The Weekly Rap! Friday June 26th 2015

The National Debt is currently: $18,281,639,132,587.00  is Higher by another 9 BILLION.  The interest pay-out alone on the debt is 244 Billion per year!  I post this so we will be aware of what we are leaving to our children.

The Dow last traded at 17,900, lower by 950pts over where it was last Friday.  The S&P 500 is trading at 2,096.  Gold is trading at $1,173 an ounce, while oil futures at $59.54 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $2.85/Gal.

The FNMA 30-year fixed 3.0% coupon (interest rates at which banks sell their loans into Fannie Mae), containing 3.25% – 3.625% mortgage rates, the benchmark or how rate sheets are priced these days is currently trading at 98.63 worse in price by about 1.40 over where we were last week.  Our current trading range has now shifted lower and is about 98.5 to about 100.5 and we are testing the bottom.  Each .50 change in the price of the security translates to about 0.125 in rate.  Todays’ drop appears to be related to the massive sell-off in the Chinese stock market. There is some talk about a liquidity crisis that could occur in China. It that were to happen, it could force the Chinese government to sell some of the $1.7 trillion in US Bonds they are holding. That is a big potential overhang for US to digest. Basically the 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 lower the rate.     

If you like this commentary please visit and “Like” my Facebook pageI put all of my prospective buyers through underwriting so that when they place their offer, it is as close to “cash” as you can get.  So to get your clients “underwriter approved”, please contact me and get your offer accepted!

I just learned of a great home improvement loan from Home Depot that is not secured.  In other words it is not a lien on your home.  Loan amounts are up to $40,000 and are based on qualifying with no documentation.  You have 6-months to spend the money (interest only payment period) and then the balance is amortized over 7 years at a fixed rate of 7.99%.  There are no loan fees or annual fees.  This is a great program for both Buyers who would like to do some improvements after purchasing the home, as well as Sellers who need to improve the home prior to selling.  Installation and labor can even be part of the project.  Contact me for additional information or click on the link above.

You really have to read not just the whole article, but between the lines.  An article in today’s Wall Street Journal is titled “The Mansion Bedroom Boom.”  In the article it says that real-estate agents say there is a pickup in activity for extreme second homes with 15 or more bedrooms. It goes on to say that reflecting this confidence is an uptick in listings of luxury homes loaded with bedrooms.  Excuse me, but when did an “uptick in listings” mean there is a boom in the market?  Now if they had said that there was a rise in sales, or even pending sales, or even offers being made, I “might” buy into it.  And another thing, an “uptick” is a writer’s term for a rise when there is barely any.   

The article uses an example that Real-estate developer Jeff Greene has his roughly 53,000-square-foot, 12-bedroom home in Beverly Hills, Calif., listed at $195 million. The property, called Palazzo di Amore, also includes 23 bathrooms, a guesthouse and 50-seat theater, a bowling alley, game room and ballroom with a revolving dance floor.  Ok that’s all well and good.  It goes on to say Mr. Greene spent more than $50 million expanding and renovating the estate, which he purchased in 2007 for $35 million.  Now let’s see…  Just when did $35 million (at the height of the recent RE boom by the way) and $50 Million add up to $195 million!  Really?  Ok on to the economic news.

In economic news this week; It was a lighter week of economic data, and the reader’s digest version is the economy is still trudging along.  Consumer spending is higher.  The housing market showed that total home sales are running at the fastest pace in eight years.  GDP was revised higher in the first quarter than previously estimated.  And Inflation is still running lower than normal.

Apparently the economy didn’t do as badly in first quarter as previously reported contracting in the first quarter by a smaller amount, mostly reflecting higher consumer spending and a lower drop in U.S. exports.  Gross domestic product (GDP), the value of everything a nation produces, declined by 0.2% annual rate as opposed to the previously reported 0.7% drop from January to March the Commerce Department said.  Economic growth in the first quarter was apparently hampered by a number of temporary headwinds such as unusually harsh weather, a major dockworker’s strike and a stronger dollar that made U.S. exports costlier to sell.  The good news is that growth has picked up in the spring and early summer, though perhaps not fast as hoped. In the second quarter, the economy is on track to expand by at least 2% and the Economites forecast a 2.8% increase.

The housing sector has rebounded, consumers are spending a bit more and the value of the dollar has come off a 10-year to give U.S. exporters some relief.  Consumers spent at a moderate pace in the first quarter. The increase in household spending, the main engine of growth, was revised up to 2.1% from 1.8%. Consumers spent more at restaurants and on takeout, the government said.  Spending on transportation was also higher than previously estimated.

The economy was still running below trend in May, according to the Chicago Fed’s national activity index released Monday. The index, a weighted average of 85 different economic indicators, edged up to negative 0.17 from negative 0.19, and the three-month average edged up to negative 0.16 from negative 0.20. A zero reading shows the economy is running at its trend rate of growth, and readings in the three-month average below negative 0.70 indicate a recession has likely begun.

Americans splurged on new cars and trucks in May and spent more to fill up their gas tanks, boosting consumer spending last month at the fastest pace in six years.  Consumer spending rose 0.9% in May to mark the biggest gain since 2009, the government reported.  The amount consumers spent in April and March was also a bit stronger than initially reported. Most analysts believe Americans are in the best financial shape in years, but so far the recovery has been marked by an up-and-down pattern in consumer spending.

