The Weekly Rap! Friday April 11th, 2014

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

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

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

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 104.65 about .50 belter than where we were last Friday at this time. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. The higher the number (price), the better the rate.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sincerely,

Bill Bartok

Mortgage Advisor MLO# 445991

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

Thank you!

The Weekly Rap! Friday April 4th, 2014

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

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

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 104.15 about .15 better than where we were last Friday at this time. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. The higher the number (price), the better the rate.

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

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

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

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

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

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

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

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

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

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

Unemployed rate still elevated Hiring remains depressed

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

Sincerely,

 

Bill Bartok

Mortgage Advisor MLO# 445991

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

Thank you!

The Weekly Rap! Friday March 28th, 2014

The National Debt is currently: $17,546,412,702,957.00 is higher by about 20 BILLION. I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,285 about 50 pts. lower than where it was last Friday. The S&P 500 is trading at 1,853. Gold is trading at $1,294 an ounce, while oil futures at $101.77 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.70/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 104.00 about .375 worse than where we were last Friday at this time. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. The higher the number (price), the better the rate.

In economic news this week; The reader’s digest version is the economy continues to limp along at a snails pace with Most of the upward movement due to higher healthcare costs as consumers now have to pay their own health insurance due to the new “Affordable” health care law known as Obama Care..

The economy’s growth in the final three months of 2013 was bumped up to a 2.6% annual pace from 2.4%, but the increase stemmed mainly from higher spending on health care and little else. The solid pace of growth in the waning months of 2013, following a 4.1% advance in the third quarter, showed an economy that entered the new year with fresh momentum but still not fully healed more than four years after the end of the Great Recession. And some of that momentum was lost in the first quarter owing to a brutally harsh winter that disrupted business operations across large stretches of the U.S. and kept consumers indoors.

Higher health-care expenditures accounted for nearly three-fourths of the revised increase in consumer spending in the last three months of 2013. Bigger electricity bills also contributed. While most expect growth to accelerate later this year, the first quarter is shaping up to disappoint. The expectation is for gross domestic product to taper off to 1.6%. GDP reflects the total value of all goods and services produced by the economy. The U.S. has expanded at an average pace of 3.3% since 1929, but growth has slowed to a 2.3% rate in the first four full years since the Great Recession ended. Oh by the way, the stock market has more than doubled in value in the last 4 years.

The national activity index, a gauge of economic activity, swung back to positive territory in February. The index rose to 0.14 from negative 0.45 in January, while the three-month moving average fell to negative 0.18 from positive 0.02. The index is a weighted average of 85 different economic indicators, designed so that readings of zero indicate trend growth. When the three-month average value moves below -0.70 following a period of economic expansion, there is an increasing likelihood that a recession has begun.

The purchasing managers index or, PMI, for the U.S. fell to 55.5 in March from 57.1 in February, but still showed improving conditions for manufacturers. Readings over 50 indicate growth. In March, output was barely changed at 57.5. New orders dipped to 58.0 from 59.6 and employment fell to 53.9 from 54.1. The slight drop-off in the March PMI comes after the index rose in February to the highest level in almost four years, helped by manufacturers catching up after winter-related softness in January.

A gauge of consumer confidence rose to 82.3 in March from an upwardly revised 78.3 in February, the Conference Board reported. The expectations index rose to 83.5 in March from 76.5 in February, while a barometer for the present situation declined to 80.4 from 81. Apparently while consumers were moderately more upbeat about future job prospects and the overall economy, they were less optimistic about income growth. The expectation is that the economy will continue improving and believe it may even pick up a little steam in the months ahead.

According to a report from the University of Michigan and Thomson Reuters, consumer sentiment declined to a final March reading of 80, the lowest level since November, from a final February level of 81.6. Sentiment levels are watched to get a feeling for the direction of consumer spending.

Consumer spending rose 0.3% in February at the fastest rate since November as Americans spent more on health care and utilities, but purchases of durable goods fell for the third straight month in a negative sign. Partly offsetting the gain, however, was a reduction in rate of spending in January. Spending increased at a 0.2% clip in the first month of the year instead of 0.4% as previously reported. Personal income also rose 0.3% in February.

