last week.  We’ve broken out of the past trading range and rates are still trending lower at this point.  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 showing signs of improvement, not great but improvement.  Inflation is on the rise, retail sale is slightly higher, small business sentiment is higher while consumer sentiment is lower, manufacturing activity appears to be growing at a moderate pace, home building has slowed and employment is improving.

The government recorded a budget surplus of $107 billion in April.  The surplus for April is $6 billion, or 5%, lower than in April 2013. April is usually a surplus month, as Treasury sees a spate of tax payments from individuals and corporations.  Though smaller than last year’s, the April surplus contributes to a steady decline in the deficit for fiscal 2014.  For the first seven months of the fiscal year that began Oct. 1, the deficit is $306 billion. That is $181 billion, or 37%, lower than it was for the same period in fiscal 2013.  In April, the government spent $307 billion and took in $414 billion.

Wholesale prices climbed 0.6% in April, marking the second straight big gain in a government index that underwent a major overhaul at the start of the year.  Excluding the volatile categories of food, energy and trade, core wholesale prices rose a smaller 0.3% last month, the Labor Department reported.  Personal consumption, a new index designed to foreshadow changes in the consumer price index, rose 0.7% in April. Over the past year overall producer prices have risen 2.1%, up from 1.4% in March and just 0.9% in February. The unusually sharp increase in such a short period raises questions about the usefulness of the fresh-look PPI index, at least in the short term.

Consumer prices posted the biggest increase in April since last summer as the cost of many staples rose, making it harder for Americans to stretch their paychecks to pay for typical household expenses.  The consumer price index jumped 0.3% last month to mark the largest gain since June, the Labor Department said.  As a result, real inflation-adjusted hourly wages decreased 0.3% in April to mark the biggest decline in 14 months. Over the past 12 months real hourly wages have actually fallen 0.1%, the first negative reading in two and a half years.  The yearly pace of inflation rose to 2% in April from 1.5% in the March.

Excluding the volatile food and energy categories, core consumer prices increased 0.2%.  The core rate has risen 1.8% in the past 12 months, and it’s been stuck between 1.6% and 1.8% for more than a year. The core rate is viewed as a more useful gauge of underlying inflationary trends, but it remains well below the level the Federal Reserve considers harmful to the economy.

Americans apparently shopped less in April after splurging in March, with retail sales rising a scant 0.1%.  The increase in March was originally reported as 1.1%. Excluding the auto sector, retail sales were unchanged.  So-called core or control group sales fell 0.2%.  That category strips out cars, gasoline and building materials and gives a better sense of retail-sales trends.  Retail sales account for about one-third of consumer spending, the main conduit of economic activity.  In the past 12 months, retail sales have risen 4%, about two-thirds the historic average.  The latest retail report includes the government’s annual benchmark revisions meant to provide more accurate data.

Small-business sentiment in May rose to the highest level in more than six years, the National Federation of Independent Business said Tuesday. Its small-business optimism index rose 1.8 points to 95.2, the first time it’s surpassed the 95 level since Oct. 2007. There were gains in seven of the 10 components, notably a 9-point jump in those who expect the economy to improve.

The preliminary May reading of the University of Michigan and Thomson Reuters consumer sentiment index fell to a reading of 81.8, down from 84.1 in April.

Manufacturing activity appears to be growing at a moderate pace in the second quarter, according to three separate readings released Thursday.  The most upbeat indicator was a survey of manufacturers in the New York, which hinting that business owners were less melancholy about the outlook.  After barely expanding in April, the Empire state index shot up to 19.0 in May, its highest level since mid-2010, according to a report released by the New York Federal Reserve Bank.

Two other indicators were not as rosy but economists argued that they also hinted at future strength in the sector.  The Philadelphia Fed’s manufacturing index retreated slightly to a reading of 15.4 in May from a 16.6 reading in April. The drop in the Philly Fed index retraces only a small part of the sharp gain in April. The index was 9.0 in March.

The Empire State and Philly Fed data are closely watched because they are one of the first readings of the health of the manufacturing sector in May.  The softest report was the industrial output data for April released by the Federal Reserve , that showed a 0.6% drop in April. But that came after strong gains in February and March.

Home builder index Apr 2014CPI Apr-2014

On the Real Estate front:  Home builders are the most pessimistic they’ve been in a year, with makers of new single-family homes reporting fewer sales.  The housing-market index for builder confidence declined to 45 this month, the lowest reading since May 2013, from 46 in April, the National Association of Home Builders/Wells Fargo reported.  The index has been below 50 since February, indicating that builders, generally, are pessimistic about sales trends.  

While the Overall construction starts on U.S. homes, including apartments rose 13.2%, the fastest pace in five months, according to the U.S. Commerce Department, that jump was led by apartments, as starts for single-family homes only nudged higher.  Starts for single-family homes eked out just a 1% gain in April.  Data for building permits, which are an indicator of future projects, also indicated that demand for apartments, not single-family homes, is driving growth.

Just last week, Federal Reserve Chairwoman Janet Yellen expressed caution about the housing market. “Readings on housing activity, a sector that has been recovering since 2011, have remained disappointing so far this year and will bear watching,” she told U.S. lawmakers. “The recent flattening out in housing activity could prove more protracted than currently expected rather than resuming its earlier pace of recovery.” “The U.S. economy has come far since the deths of the financial crisis but “we have further to go to achieve a healthy economy,”

The good news is that some headwinds for the housing market are abating. Mortgages rates, for example, have declined in recent weeks.  Home-price growth is slowing down. And employers are picking up the pace of hiring.