Inflation, or the “core” PCE index that excludes food and energy, edged up 0.1% in May.  The core rate rose at a 1.2% pace year over year, down from 1.3% in April.  The low level of inflation is a big reason why the Fed has refrained from raising interest rates. The Fed believes an inflation rate of 2% would be healthier for the economy and a persistently low rate could prompt them to wait even longer to raise rates.

On the Real Estate front:

Sales of existing homes rose 5.1% in May to an annual rate of 5.35 million, hitting the fastest pace since November 2009 and rebounding from a drop in April, the National Association of Realtors reported Monday.  First-time buyers stepped up their purchases, supported by a strengthening jobs market and greater access to mortgages, according to NAR.  A greater number of homes on the market also supported more sales, NAR said. This year is on track to be the best for home sales since 2007, NAR said. On Monday NAR revised April’s pace to 5.09 million.

Sales of new single-family homes in May reached the fastest pace in more than seven years, according to data released Tuesday that signaled strength during the hot spring housing market.  New single-family homes sold at an annual rate of 546,000 in May, the most since February 2008, with growth in two of four regions, the Commerce Department reported.

The housing market has actually been underperforming for years. In the first quarter, fixed residential investment made up about 3.1% of real GDP, below an average of more than 5% over the past five decades.  But key factors are improving. Young families and other first-time buyers are making more home purchases. The jobs environment is steadying. And with the beginnings of a pick-up for wage growth, there’s rising demand and ability among borrowers to take out a mortgage.

Rising home prices should help some struggling borrowers and firm their financial footing. The Federal Housing Finance Agency (homes backed by conventional loans FNMA & FHMAC) reported that home prices rose 0.3% in April, and were up 5.3% from a year earlier.

On the Employment front: The labor market is still showing plenty of vigor, the latest look at layoffs shows.  The number of people who applied for unemployment benefits last week rose by 3,000 to 271,000, the Labor Department said Thursday.  Initial jobless claims have been under the key 300,000 level for 16 straight weeks, the longest stretch since 2000-2001.

Useless Trivia:  And no, I did not fact-check every one of them.

A dime has 118 ridges around the edge.

A cat has 32 muscles in each ear.

A crocodile cannot stick out its tongue.

A dragonfly has a life span of 24 hours.

A goldfish has a memory span of three seconds. Reminds me of voters!

 

Fun for the day: 

An engineer dies and reports to the pearly gates. St. Peter checks his dossier and says, “Ah, you’re an engineer – you’re in the wrong place.”

So the engineer reports to the gates of hell and is let in. Pretty soon, the engineer gets dissatisfied with the level of comfort in hell, and starts designing and building improvements. After a while, they’ve got air conditioning, flush toilets and escalators, and the engineer is becoming a pretty popular guy.

One day God calls Satan up on the telephone and asks with a sneer, “So, how’s it going down there in hell?”

Satan replies, “Hey, things are going great. We’ve got air conditioning, flush toilets and escalators, and there’s no telling what this engineer is going to come up with next.”

God replies, “What??? You’ve got an engineer? That’s a mistake – he should never have gotten down there; send him up here.”

Satan says, “No way! I like having an engineer on the staff, and I’m keeping him.”

God says, “Send him back up here or I’ll sue.”

Satan laughs uproariously and answers, “Yeah right. And just where are YOU going to get a lawyer?”

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 June 19th 2015

The National Debt is currently: $18,272,639,132,587.00  is Higher by another 9 BILLION.  The interest pay-out alone on the debt is 244 Billion per year!  I post this so we will be aware of what we are leaving to our children.

The Dow last traded at 18,860 higher by 180pts over where it was last Friday.  The S&P 500 is trading at 2,114.  Gold is trading at $1,201 an ounce, while oil futures at $58.96 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $2.93/Gal.

The FNMA 30-year fixed 3.0% coupon (interest rates at which banks sell their loans into Fannie Mae), containing 3.25% – 3.625% mortgage rates, the benchmark or how rate sheets are priced these days is currently trading at 100.03 about .75 (in price) over where we were last week.  Our current trading range has now shifted lower and is about 98.5 to about 100.5.  Each .50 change in the price of the security translates to about 0.125 in rate.  If we can hold at these levels I expect that we will trend back to higher levels.  Basically the 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 lower the rate.     

If you like this commentary please visit and “Like” my Facebook pageI put all of my prospective buyers through underwriting so that when they place their offer, it is as close to “cash” as you can get.  So to get your clients “underwriter approved”, please contact me and get your offer accepted!

I just learned of a great home improvement loan from Home Depot that is not secured.  In other words, it is not a lien on your home.  Loan amounts are up to $40,000 and are based on qualifying which can be done from their website.  You have 6-months to spend the money (interest only payment period) and then the balance is amortized over 7 years at a fixed rate of 7.99%.  There are no loan fees or annual fees.  This is a great program for both Buyers who would like to do some improvements after purchasing the home, as well as Sellers who need to improve the home prior to selling.  Installation and labor can even be part of the project.  Contact me for additional information or click on the link above.

In economic news this week; It was another busy week of economic data, and the reader’s digest version is the economy is still trudging along.  The Fed Gods got together.  Business and factory conditions are lower.  Inflation is still muted.  And household rents are higher and the homeownership rate fell to the lowest proportion since the end of 1989.

Business conditions in the New York region worsened slightly, the New York Fed reported Monday. The Empire State manufacturing index for June sank to negative 2.0 from 3.1 in May. This is the second negative reading in the past three months for the index, which is a first reading of manufacturing conditions in the month. Orders fell into negative territory while shipments retreated slightly but stayed positive. The six-month outlook worsened to 25.8 in June from 29.8 in May. This is the lowest level since January 2013.