The savings rate edged up to a four-month high of 4.3% from 4.2% in January. Inflation-adjusted disposable income, meanwhile, jumped 0.3% to mark the biggest advance in five months. Also, inflation as gauged by the core PCE price index posted a slight 0.1% increase in February, and it’s up just 1.1% over the past 12 months. The overall PCE index also rose 0.1% last month and its climbed 0.9% in the past year, offering further evidence that inflation remains muted.

On the Real Estate front: Home prices ticked down 0.1% in January for a third straight month after a particularly harsh winter, according to S&P/Case-Shiller’s 20-city composite index, as strong year-over-year appreciation showed signs of moderating. Including January, prices remained about 20% below a 2006 peak. Price gains over the past year should encourage more sellers to place their homes on the market, thereby raising inventory and cutting upward pressure on prices.

There’s concern about recent weakness in housing-market data. Unusually poor weather may have also a played a role in the drop in home sales, but it’s unclear how much of recent weakness is due to a particularly harsh winter or limping demand. If the weakness is weather related, housing projects and purchases that were delayed could show up in coming months.

New homes sales were down 3.3% from January’s one-year high, the government said Tuesday. New home sales are 1.1% lower compared to one year ago, reflecting weaker demand because of higher mortgage rates and home prices as well as a bitterly cold winter.

Slumping for an eighth month, a gauge of pending home sales fell 0.8% in February to the lowest level in more than two years, signaling that upcoming activity may slow, the National Association of Realtors reported. The index of pending home sales hit 93.9 in February – the lowest reading since October 2011 compared with 94.7 in January. Low inventory, declining affordability and poor weather have hit the housing market in recent months. Pending sales typically close within two months. An index reading of 100 equals 2001′s average contract activity level.

On the Employment front: Applications for unemployment benefits fell last week to the lowest level in four months, indicating that layoffs have slowed and perhaps a hint that hiring is about to pick up. Initial jobless claims are a gauge of whether layoffs are rising or falling and changes in the number of people seeking benefits tend to correlate over time with how many jobs the economy is producing.

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 March 21st, 2014

The National Debt is currently: $17,526,993,132,952.00  is higher by about 23 BILLION. That’s 50 Billion increase in just 2 weeks.  I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,341 about 275 pts. higher than where it was last Friday.  The S&P 500 is trading at 1,870.  Gold is trading at $1,335 an ounce, while oil futures at $99.48 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.65/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 104.38 about .60 worse than where we were last Friday at this time.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.

In economic news this week; The reader’s digest version is the economy continues to limp along at a snails pace with manufacturing and Industrial production showing signs of improvement.  Inflation is still in check and the new Fed Chairwoman commits a major faux pas in tilling the market what she really thinks.

An index of manufacturing conditions in the New York region showed modest improvement in March after a sharp drop in the prior month.  The Empire State’s general conditions index rose to 5.6 in March from 4.5 in February. The index had fallen by 8 points in February, a drop attributed to severe winter weather.  The Empire State index is often the first of several regional manufacturing gauges to be released. They can frequently be volatile from month to month, but taken together they present one of the timeliest reads on a critically cyclical sector.

Industrial production climbed 0.6% in February, the Fed reported earlier this week, the fastest monthly growth rate since August as output recovered after the unusually rough weather to start the year.

Consumer prices rose slightly, 0.1%, in February mostly because of higher food and housing costs, but overall inflation remained quiet.  The price of food jumped 0.4%, the largest gain since September 2011, because of higher costs of meat, poultry, fish, dairy and vegetables.  Yet while food prices have only risen 1.4% over the past year, they are likely to increase in the coming months because of the drought we’re experiencing here in California and unusually cold weather in other parts of the country.  By some estimates, food prices at grocery stores could rise 3% or more in 2014 and give a sharp pinch to consumers.

Excluding food and energy, so-called core consumer prices also rose 0.1% in February.  Housing costs, the biggest expense for most consumers, advanced 0.2%.  Prices also rose for medical care and airline tickets.  The core rate is viewed by the Fed Gods as a more useful gauge of underlying inflationary trends.  Over the past 12 months, the core rate of inflation has risen just 1.6%, well below the Fed’s limit for inflation.

