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
Mortgage Advisor MLO# 445991
The nicest compliment I can receive is the referral of your family, friends and co-workers.