In addition to Business conditions; the U.S. factory sector, ailing from the strong dollar, global weakness and lower oil prices, has slipped into a technical recession.  The Fed reported that industrial production dropped 0.2% unexpectedly in May and hasn’t increased since November.  The six-month drop in output, adjusted for inflation, puts the sector in a technical recession.  Compared to 12 months ago, industrial production was up 1.4%, compared to 4.8% growth as recently as November.

The Fed Gods got together this week and as anticipated, held their benchmark interest rate near zero, but according to analysts (the statement did not say this exactly), the Fed Gads believe improving economic growth is likely to warrant one or two interest rate increases before the end of the year. In their statement at the end of two days of talks, Fed officials were cautiously optimist about the economy.  Fed Chairwoman Janet Yellen said economy has managed to escape the “soft patch” of the first quarter.  The labor market is improving and some of the downward pressure on inflation from energy prices is abating, Yellen said, but added that more progress is needed before the central bank would be ready to pull the trigger and raise rates.

A spike in gasoline costs boosted consumer prices in May by the most in more than two years, though overall inflationary pressures in the economy have remained muted. The consumer price index rose 0.4% last month, almost entirely because of a surge in gas prices ahead of the summer driving season.  Gas prices shot up 10.4% to mark the largest gain in six years.  Gas prices have leveled off in June, however, and the cost of a gallon of gas is much lower compared to last summer.  The overall cost of food, meanwhile, was unchanged for the second month in a row

Stripping out the volatile food and energy categories, so-called “core” consumer prices rose a much milder 0.1% in May.  The cost of housing, airline tickets and medical care all rose while clothing prices declined.  Despite the increase in prices in May, consumer inflation is basically zero over the past 12 months. The muted level of inflation mostly reflects sharply lower gasoline prices compared to a year ago.  The core rate has risen 1.7% in the same span, down slightly from the prior month. But that’s still a low level historically and less what the Fed would like to see. The central bank has held off from raising interest rates even as the economy has improved partly because of unusually low inflation.

The U.S. leading economic index rose 0.7% in May for the second month in a row, the Conference Board said Thursday. “The U.S. LEI increased sharply again in May, confirming the outlook for more economic expansion in the second half of the year after what looks to be a much weaker first half,” said Ataman Ozyildirim, director of business cycles and growth research, in a statement.

On the Real Estate front: Home builders see a bright future for the market, with sales ramping up, according to the National Association of Home Builders/Wells Fargo reported Monday, even as plans for a merger show that major construction companies are trying to cut costs.  The home builders’ index rose five points to 59 in June, hitting a nine-month high.  Readings above 50 signal that home-construction companies, generally, are optimistic about sales trends, and June marks the 12th consecutive month of above-50 readings.  Gauges of builders’ views on present and upcoming home sales each hit their highest level since late 2005, shortly before the housing bubble burst. Confidence among home builders is higher than levels typically seen at recent building rates. Builders that survived the meltdown may feel particularly confident in their ability to navigate the market.

Landlords kept financial pressure on tenants last month, as annual rent growth far outpaced households’ other costs, according to data released this morning.  The cost to rent a primary residence rose 3.5% over the year through April, while the overall consumer inflation CPI dropped 0.2%, dragged down by plunging energy costs, the U.S. Labor Department reported.  The homeownership rate, which shows the share of occupied homes in which an owner lives, fell to 63.8% in the first quarter, the lowest proportion since the end of 1989, the U.S. Census Bureau said.  Families with income both above and below the median have seen drops in homeownership rates over the past year.  With homeownership at the lowest rate in 25 years, and the rental-vacancy rate close to the slimmest proportion in more than two decades, 2015 is seeing a continuation of a landlord’s market, and letting landlords to charge more.

Just how hot is rent inflation? Annual growth in tenants’ payments has been between 3.4% and 3.5% for the past six months, higher than an average of about 3% for the past two decades. Builders have ramped up apartment construction, a trend that should ease price pressure, but it will take time for that new supply to become available.  As long as demand remains high for apartments, landlords will be able to continue to raise families’ housing costs.  High rent prices may be affecting other areas of the economy as well, keeping households from spending their savings from falling gas prices. Market analysts had expected a stronger labor market and cheaper gas to lead to more shopping, but that effect hasn’t exactly panned out. While energy prices have crept up in recent months, consumer costs for gasoline in April were down more than 30% from a year earlier.

On the Employment front: The number of jobless workers seeking unemployment benefits fell again in mid-June and stood near a 15-year bottom, reflecting the steady pace of hiring across the nation and the unusually low level of layoffs.  Initial jobless claims last week fell by 12,000 to 267,000, the Labor Department said Thursday.  New claims are 15% lower compared to one year ago and they just slightly above a post-recession low of 262,000.  The economy added a preliminary 280,000 jobs in May and hiring picked up in the spring, suggesting the labor market has recovered after a winter soft patch. The U.S. is creating more than 200,000 jobs a month, more than enough to gradually reduce the nation’s official 5.5% unemployment rate over time.

 

Fun for the day: 

Under the age of 40? You won’t understand. Part 2 of 2

Ø  I thought that I was supposed to accomplish something before I was allowed to be proud of myself.