The Federal Reserve met on Wednesday and scaled back its bond-buying stimulus strategy again and tried new ways to signal to markets that it will keep short-term interest rates low for a long time, but the Fed Gods also rattled financial markets by suggesting in a few ways that rates could rise a bit earlier and faster than investors had expected.  Although the new approach still means the first rate hike since 2006 won’t take place until next year.  For the text of the FOMC decision click on the link.  For a great synopsis of the Feds actions and guidance since December 2008, click here.

At its meeting, the Fed dropped its 6.5% unemployment-rate target for the first rate hike and said it would look at a “wide range” of factors, including inflation levels and job creation, before charting out a new path.  They basically took out any numerical thresholds and are going to look at everything.

Following the Feds meeting Yellen spoke for an hour and the market heard but three words; “around six months.”  One glitch that got people talking was when Yellen was a little too specific: Answering a question about how long the Fed might wait to raise interest rates after the Fed stopped its post-financial crisis policy of buying bonds to hold rates down, she committed the ultimate Washington gaffe — she said what she apparently meant. “About six months,” she said… and the Markets immediately sold off.  Before this Fed meeting, the market had been expecting the first rate hike to come toward the end of 2015, perhaps in October or December. Now we’ve heard from the Fed chair that the first hike could, (emphasize could), come two or three meetings before that.  Anyone remember Alan Greenspan?

On the Real Estate front:  The National Association of Home Builders/Wells Fargo housing-market index, a gauge of confidence among home builders, rose one point to 47 in March, but remains close to the lowest level since May and signals that builders, generally, are pessimistic about sales trends. rose this month.  March is the second consecutive month that the index has been below a key reading of 50 (readings under 50 signal that builders, generally, are pessimistic). The builder-confidence gauge hit a recent peak of 58 in August, which was the highest level since 2005.

Construction on new homes fell slightly in February, but in a sign that work will pick up as the weather warms, builders filed more permits to start new projects such as multi-unit condominiums and apartment buildings.  Permits reflect how many new homes companies plan to build in the near future. The rise in permits signals that builders plan to ramp up construction as warm weather arrives. Single-family homes account for about three-quarters of the housing market. Many prospective buyers are opting for previously owned homes, however, which tend to be less expensive than new properties. But even sales of existing homes have fallen sharply over the past six months.

Sales of existing homes were down 0.4% in February, the National Association of Realtors reported. Sales rates have trended down since the summer as rising mortgage rates and home prices cut affordability. Constrained inventory and unusually poor weather may have also played a role in weak buying, the trade group said.  First-time buyers have had a particularly tough time in this housing market, making up just 28% of existing-home sales last month, compared with a long-term average of 40%.  Locally there have been 156 new listings in the El Dorado Hills/Placerville area in the last 30 days.

On the Employment front:  Applications for unemployment benefits rose in the second week of March, but remain near the lowest level since the end of the recession almost five years ago.  Initial jobless claims climbed by 5,000 to a seasonally adjusted 320,000 in the period of March 9 to March 15.  The number of people seeking benefits each week is seen as a good gauge of how many layoffs are occurring in the economy. The latest claims report took place during the survey week used by Labor to calculate monthly employment growth for March, suggesting that job creation could end higher compared to the first two months of the year. A lower claims figure typically correlates with higher monthly job growth.

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 March 14th, 2014

Congratulations to all the High Achiever Real Estate Agents in El Dorado County presented with recognition of their hard work today at our annual luncheon where we raised money for local high school students to further their college education through scholarships.  Thank you to all to contributed.  We broke records this year!

The National Debt is currently: $17,503,721,572,952.00  is higher by about 28 BILLION. That’s 121 Billion increase in just 2 weeks.  I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,065 about 380 pts lower than where it was last Friday.  The S&P 500 is trading at 1,841.  Gold is trading at $1,381 an ounce, while oil futures at $99.00 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.52/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 104.38 about .25 better than where we were last Friday at this time.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.

