The Weekly Rap! Friday Aug 22nd, 2014

The National Debt is currently: $17,660,164,295,587.00  is Higher by another 7 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.

The Dow last traded at 17,025 about 350 pts higher than where it was a week ago.  The S&P 500 is trading at 1,991.  Gold is trading at $1,280 an ounce, while oil futures at $93.38 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.55/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 102.59 about .20 worse than where we were last week.  We have been trading in a fairly tight range since May with the low being 101.75 and the high being 103.00.  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.   

If you have any potential buyers looking for a home, it’s time to get them “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 your buyers almost as strong as a cash buyer and significantly speeds up the loan process.  I just closed a loan that was 25 days from contract to funded/recorded.  Think about it; you won’t have to deal with the 17 day removal of the loan contingency because your offer will not have one and you can have a shorter escrow.  If you have clients on the MLS watch list get them approved, and they will be a stronger client and more loyal to you when the time comes to purchase.  Call me today and I will have your clients approved for you. 

In economic news this week; the reader’s digest version is the economy continues to plug along keeping its head above water.  Inflation remains tame.  Construction of new homes is on the rise.  And resale of homes is also on the rise.

Consumer prices rose slightly in July 0.1%, led by highest costs of food and housing, but the overall pace of inflation cooled slightly after a sharp run-up earlier in the year. The core CPI, which excludes volatile food and energy costs, also increased 0.1%.  Consumer prices have risen just 2% over the past 12 months, down slightly from June.  The core rate has risen 1.9% in the same span, unchanged from the prior month.

The Federal Reserve views core prices as a more accurate barometer of underlying inflationary trends. Real or inflation-adjusted hourly wages, meanwhile, were unchanged for the second straight month. Real hourly wages have either been flat or lower for five straight months, so consumers don’t have much more to spend despite an improving labor market. Over the past 12 months inflation-adjusted hourly wages have risen a scant 0.3%. Americans are working somewhat longer hours, however, to bring home a bit more money.

The Fed Gods say the labor market is improving faster than expected, but the majority are still not convinced it’s strong enough to alter their approach on interest rates anytime soon. According to Federal Reserve’s policy meeting minutes released this week they agreed to state that labor market conditions improved … while also stating that a range of labor market indicators suggested that there remained significant underutilization of labor resources.” Officials seemed concerned by the housing market’s weak performance stating the housing market’s recovery has remained slow and “persistent weakness” could hurt the economic outlook.  Officials cited factors such as low expectations for income, high student debt and trouble obtaining mortgages.  At the July 29-30 meeting, the Fed voted 9-1 to maintain its current policy of slowly withdrawing stimulus from the economy. The majority also reiterated the Fed is likely to keep the short-term federal funds rate below what is considered normal for “some time.”

On the Real Estate front:  A gauge of confidence among home builders rose two points to 55 in August, the highest level in seven months, according to National Association of Home Builders/Wells Fargo report. Readings above 50 signals that builders are generally optimistic about sales trends.  August marks the second consecutive month of above-50 readings. Recent optimism among builders is likely due to job growth and low mortgage rates, among other factors, according to NAHB.  NAHB’s gauge of builders’ views on upcoming sales of single-family homes also rose two points to 65 in August, while a barometer of builders’ views on present sales rose two points to 58.  A gauge of prospective-buyer traffic increased three points to 42.

Construction on new homes jumped 15.7% in July to reach the highest level in eight months, offering another piece of evidence that the housing market is recovering after an early-year lull.  What’s more, the decline in new construction in June was much smaller than previously reported.  Initially, the government had reported a 9.3% decline in starts in June, but revised figures show just a 3.9% drop. At the time, the report stoked concerns that the housing market might be weakening because of higher mortgage rates and real-estate prices.  The housing starts report is notorious volatile and often subject to large changes. New construction rose in all regions except the Midwest.

Americans are renting more in part because they cannot afford to buy new homes, a reminder that the economy is still not fully healed after the deep recession of 2007-2009. In a normal economy, the U.S. should be building about 1.7 million new homes a year.  We’re currently at an annual rate of 656,000.