Ø  I just can’t recall how bored we were without computers, Play Station, Nintendo, X-box or 270 digital, and TV cable stations. We weren’t!!

Ø  Oh yeah … And where was the antibiotics and sterilization kit when I got that bee sting? I could have been killed!

Ø  We played “King of the Hill” on piles of gravel left on vacant building sites and when we got hurt, mom pulled out the $1 bottle of iodine and then we got our backside spanked. Now it’s a trip to the emergency room, followed by a 10 day dose of antibiotics and then mom calls the lawyer to sue the contractor for leaving a horribly vicious pile of gravel where it was such a threat.

Ø  To top it off, not a single person I knew had ever been told that they were from a dysfunctional family.

Ø  How could we possibly have known that?

Ø  We never needed to get into group therapy and/or anger management classes.

Ø  We were obviously so duped by so many societal ills, that we didn’t even notice that the entire country wasn’t taking Prozac!

Ø  How did we ever survive?

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.jpg

The Weekly Rap! Friday June 12th 2015

If you like this commentary please visit and “Like” my Facebook pageI put all of my prospective buyers through underwriting so that when they place their offer, it is as close to “cash” as you can get.  So to get your clients “underwriter approved”, please contact me and get your offer accepted!

The National Debt is currently: $18,263,639,132,587.00  is Higher by another 9 BILLION.  The interest pay-out alone on the debt is 244 Billion per year!  I post this so we will be aware of what we are leaving to our children.

The Dow last traded at 17,880 right where it was last Friday.  The S&P 500 is trading at 2,092.  Gold is trading at $1,179 an ounce, while oil futures at $60.00 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.03/Gal.

The FNMA 30-year fixed 3.0% coupon (interest rates at which banks sell their loans into Fannie Mae), containing 3.25% – 3.625% mortgage rates, the benchmark or how rate sheets are priced these days is currently trading at 99.28 right where we were last week.  Our current trading range has now shifted lower and is about 98.5 to about 100.5.  Each .50 change in the price of the security translates to about 0.125 in rate.  If we can hold at these levels I expect that we will trend back to higher levels.  Basically the 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 lower the rate.     

In economic news this week; It was another busy week of economic data, and the reader’s digest version is the economy may by showing signs of life.  Yesterday we learned that Retail Sales for May were +1.2%, Import Prices were +1.3%, Initial Jobless Claims were below 300k for the 14th straight month. NAR was also out saying 2015 could be the best year in housing since 2006.  So why wouldn’t rates go up?  Well, the IMF is butting heads with Athens: stalled negotiations between Greece and its creditors caused a flight to quality in our country.

So does anyone remember the Sacramento radio station KZAP from back in the day?  Well the station (and the Cheshire Cat) are making a comeback.  I can’t believe it! Finally a station will plays Rock music from all decades! We have every other station “Genre” out there but the only Rock station is Classic Rock. KZAP was my favorite “go to” station growing up and I am glad they’re coming back. KZAP will appear at 93.3 on the FM dial as well as streaming live at k-zap.org. They will have donations, grants and underwriting instead of ads, with only three minutes of every hour earmarked for sponsor breaks. Finally a station where you can actually tune it in for extended periods without saying, ‘I just heard that an hour ago! Go KZAP!

KZAP Cheshire Cat Reduced to 5x3

Small-business sentiment improved in May. The National Federation of Independent Business small-business optimism index rose 1.4 points to 98.3, the highest level since December, as six of ten components improved. That puts the index in line with its historical average of 98, the NFIB said.

Our Federal government ran a budget deficit of $82 billion in May, the Treasury Department reported. The May deficit is $48 billion lower than the same month a year ago. The government spent $295 billion in May, which was $35 billion, or 11%, less than a year ago. Total receipts in May were $212 billion, an increase of $12 billion, or 6%, over last year. For the fiscal year to date, the budget deficit is $365 billion, a decrease of 16% from the first eight months of fiscal 2014. Again, when are they going to balance their checkbook?

Sales retailers climbed 1.2% in May and rose for the third month in a row, offering more evidence of springtime rebound in consumer spending after a winter lull.  Auto dealers and gas stations posted the strongest sales, but most major retail segments did see healthy gains.  Excluding autos, sales rose 1%. Sales minus autos and gasoline climbed 0.7%, the Commerce Department reported. What’s more, sales in April and March were stronger than initially reported.  Retail sales rose 0.2% in April instead of being unchanged. Sales in March were revised up to 1.5% from 1.1%.

Wholesale or “Producer” prices rose 0.5% in May, driven by a rise in the wholesale cost of gasoline and other fuels.   The increase in the producer price index, the largest since September 2012, was the second in three months following four straight declines.  The price of goods rose 1.3%, while services were unchanged, the Labor Department reported. Yet even with the advance in May, producer prices over the past 12 months are 1.1% lower.  Excluding the volatile categories of food, energy and trade, core prices fell 0.1%. The core rate has risen 0.6% in the last 12 months.

Consumer sentiment rose to a preliminary June reading of 94.6, rebounding from a drop for May’s final result, when the gauge hit a six-month low of 90.7, according to reports on the University of Michigan gauge released Friday.  The Economites follow readings on confidence to look for clues about consumer spending, the backbone of the economy.  For context, the consumer-sentiment gauge averaged 86.9 over the year leading up to the recession.