In economic news this week; The reader’s digest version is the economy continues to limp along an a snails pace

Small-business sentiment slumped in February, on concerns over sales, the economy and employment driving the downturn, according to the National Federation of Independent Business which reported its small-business index dropped 2.7 points to 91.4.  The worst component of the report was earnings trends, with a net negative 27% reading, while the best was plans to make capital outlays or spending, with a net positive 25% reading.  The index hasn’t been over 100 since 2006.

Sales at U.S. retailers rose in February for the first time in three months as shoppers boosted purchases of a variety of goods after being cooped up by one of the harshest winters in years.  Retail sales rose 0.3% last month, the Commerce Department reported. Unless sales rebound sharply in March, retail spending in the first quarter of 2014 could end up lower than in the final three months of 2013 and weigh on growth. The economy is on track to expand by 1.7% in the first quarter vs. 2.4% in the fourth quarter.

A gauge of consumer sentiment declined in March to hit the lowest level in four months, cut by weaker expectations for the economy, according to a Friday report.  The gauge from the University of Michigan and Thomson Reuters fell to 79.9 this month from a final February level of 81.6.

Wholesale prices, the producer price index or PPI, fell 0.1% in February to mark the first decline in three months.  Declines in clothing-store margins and gasoline largely accounted for the drop in overall wholesale prices. The price of wholesale goods rose by 0.4% in February while services retreated by 0.3%.  Excluding the volatile categories of food, energy and trade, so-called “core” wholesale prices rose 0.1% for the second straight month.  Personal consumption, a new gauge that could foreshadow changes in the consumer price index, decreased 0.2% in February. Over the past year PPI has risen 0.9%, down from 1.2% in January, in another sign of slacking inflationary pressure in the economy.

The federal budget deficit narrowed a bit in February, the Treasury Department reported, shrinking 5% from a year earlier as receipts jumped and spending only modestly rose.  The shortfall was $194 billion for February, versus the $204 billion recorded in the same month a year ago. The gap narrowed mostly thanks to higher intake of receipts including individual and corporate taxes, as well as higher Federal Reserve earnings (well the Fed holds over 4+ Trillion Dollars’ worth of securities).   Total receipts were up 18% compared to February 2013. The fiscal 2013 shortfall is the first deficit of below $1 trillion of President Barack Obama’s tenure.

On the Real Estate front:  According to the White House’s 2014 economic report that was released Monday, a gauge of mortgage-credit availability rose slightly last month, and has been heading higher for two years.  The trend could support the housing market’s recovery.  Stronger housing demand depends critically on the easing of credit standards (that might have been over-tightened following the financial crisis), particularly for first-time homebuyers.  Healthy jobs growth is also key for more home sales.  But if borrowers can’t get a loan, that’s going to hold back the market’s rebound.

On the Employment front:  Job openings rose to 3.97 million in January from 3.91 million in December.  Compared with same period last year, January’s job openings rose 8%, as private-sector openings increased 10% to 3.61 million, and government positions fell to 369,000 from 421,000.  With 10.24 million unemployed people in January, there were about 2.6 potential job seekers per opening, matching December’s ratio. In January 2013, there were 12.32 million unemployed people — about 3.3 potential seekers per opening. When the recession began in December 2007, there were less than two potential job seekers per opening.  The level of hires was almost 5 million when the recession began.

In a bit of good news, the number of people who applied for unemployment benefits in the first week of March fell to the lowest level in more than three months, perhaps a sign of an uptick in labor-market conditions?   The average of new claims over the past month, a more reliable gauge than the volatile weekly number, also sank to a three-month low. The four-week average declined by 6,250 to 330,500.

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 March 7th, 2014

Don’t forget to “Spring Forward” and set your clocks back 1 hour Saturday night.  This is the part of daylight savings time I have a love/hate relationship with.  I love that is stays lighter later, but I hate that I have to lose an hour to get it.