On the Employment front:  The number of Americans who applied for unemployment benefits declined by 24,000 falling sharply for the second straight week, touching the lowest level since May 2007, but at least part of the drop probably stemmed from lingering seasonal affects tied to a late Easter holiday.  It looks as though Small business is leading the way in hiring as a little more than half of the net number of jobs created since employment began growing in 2010 has been generated by firms with fewer than 250 employees.

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!

Bill Bartok ESIG 9-25-13

The Weekly Rap! Friday May 9th, 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 16,554 right about where it was two weeks ago.  The S&P 500 is trading at 1,872.  Gold is trading at $1,287 an ounce, while oil futures at $99.98 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.95/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 105.15 about .60 better than where we were two weeks ago.  We’ve broken out of the past trading range and rates are trending lower at this point.  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.  It looks like the blame for the slow growth in the economy in the first quarter this year is the Weather.   In other words all reports are taken with a grain of salt so to speak.

The service sector and other non-manufacturing companies posted faster-than-expected growth last month, as production and new orders picked up. The Institute for Supply Management said its non-manufacturing index rose to 55.2% in April, the highest reading in six months, from 53.1% in March. Readings over 50% signal expansion — the higher the reading, the faster the expansion.

Slower economic growth caused, as expected, in part by brutal winter weather led to a sharp decline in productivity in the first quarter.  The productivity of American businesses fell at a 1.7% annual rate from January through March, the Labor Department reported. The drop in productivity stemmed from companies producing fewer goods and services even as the amount of time their employees worked went up. Poor weather contributed to the disparity as many employees had trouble getting to work or performing their jobs as usual.

Fed Chairwoman Janet Yellen testified before the Joint Economic Committee of Congress on Wednesday and based on her recent “speakings,” we look for direction from the Fed Gods.  She stated:The U.S. economy will end the year in better shape despite the slow start in the first quarter, but recent weakness in the housing market bears watching,”  She also said that the weakness in the housing sector has become a concern. “The recent flattening out in housing activity could prove more protracted than currently expected rather than resuming its earlier pace of recovery,” Yellen said.  The Fed chairwoman said given the slack in the economy, a high degree of monetary accommodation remains warranted. She once again emphasized a flexible policy path that would respond to changes in the outlook.

On the Real Estate front:  Banks are not making it easier for potential homebuyers. A Federal Reserve senior loan officer survey (74 domestic and 23 foreign banks operating in the U.S.) showed that banks are holding loan standards steady for prime mortgages and have raised them for nontraditional and subprime loans over the past three months.  Demand for mortgage loans was also weaker. The housing sector has been one of the few troublesome spots in the economy this year, with some analysts pointing to tight credit as a major factor. The Fed’s survey also shows that banks made it easier for commercial and industrial firms to get loans and that these companies have stepped up their borrowing demands.  

Home prices according to CoreLogic rose in March, with certain regional markets posting fresh peaks, while the U.S. as a whole saw a sharp slowdown in annual growth.  In March, home prices were up 1.4% from the prior month, as Arkansas was the only state where prices fell,. Meanwhile, five states, including North Dakota and Texas, which have seen strong jobs growth, posted fresh peak prices in March.

Looking at longer-term trends, prices are slowing down, with dropping affordability cutting demand. For the year through March, home prices rose 11.1%, a notable slowdown from annual growth of 11.8% in February, which was the fastest pace in eight years. That drop of seven-tenths of a point was the sharpest monthly slowdown for annual growth in three years. Over the year ending in March 2015, CoreLogic expects home-price growth of 6.7%, far below annual rates seen in 2014.

Although sellers don’t love to see prices slow down, a national market in which prices continued to run quickly ahead of income growth for a sustained period would ultimately slash demand. First-time buyers, in particular, have a tough time keeping up with rapidly climbing price growth. This key segment of the market has played a weak role in the recovery, with many stuck living with their parents or preferring to rent.

On the Employment front:  Last week it was reported that the U.S. generated 288,000 jobs in April, the best performance since a 360,000 gain in January 2012, and the unemployment rate fell to 6.3%, a strong performance that suggests the economy is accelerating after tepid first-quarter growth. The unemployment rate is the lowest since September 2008.  So far in 2014 the economy has gained an average of 214,000 jobs a month, well ahead of the 2013 pace of 194,000. Yet in an odd twist, the size of the labor force fell by whopping 806,000 despite the apparent willingness of companies to hire more workers. That’s the biggest drop in six months and the second largest decline in 32 years.  The economy was widely expected to show a faster pace of job creation in April, as warmer temperatures induced firms to add workers they might have hired earlier in the year if not for an extremely harsh winter. The poor weather contributed to a meager 0.1% U.S. growth rate in the first quarter.  What’s less clear is if the momentum generated by the switch from winter to spring will continue.

The number of people who applied for unemployment benefits last week fell by 26,000 to 319,000 to mark the lowest level in a month, but the decline likely stemmed from seasonal quirks instead of any major change in hiring trends or layoffs.

Have a great weekend.

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

Sincerely,

Bill Bartok

Mortgage AdvisorMLO# 445991

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

Thank you!

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!