On the Employment front:    Job openings at workplaces rose to a record high of 5.38 million in April from 5.11 million in March, the Department of Labor reported. Compared with same period in the prior year, April’s job openings rose 22%, as private-sector openings increased 21% to 4.89 million, and government positions rose to 489,000 from 367,000.  With 8.55 million unemployed people in April, there were about 1.6 potential job seekers per opening, below March’s ratio of 1.7.  In April 2014, there were about 2.2 potential seekers per opening. When the recession began in December 2007, there were about 1.8 potential job seekers per opening. The number of separations, such as quits and layoffs, dropped to 4.88 million in April from 5.07 million in March.  Meanwhile, the total number of hires declined to 5.01 million from 5.09 million. The level of hires was about 5.04 million when the recession began.  In other words we’re pretty close to pre-recession numbers.  It just took almost eight years.

The number of people who applied for unemployment benefits rose slightly in the first week of June but remained near a 15-year low amid a sharp upsurge in hiring over the past few years.  Initial jobless claims edged up by 2,000 to 279,000 last week. Initial claims have been under the key 300,000 mark for 14 weeks in a row, a feat last accomplished 15 years ago.

Fun for the day: 

Under the age of 40? You won’t understand. Part 1 of 2

Ø  My mom used to cut chicken, chop eggs and spread butter on bread on the same cutting board with the same knife and no bleach, but we didn’t seem to get food poisoning.

Ø  Our school sandwiches were wrapped in wax paper in a brown paper bag, not in ice pack coolers, but I can’t remember getting e Coli.

Ø  Almost all of us would have rather gone swimming in the lake or at the beach instead of a pristine pool (talk about boring); no beach closures then.

Ø  We all took PE – and risked permanent injury with a pair of Dunlop sandshoes or Converse high tops instead of having cross-training athletic shoes with air cushion soles and built in light reflectors that cost as much as a small car. I can’t recall any injuries but they must have happened because they tell us how much safer we are now.

Ø  We got the cane for doing something wrong at school, they used to call it discipline yet we all grew up to accept the rules and to honor & respect those older than us.

Ø  We had 30+ kids in our class and we all learned to read and write, do math, and spell almost all the words needed to write a grammatically correct letter – imagine that!

Ø  We all said prayers in school and sang the national anthem, and staying in detention after school caught all sorts of negative attention.

Ø  We also learnt our times table by reciting them every day.  

Stay tuned next week for part 2 of 2…..

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.jpg

The Weekly Rap! Friday March 27th 2015

If you like this commentary please visit and “Like” my Facebook pageAs rates drop more prospective buyers will qualify and competition will arise for the properties for sale.  I put all of my prospective buyers through underwriting so that when they place their offer, it is as close to “cash” as you can get.  So to get your clients “underwriter approved”, please contact me and get your offer accepted!

The National Debt is currently: $18,157,222,132,587.00  is Higher by another 5 BILLION.  The interest pay-out alone on the debt is 240 Billion per year!  I post this so we will be aware of what we are leaving to our children.

Stocks edged higher this morning, putting major benchmarks on track to snap a streak of four days of losses.  The Dow last traded at 17,690 about 500 pts lower than where it was last Friday.  The S&P 500 is trading at 2,058.  Gold is trading at $1,200 an ounce, while oil futures at $49.87 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $2.87/Gal.   

The FNMA 30-year fixed 3.0% coupon (interest rates at which banks sell their loans into Fannie Mae), containing 3.25% – 3.625% mortgage rates, the benchmark or how rate sheets are priced these days is currently trading at 101.84 worse by .125% over where we were last week.  Our current trading is about 101.00 to about 102.25.  We broke above the range last Friday and traded to 102.52 but have retraced to 101.84 currently.  We were just at 103.35 on Feb 1.  Basically the 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 lower the rate.     

In economic news this week; the reader’s digest version is the economy is still trudging along.  The first quarter is showing signs of slowing as The U.S. Dollar continues to gain strength and oil remains at 25 year lows.  Earlier in the week the ECB’s (European Central Bank) commitment to flood the Eurozone with more than €1 trillion ($1.16 trillion) in newly created money, sparking a rally in stock and bond markets and sending the euro plunging.

Profits at U.S. corporations in late 2014 posted their largest drop in four years, a reflection of an economy weighed down by a strong dollar and weak global demand.  The Commerce Department’s third estimate of fourth-quarter gross domestic product (GDP) also showed that the economy slowed in the final months of 2014, putting the growth trajectory on a lower path ahead of an apparent slowdown early this year.

GDP, the broadest measure of goods and services produced across the economy, expanded at an annual rate of 2.2% in the fourth quarter.  That was unchanged from its previous estimate last month.  Corporate profits fell at a 3% pace from the third quarter. That was the largest quarterly drop in profits since the first quarter of 2011.  On a year-over-year basis, the report pegged corporate profit growth at 2.9%, slowing from 5.1% annual growth in the third quarter.  As a share of the total economy, corporate profits were just a hair below the record high of 10.5% set in 2013. The expectation is for the current quarter to remain sluggish. First-quarter GDP estimates have been trimmed earlier this week following a disappointing report on business spending and investment.

The great deflation of 2014 caused by the plunge in oil may have run its course: Consumer prices rose 0.2% in February, the first rise in four months.  Gasoline prices have rebounded in early 2015, with the cost of oil stabilizing at around $50 a barrel after selling for more than $100 last summer.  Higher costs for food, housing and new cars also contributed to the increase in consumer prices in February.  Still, there’s been zero overall inflation in the last 12 months, the offshoot of the biggest drop in gasoline prices since the Great Recession.  The annualized rate of consumer inflation had even turned negative in January for the first time since 2009. 