The National Debt is currently: $17,425,075,475,245.00  is higher by about 43 BILLION. That’s 134 Billion increase in just 2 weeks.  I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,425 about 100 pts higher than where it was last Friday.  The S&P 500 is trading at 1,873.  Gold is trading at $1,338 an ounce, while oil futures at $102.79 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.52/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, last traded at 2.79%.  30-year Treasury Bond yields last traded at 3.72%.  Rates on 30-year fixed-rate mortgages are about 4.625% this week. MBS yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. Rising yields mean higher consumer-mortgage rates.

The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 104.12 about .65 worse than where we were last Friday at this time.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.

In economic news this week; the big news of the week was that the U.S. generated 175,000 jobs in February and the unemployment rate edged up to 6.7%.  The reader’s digest version is economic growth is just limping along, that is not really growing and not really falling.

Have you ever noticed that we are creatures of habit?  We basically believe that any trend we are in will continue on.  We for some reason cannot see that the trend will eventually change, that winter will become spring, that the stock market will not continue to go up (anyone remember the late 1990’s?) or that real estate values do not go up forever in a straight line.  Eventually we will come out of the stagnant growth phase we are in.  What it will take, I don’t really know, but when we get excited about just 175 new jobs growth something tells me we are stuck in a trend.

Consumers boosted spending in January, but most of the increase went to pay for medical care and higher utility bills during an unusually cold winter.  The advent of the Affordable Care Act, commonly known as Obamacare, triggered a flush of spending in the first month after the law took effect. Health-care spending jumped 1.6% in January.

On a positive note:  The final reading of U.S. purchasing managers’ index accelerated to 57.1 in February. The index was well above the 53.7 reading in January.  Readings over 50 indicate growth. The final reading for February was the highest level in almost four years. The report shows that output and new business picked up sharply. Volumes of new work increased at the sharpest rate since April 2010.

The productivity of U.S. workers and businesses slowed sharply in the final three months of 2013, according to newly revised government figures.

Productivity rose a revised 1.8% from October through December, down from an original estimate of 3.2%. By contrast, productivity rose 3.5% in the third quarter.  Productivity is a good barometer of a nation’s well-being. Companies earn higher profits when productivity rises and they can afford to pay more to workers, especially if they need to hire to keep up with demand. The wealthiest countries have the most productive workers.  Yet productivity has risen slowly over the past few years in the aftermath of the Great Recession and there’s little evidence that it’s about to sharply increase.

In the Fed’s “Beige Book” report, economic conditions in January and early February were difficult to discern due to severe cold temperatures and a series of storms that left much of the country trapped under snow and ice.  In sector after sector and region after region, the weather played havoc on conditions, the report said. There were 119 separate mentions of the word “weather” in the Beige Book. Fed Chairwoman Janet Yellen said it might be “months” before the Fed gets a good reading of economic conditions. The Beige Book is a collection of anecdotes on the economy used to help the Federal Reserve prepare for its next interest rate setting meeting.

The net worth of American households grew last year by $9.8 trillion, or 14%, according to the Federal Reserve.  That includes a nearly $3 trillion jump in the fourth quarter alone.  Most of the gains in net worth, $5.6 trillion, came through the stock market, as the S&P 500 climbed nearly 30%, and $2.3 trillion came in the value of real estate as home prices rose.

On the Real Estate front:  Home prices according to CoreLogic, including distressed sales, increased by 12.0 percent in January 2014 compared to December 2013.  January marks the 23nd consecutive month of year-over-year home price gains.  Excluding distressed sales, home prices were up 9.8 percent year over year in January 2014.  Despite gains in December, home prices nationwide remain 17.3 percent below their peak, which was set in April 2006.  Including distressed sales, five states registering the largest year-over-year home price appreciation in January and California was in the group at +20.3% (16% excluding distressed sales.  The CoreLogic Pending HPI is an exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes for the most recent month.

On the Employment front:  The U.S. generated 175,000 jobs in February despite harsh winter weather, suggesting the economy has not slowed as much as a recent spate of indicators appear to show.  The unemployment rate, meanwhile, edged up to 6.7% from 6.6% to mark the first increase in 14 months. Yet the rate rose because more people entered the labor force in search of jobs, which is usually a sign that they think more work is available.  The better-than-expected headline number on jobs paves the way for the Federal Reserve to continue to withdraw stimulus from the economy.