Sales of previously owned homes in July hit the fastest pace in 10 months, suggesting that the housing sector is picking up after a rough start to the year.  The National Association of Realtors said sales of existing homes rose 2.4% in July to an annual rate of 5.15 million, the fourth consecutive month of gains.  “More people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise,” said Lawrence Yun, NAR’s chief economist.

On the Employment front:  The number of people applying for unemployment benefits fell by 14,000 to 298,000 in the week of Aug. 10, below 300,000 for the third time in five weeks, signaling once again that layoffs remain at a post-recession low amid a rise in hiring in most major U.S. industries.  The average of new claims over the past month, meanwhile, climbed by 4,750. Although that’s a four-week high, the monthly average is still near the lowest level in eight years. The monthly average is less erratic than the weekly figure and offers a better look at underlying trends in the labor market. Also, the government said continuing claims decreased by 49,000 2.5 million in the week ended Aug. 9. 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!

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The Weekly Rap! Friday Aug 8th, 2014

The National Debt is currently: $17,635,473,436,587.00  is Higher by another 28 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.

The Dow last traded at 16,440 about 20 pts lower than where it was a week ago.  The S&P 500 is trading at 1,917.  Gold is trading at $1,312 an ounce, while oil futures at $97.39 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.63/Gal. 

In economic news this week; The reader’s digest version is the economy seems to be picking up a little steam with increases in productivity, factory orders, consumer credit, and manufacturing. 

Banks are seeing broad-based demand for loans but are not altering their standards in a major way, a Federal Reserve survey released Monday showed.  The survey of 75 domestic and 23 foreign banks operating in the U.S. shows that banks are responding by continuing to slowly ease standards for various commercial and industrial loans.  Banks reported stronger demand for prime residential mortgages for the first time since last summer and for home equity lines for the first time since October 2013.  The July survey also shows that new qualified mortgage rules has reduced approval rates on applications for prime jumbo home-purchase loans and nontraditional mortgages but have not impacted prime mortgages.

Factory orders in June rose 1.1%, the Commerce Department said Tuesday.  That’s the fourth gain in five months and the level of $503.2 billion is the highest on record.  Durable-goods orders rose 1.7%, higher than the initially estimated 0.7% gain.

U.S. service-sector companies grew in July at the fastest pace in nine years, according to a survey of senior executives. The Institute for Supply Management said its nonmanufacturing index rose to 58.7% last month from 56.0% in June.  That’s the highest rate since December 2005. Reading over 50% indicate more companies are expanding instead of shrinking. Sixteen of the 18 industries tracked by Tempe, Ariz.-based ISM reported growth last month. The ISM’s new-orders index climbed 3.7 points to 64.9% – also the highest in nine years – while the employment gauge advanced 1.6 points to 56.0%. The employment index is the highest since January.

U.S. consumer credit growth increased sharply in June, a possible sign spending could ramp up in coming months.  Consumers increased their debt in June by $17.3 billion, down only slightly from a $19.6 billion gain in the prior month, the Federal reported.  Non-revolving category of debt, especially federal student loans, led the monthly increase, rising $16.3 billion or 8.4% in June. Once again, credit-card debt rose only slightly, rising a slim $941 million or 1.3% after a gain of 2.4% in the prior month.

U.S. productivity rebounded modestly in the second quarter after it fell sharply in the prior three months.  Productivity in the April-June quarter increased 2.5%, compared with a revised 4.5% drop in the prior quarter, according to a preliminary reading by the Labor Department.  The first-quarter reading was the lowest since the fourth quarter of 1981.  Higher productivity is regarded as the key to a rising standard of living over time because it tends to lead to higher pay for workers and larger profits for companies.  In the short run, though, many factors can affect productivity.  One of the reasons productivity has been subdued in recent quarters is because hiring in the U.S. has been strong.

On the Real Estate front:  Nothing to report this week.

On the Employment front:  The number of people who applied for unemployment benefits fell below 300,000 for the second time in three weeks, solidifying a picture of an improving U.S. labor market in which layoffs remain low and companies are hiring at the fastest pace in years. Initial jobless claims fell by 14,000 to 289,000 in the week of July 27 to Aug. 2.  Continuing claims decreased by 24,000 to 2.52 million in the week ended July 26. 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 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