If food and energy are excluded, so-called “core” consumer inflation has risen at a 1.7% rate over the past 12 months.  Although the Fed uses a different index as its preferred price gauge, they view a 2% inflation as healthier for the economy. The Fed is more likely to raise interest rates if inflation starts to move steadily higher.

While Businesses are hiring at the fastest pace in 15 years, they sure aren’t investing like good times are here to stay.  Orders for long-lasting or durable goods such as cars, appliances and computers fell 1.4% in February to mark the third decline in four months. The increase in orders for January was lowered, making the decline last month look even worse. Businesses started cutting investment at the end of the summer and that contributed in part to slower growth during the last months of 2015 after a very strong third quarter.  

Companies are actually investing less now compared to a year earlier in unadjusted terms. A soft global economy and soaring dollar that’s made it harder to sell U.S. exports are among the headwinds that are constraining American businesses. The steep plunge in oil price has also curtailed investment in what was a booming domestic energy sector.

On the Real Estate front: The price of buying and renting a home are rising, squeezing consumers and dampening the housing market.  The median sales price of used homes hit $202,600 in February, up 7.5% from the year-earlier period. This is the largest increase in a year and is “unhealthy” said Lawrence Yun, chief economist of the National Association of Realtors.  While higher prices are good for homeowners, “for people who want to buy a home it is becoming more difficult,” Yun said.  Wages are only rising 2%, he noted.  Potential first time buyers on the sidelines, and renters are also being squeezed as rents are rising at a 3.5% rate, Yun noted.  Given the rise in rents, these buyers are unable to save for down payments, Yun noted.  The share of first-time home buyers rose marginally to 29% from 28% in February, well below the 40% level that the Economites say is normal.  

After falling to a nine-month low in January, overall sales of existing homes rebounded partially, rising 1.2% in February.  Existing home sales remain soft, having been stuck around the 5 million unit rate for two-and-a-half years. One reason prices are rising is that inventory remains low, Yun said.  February’s inventory was 1.89 million existing homes for sale, a 4.6-month supply at the current sales pace. This was down 0.5% from the year-earlier period.  The investor share fell to 14% from 17% also due to the higher prices, Yun said.  The all-cash share of purchases slipped to 26% from 27%.

Sales of new homes in the U.S. surged in February, and home buying in the first two months of 2015 rose to the highest level in seven years despite heavy snow and bouts of extreme cold in some parts of the nation.  The pace of new home sales climbed 7.8% last month to an annual rate of 539,000 from an upwardly revised 500,000 in January, the government reported. That’s how many new homes would be sold if the rate of sales for the whole year were the same as it was in February.  Sales were unusually strong in the Northeast, where demand had fallen off sharply in January. Sales also climbed 10% in the South, the region in which more than half of all new single-family homes are built.

On the Employment front:  The U.S. economy may have slowed sharply in the first quarter, but companies aren’t showing much concern: Layoffs remain near a 15-year low.  The number of people who filed new applications for benefits at their state unemployment offices, known as initial claims, fell by 9,000 to 282,000 last week.  New claims have tracked below 300,000 for three straight weeks after a weather-induced spike in February that pushed them to the highest level since last spring. And they are running about 9% lower now compared to one year ago.

Fun for the day: 

Part 1 of 5 of “Where to move”…for all of those who are contemplating retirement locations.

You can retire to Phoenix, Arizona where…  

1. You are willing to park 3 blocks away from your house because you found shade. 

2. You’ve experienced condensation on your rump from the hot water in the toilet bowl. 

3. You can drive for 4 hours in one direction and never leave town. 

4. You have over 100 recipes for Mexican food. 

5. You know that “dry heat” is comparable to what hits you in the face when you open your oven door. 

6. The 4 seasons are: tolerable, hot, really hot, and ARE YOU KIDDING ME?? 

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 Feb 27th 2015

The National Debt is currently: $18,138,885,132,587.00  is Higher by another 6 BILLION.  The interest pay-out alone on the debt is 268 Billion per year!  I post this so we will be aware of what we are leaving to our children.

Stocks traded slightly lower this morning, but are still on track to post their biggest monthly percentage gains since 2011.  The Nasdaq is within striking distance of hitting 5000, a level last touched nearly 15 years ago. The Dow last traded at 18,155 about the same compared with where it was last Friday.  The S&P 500 is trading at 2,105.  Gold is trading at $1,213 an ounce, while oil futures at $49.51 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $2.73/Gal.  That’s 0.62 cents higher a gallon in just 27 days!  See below.

The FNMA 30-year fixed 3.0% coupon (interest rates at which banks sell their loans into Fannie Mae), containing 3.25% – 3.625% mortgage rates, the benchmark or how rate sheets are priced these days is currently trading at 101.81 better by 0.75 over where we were last week.  Our current trading is about 101 to about 102.00.  We were just at 103.35 on Feb 1.  Basically the 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 lower the rate.     

If you like this commentary please visit and “Like” my Facebook pageAs rates drop more prospective buyers will qualify and competition will arise for the properties for sale.  I put all of my prospective buyers through underwriting so that when they place their offer it is as close to “cash” as you can get.  So to get your clients underwriter approved, please contact me and get your offer accepted!

In economic news this week; the reader’s digest version is the economy is still trudging along.  Inflationary pressures remain tame, with spring bringing a boost to the real estate market. 