The real truth is that even at 175,000 jobs growth is more of a break-even number.  We need to see double or triple this number to see real economic growth.  So be careful what you get excited about.  The pace of hiring is a lot softer compared to last fall. The economy has added an average of 131,000 jobs in the past three months, compared to an average of 225,000 from September through November. And the number of people who have been out of work at least six months rose by the largest amount in almost two years.  It may take another month or two to get a better read on the economy’s health because of unusually cold and snowy weather in the early part of 2014.

Monthly_Job_Growth_3-2014

The number of people who applied last week for unemployment benefits fell to the lowest level since the end of November, but the level of initial claims appears to have been distorted by harsh winter weather.

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 28th, 2014

My apologies for the lateness of this report, I was in Reno at a company event the last couple days and just got back today.

The National Debt is currently: $17,382,872,856,284.00  is higher by about 91 BILLION.  I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,321 about 300 pts higher than where it was last Friday.  The S&P 500 is trading at 1,859.  Gold is trading at $1,328 an ounce, while oil futures at $102.76 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.43/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, last traded at 2.64%.  30-year Treasury Bond yields last traded at 3.58%.  Rates on 30-year fixed-rate mortgages are about 4.50% this week. MBS yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. Rising yields mean higher consumer-mortgage rates.

The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 104.78 about .75 better than where we were last Friday at this time.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.

In economic news this week; If you’re looking for some good economic news today, then you’ve come to the wrong blog.  I really wish I had better news to report but it’s just more of the same anemic stagnant growth in our economy.  The reader’s digest version is economic growth is not as rosy as originally thought and things are getting worse.

The government chopped its estimate of U.S. growth in the waning months of 2013 today, calling into question whether the economy is primed to accelerate in 2014 after years of a sluggish expansion.  The total value of all goods and services produced by the economy, known as gross domestic product (GDP), rose 2.4 % in the fourth quarter.  Initially the Commerce Department had reported the U.S. grew 3.2%. The reduced growth estimate suggests the U.S. did not enter the new year with as much momentum as previously believed.

The report also casts doubt on whether the U.S. is ready to grow in 2014 at its fastest rate since the recession ended, as many private economists and the Federal Reserve believe.  The first quarter has gotten off to a poor start, a problem partly but not entirely explained by unusually harsh winter weather.

According to a gauge of the national economy from the Federal Reserve Bank of Chicago released Monday, an underperforming U.S. economy got worse in January, hit by production-related weakness.  Activity in January posted below-average growth for a second month, hitting negative 0.39, the lowest result in six months. The gauge takes 85 economic indicators into account, covering areas such as production, jobs and consumer spending. Negative values signal a below-average rate of economic growth, a zero reading means that the economy is growing at its historical trend rate, and positive values signal faster-than-average growth.

On the Real Estate front:  A gauge of “pending” home sales rose slightly at 0.1% in January, but remains near a two-year low, signaling that upcoming activity may be slow, the National Association of Realtors reported. The index of pending home sales was 95 in January, compared with 94.9 in December, which was the lowest reading since November 2011. Low inventory, declining affordability and poor weather are hitting results, NAR said. By region, the gauge of pending home sales in January fell 4.8% here in the West. Pending sales typically close within two months. An index reading of 100 equals 2001′s average contract activity level.

Sales of “new” single-family homes started 2014 with surprising strength, with January posting the fastest pace in more than five years.  Home sales jumped 9.6% in January to a seasonally adjusted annual rate of 468,000, hitting the highest level since July 2008. On Wednesday, the government upwardly revised December’s pace to 427,000.

The pace of home-price growth slowed down at the end of 2013, but despite this the year saw the fastest calendar-year price growth in eight years.  U.S. home prices ticked down 0.1% in December, declining for a second month, with 11 of 20 tracked cities posting drops, according to S&P/Case-Shiller’s composite index. After adjustments, home prices in December rose 0.8%, down a bit from 0.9% in November. On a year-over-year basis, home prices rose 13.4% in December, the fastest calendar-year growth since 2005, supported by a low inventory of homes available for sale. However, December’s year-over-year growth is down from a recent peak of 13.7% reached in November.

On the Employment front:  The number of people applying for unemployment benefits rose 14,000 last week to match the highest level of 2014, suggesting that progress in a gradually recovering U.S. labor market has slackened off.

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 14th, 2014

Happy Valentine’s Day to all you star-crossed lovers out there and to those of you who may not have a Valentine to celebrate with, here’s hoping you find yours.

The National Debt is currently: $17,291,805,201,598.00  this is actually lower by about 34 BILLION.  I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,115 400 pts higher than where it was last Friday.  The S&P 500 is trading at 1,835.  Gold is trading at $1,319 an ounce, while oil futures at $100.24 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.23/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, last traded at 2.72%.  30-year Treasury Bond yields last traded at 3.69%.  Rates on 30-year fixed-rate mortgages are about 4.50% this week. MBS yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. Rising yields mean higher consumer-mortgage rates.

The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 104.22 about .75 worse than where we were last Friday at this time.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.

In economic news this week; the reader’s digest version is it looks like the economy is taking a breather tin the first part of the new year with retail sales falling and employment slowing.  We have a new Fed Chief Janet Yellen and she spoke out this week for the first time since taking over.

A gauge of optimism among small businesses rose slightly to 94.1 in January, led by sales expectations and hiring plans. Among the 10 components of the National Federation of Independent Business’s gauge, three rose last month, five fell and two were unchanged. The index remained lower than an average reading of 100 before the recession.

New Federal Reserve Chairwoman Janet Yellen said Tuesday that markets should expect the central bank to continue to follow the low-interest-rate path laid out by her predecessor Ben Bernanke. “Let me emphasize that I expect a great deal of continuity in the Federal Open Market Committee’s approach to monetary policy,” Yellen said in remarks prepared for a hearing of the House Financial Services Committee. “I served on the Federal Open Market Committee as we formulated our current policy strategy and I strongly support that strategy,” Yellen said.

Yellen’s remarks closely tracked the language of the Fed’s last policy statement. She said that the central bank would taper the pace of its asset purchases at future meetings if the economy continued to improve as expected, although the pullback was not on a preset course. The Fed’s decisions about the pace of tapering are data dependent, she added.  She added the Fed plans to hold short-term interest rates at zero “well past” the time the jobless rate falls below 6.5%. Her first semi-annual monetary policy testimony was about as bland as one could imagine. But then that’s no doubt by design, as she has no reason to say anything that would upset the current market consensus.

The government posted a budget deficit of $10 billion in January, the Treasury Department reported, as spending outpaced revenue in the month.  Including the January deficit, however, the government’s red ink at least continues to contract from the year-ago period.  For the first four months of the current fiscal year, the deficit has fallen 37%, ($184 billion, which is $107 billion lower than the same period a year ago) reflecting the economy’s continued improvement, rising tax revenue and modestly lower spending.   What scares me is how long if ever it will take to stop spending more than we bring in in revenue.

Retail Sales fell 0.4% in January and the final two months of 2013 turned out weaker than initially reported, offering more evidence the economy may have softened toward the end of the year.  What’s more, an originally reported increase in sales in December was wiped out to show a small decline.  The increase in sales in November was also trimmed a notch.  Consumers are the main source of economic growth and retail sales account for a large slice of their spending. The drop in sales in January and December suggests consumers still aren’t willing to splurge, a potentially worrisome sign for businesses and the broader economy.

Consumer sentiment was unchanged in February, with a preliminary reading of 81.2, which matched January’s final level, according to today’s report from the University of Michigan and Thomson Reuters.  Details of the consumer-sentiment report show that a gauge of “expectations” increased to 73 in February from 71.2 in January. Meanwhile, the gauge of “current economic conditions” fell to 94 from 96.8.  Sentiment levels are watched to get a feeling for the direction of consumer spending, which is the backbone of the economy.