The thieves are at it again!  Gasoline is 0.62 cents higher per gallon over a 27 day period while oil prices have risen just $2.20 in the same period. The seasonal lift in gasoline prices remains well underway across the country, with the West Coast seeing the most excruciating rate of price increases. 

Here are a few of the “excuses” I’m hearing regarding the dramatic rise.  An explosion at an Exxon Mobil oil refinery in Torrance last week, California companies begin scaling back production to convert to the mandated and more expensive summer blend of fuel, California’s carbon-emissions mandate for transportation fuels has added more than a dime in costs to a gallon, and demand is starting to rise with fuel consumption reaching its highest levels since Obama entered the White House in 2008. The summerlike weather California and parts of the West have enjoyed this winter also puts more people on the road, burning more gas. So basically it’s because they can!

According to the Chicago Fed’s national activity index, the economy resumed above-trend growth in January.   The indicator, a weighted index of 85 different economic reports, rose to positive 0.13 in January from negative 0.07 in December. The three-month moving average meanwhile slowed to 0.33 in January from 0.34 in December.

Consumers expressed less confidence in the economy in February, worrying a bit more about the availability of jobs and outlook for business in the months ahead.  The consumer confidence index fell to 96.4 this month from 103.8 in January, the nonprofit Conference Board reported.  The index topped the 100 mark in January for the first time since an economic recovery began in mid-2009, setting a seven-and-a-half-year high in the process. Consumer confidence has been climbing in fits and starts since the end of 2011, helped by a sharp pickup in hiring and, more recently, a plunge in gasoline prices.

Consumer prices fell again in January and inflation turned negative compared to 12 months ago, a reversal fueled by sharply lower oil prices that’s offered financial relief to workers and households.  The consumer price index dropped 0.7% last month, marking the third decline in a row, the Labor Department reported. Over the past year prices have actually declined by 0.1%, the first time consumer inflation has been negative since the fall of 2009.  

Energy prices dropped 9.7%, as the cost of most fuels including gas decreased.  Food prices were unchanged. Excluding food and energy, so-called “core” consumer prices rose 0.2% in January. Core prices are also up 1.6% in the past year, mainly reflecting rising prices for housing, the single biggest expense for consumers. Real hourly wages, meanwhile, rose 1.2% in January, a combination of higher pay and lower inflation. Real hourly wages have climbed 2.4% in the past 12 months.

Orders for durable goods rose 2.8% in January.  Orders minus transportation edged up 0.3%, the Commerce Department reported. Orders for core capital goods – a proxy for business investment – rose 0.6%. Shipments of core capital goods, a category used to help determine quarterly economic growth, fell 0.3% in January. Orders for all durable goods fell 3.7% in December, newly revised data show.

Federal Reserve Chairwoman Janet Yellen on Tuesday took another step closer to the first rate hike since 2006.  In testimony to the Senate, Yellen signaled to financial markets the Fed would soon drop the word “patient” from its forward guidance.  She softened the blow with several dovish comments that suggest no hurry about actually moving.  Markets have expected that when the Fed dropped “patient” from its policy statement that it would mean that a rate hike would follow in the next couple of meetings. That interpretation came from signals Yellen sent in December.

Now, however, Yellen stressed that the Fed wasn’t on automatic pilot and only wanted the flexibility to move “on a meeting-by-meeting basis.”  Several analysts said a June rate hike remains on the table if the Fed decides to drop the word “patient” from its policy statement on March 17-18. Yellen’s summation of the current economic environment suggests she is in no hurry to raise rates. “Too many Americans remain unemployed or underemployed, wage growth is still sluggish, and inflation remains well below our longer-run objective,” despite the falling unemployment rate, she said.

On the Real Estate front:  Existing-home sales in January fell 4.9% in January, a larger than forecast decline, the National Association of Realtors reported.  In our local El Dorado County area existing sales were down by 43% from Dec to Jan.  Lawrence Yun, chief economist for the NAR, attributed the decline to a lack of housing supply and rising prices at the end of last year.  The median existing-home price was $199,600, which is 6.2% above January 2014 levels. Inventory edged up 0.5% to 1.87 million homes, or a 4.7 month supply at the current sales price. 

Other factoids from the January report:

• All-cash sales were 27% of all transactions, up from 26% in December but down from 33% in January 2014.

• Distressed sales were 11% of all sales, unchanged from December.

• Properties typically stayed on the market slightly longer in January (69 days) than December (66 days) and a year ago (67 days).

• The share of first-time buyers declined to 28% in January, the lowest since June.

Sales of “new” homes avoided a winter dip in January, with prospects growing for a surge in demand as spring approaches.  New homes sold at annual rate of 481,000 last month, essentially unchanged from December, the Commerce Department reported.  Sales were 5.3% higher in January compared to a year earlier, another signal the housing market is continuing its long, slow recovery from its worst bust ever.  One worrisome sign: The median price for a new home was up 9% from a year ago, and a steady rise in prices could act as a potential drag on sales.  Mortgage rates, on the other hand, have fallen back near record lows (October 2012) and lenders appear to have loosened very strict requirements on how to qualify for a loan. That could make it easier for buyers to get a mortgage and afford a home.

The housing market seems to be getting off to a great start in 2015 though with “Pending” home sales rising in January to the highest level since Aug. 2013, the National Association of Realtors reported. Its pending home sales index rose 1.7% from an upwardly revised December level, and sales were up 8.4% from Jan. 2014 levels.  In our local El Dorado County area pending sales were higher by 65% from Dec to Jan. The NAR forecasts a 6.4% gain in existing home sales this year and a nearly 5% rise in median prices.

On the Employment front: The number of people who applied for U.S. unemployment benefits jumped by 31,000 to 313,000 in the seven days from Feb. 15 to Feb. 21, continuing a recent pattern of sharp up-and-down movements.

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 Feb 13th 2015

Friday the 13th comes three times this year, and this is one of them.

The National Debt is currently: $18,120,885,132,587.00  is Higher by another 12 BILLION.  The interest pay-out alone on the debt is 268 Billion per year!  I post this so we will be aware of what we are leaving to our children.

Stocks are retreating after earlier reaching above 18,000 for the first time in 2015.  The Dow last traded at 17,932 about 150 pts higher than where it was last Friday.  The S&P 500 is trading at 2,090.  Gold is trading at $1,228 an ounce, while oil futures at $52.60 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $2.39/Gal. 

The FNMA 30-year fixed 3.0% coupon (interest rates at which banks sell their loans into Fannie Mae), containing 3.25% – 3.625% mortgage rates, the benchmark or how rate sheets are priced these days is currently trading at 101.84 worse by 0.50 over where we were last week.  Our recent trading was 102.25 to about 103.50 and we’ve broken through the low end (Support) of it meaning higher rates.  Basically the 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 lower the rate.     

If you like this commentary please visit and “Like” my Facebook page.  With FHA reducing the monthly mortgage insurance rate from 1.35% down to 0.85% and a rate of 3.25% for a 30yr fixed mortgage, even those with low credit scores and foreclosures, bankruptcies, and short sales can qualify.  As rates drop more prospective buyers will qualify and competition will arise for the properties for sale.  I put all of my prospective buyers through underwriting so that when they place their offer it is as close to “cash” as you can get.  So to get your clients underwriter approved, please contact me and get your offer accepted!

In economic news this week; the reader’s digest version is the economy is gaining strength but at a moderate pace with small business sentiment slipping a bit, Retail Sales pulling back a bit, and inflation correcting higher.  Improvement in the jobs market continues but at a slower pace than last month.

Small-business sentiment slipped 2.5 points in January with seven out of 10 components declining on a decline in optimism over sales growth and business conditions, according to the National Federation of Independent Business’s small-business optimism index.  He report said January’s decline was mostly due to owners being less optimistic about sales growth and business conditions, not spending and hiring plans.  Ahead of the Labor Department’s job-openings data, the index measuring whether job openings were hard to fill rose 1 percentage point to 26%.

The Federal government ran a budget deficit of $18 billion in January, the Treasury Department reported. The monthly deficit compares to the $10 billion shortfall the government ran in January 2014, and brings the deficit for the fiscal year to date to $194 billion.  

Retail sales fell in January for the second month in a row as consumers appeared to pocket most of the savings from sharply lower gasoline prices.  Retail sales declined by 0.8% last month after a 0.9% drop in December. The slow start to sales this year suggests the economy is likely to grow more slowly in the first quarter after a 2.6% gain in the final three months of 2014.

Inflation expectations rebounded in February, which the Fed may view as a positive development given fears surrounding deflation after the slide in oil prices.  The University of Michigan’s consumer sentiment poll put one-year inflation expectations at 2.8% in February after falling to 2.5% in January.  Consumer prices have fallen sharply as gasoline prices have tanked. The Cleveland Fed’s “nowcast” expects a monthly drop of 0.7% for January, after the Labor Department reported a 0.4% decline for December.  Consumer sentiment slipped in February to a three-month low of 93.6 from 98.1 in January, which had been an 11-year peak.

Consumer sentiment 2-13-15                                Job openings since 2001

On the Employment front: Improvement in the jobs market continued in January, but at a slower pace falling to 4.9 from 7.3 in December, according to the Fed’s labor market conditions index which weighs 19 different economic indicators.  This is the lowest reading since September. The Fed doesn’t offer commentary on monthly moves in the series. In a separate reading, the Conference Board said its employment trend index basically remained the same at 127.9 in January, up from 127.2 in December, a 7.6% gain from the same month one year ago.  

Job openings in rose in December to the highest amount since 2001 and the pace of hiring returned to prerecession levels, but companies are still taking their time before adding new workers.  Job openings in the final month of the year rose 3.7% from November to 5.03 million, the Labor Department reported. New job postings surged 28.5% for all of last year, as faster economic growth spurred companies to add workers to keep up with rising demand for their goods and services.  At the same time, the number of people hired climbed 1.9% in December to 5.05 million, according to the report, known as the Job Openings and Labor Turnover report.  The last time that many people found jobs was just a few months before the Great Recession started in December 2007.

Fun for the day:  In honor of Valentine’s Day

Love is Blind?

Phil, a smart and handsome young man, dressed in the latest fashion, walked into this local pub. He noticed a woman gazing at him without blinking her big eyes. Phil felt flattered so he walked up to the woman and said in his deepest voice, ‘I’ll do anything you wish, beautiful lady, for just $10 but on one condition.’

The woman appeared to be trapped in the moment and asked as if in a trance, ‘What’s your condition?’

Phil answered, ‘Tell me your wish in just three words.’

There was a long pause, the woman opened her purse, counted out the money and handed it to the man along with her address.  She then looked deeply into his eyes and whispered, ‘Clean my house.’

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 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