On the Real Estate front:  I know this is a repeat of last week but some bay not have seen the recent trend report.  In our local area of Eldorado Hills to and including Placerville through January 15 2014: new listings are up 2% and 41% for the past year.  Sales are down 8.6% for the month and down 28% for the year.  Average price per sq foot is down 1.7% from December but higher by 10.8% for the year.  Homes on average are selling for 94% of original list price.  Average sales prices are down 6.2% from December but higher by 11.8% from last year.  Based on closed sales we are currently at 4 months of inventory, the highest of the past year.  Based on pending sales we are at 2.8 months.  It would make sense then that we are also at the highest days-on-market of the year at 65.  This number is higher by 58% over December.

On the Employment front:  A gauge of competition for jobs fell in December to the lowest level in more than five years, but the labor market remains weak and it’s still too soon for workers to celebrate.  There were 10.35 million jobless workers at the end of 2013, compared with 4 million job openings, translating to about 2.6 would-be workers per spot, according to the U.S. Labor Department. That ratio, down a bit from 2.7 in November, was the lowest since August 2008.

The number of Americans who applied to receive unemployment benefits rose last week and the gradual decline in claims since last year appears to have halted, perhaps another sign the labor market is not healing as fast as it was toward the end of 2013.

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 7th, 2014

The National Debt is currently: $17,325,279,110,849.00  this might be a first but it is actually lower by about 16 BILLION.  I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 15,722 right where it was last Friday.  The S&P 500 is trading at 1,787.  Gold is trading at $1,262 an ounce, while oil futures at $98.67 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.19/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, last traded at 2.66%.  30-year Treasury Bond yields last traded at 3.64%.  Rates on 30-year fixed-rate mortgages are about 4.50% this week. MBS yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. Rising yields mean higher consumer-mortgage rates.

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 101.53 about where we were last Friday at this time.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.

In economic news this week; the reader’s digest version is we are beginning to see what looks to be another slowdown in the economic recovery at the end of last year and the beginning of this year.

U.S. stock mutual funds and exchange-traded funds last week together saw withdrawals of $18.8 billion, their biggest weekly outflows on record.  Most of this flowed into Bonds.  A correction in the stock market usually means a “flight-to-quality” where money flows from stocks to bonds, which in turn drives down rates.

American manufacturers said orders from customers declined in January after hitting a more than four-year high in December, but they blamed it largely on unusually cold and snowy weather last month.  The Institute for Supply Management index dropped to 51.3% from 56.5% in December, marking the lowest level in eight months.  Read ISM report. On a positive note, any reading over 50 indicates that more manufacturers are expanding instead of contracting. The index has been above 50% for 14 straight months.

Construction spending rose 0.1% in December, led by private projects, the Commerce Department reported. Private-construction spending rose 1% in December, with a 2.6% increase for residential projects and a 0.7% decline for nonresidential projects. Meanwhile, public-construction spending fell 2.3% in December.

The trade deficit climbed 12% in December, reversing the sharp drop in November, mainly because the U.S. sold fewer heavy-duty goods such as airplanes to other countries. A larger trade deficit, generally a negative for the economy, results when the U.S. buys more goods and services from trading partners and sells fewer to them. U.S. exports dipped 2.2% in December to $191.3 billion while imports rose 1.6% to $230 billion. U.S. petroleum exports, meanwhile, hit another record high of $13.5 billion. The U.S. is quickly becoming an oil-exporting giant again thanks to new technologies, and the surge in production has been one of the chief reasons for a declining U.S. trade gap.

On the Real Estate front:  In our local area of Eldorado Hills to and including Placerville through January 15 2014: new listings are up 2% and 41% for the past year.  Sales are down 8.6% for the month and down 28% for the year.  Average price per sq foot is down 1.7% from December but higher by 10.8% for the year.  Homes on average are selling for 94% of original list price.  Average sales prices are down 6.2% from December but higher by 11.8% from last year.  Based on closed sales we are currently at 4 months of inventory, the highest of the past year.  Based on pending sales we are at 2.8 months.  It would make sense then that we are also at the highest days-on-market of the year at 65.  This number is higher by 58% over December.Jobs report chart 2-7-2014

On the Employment front:  The U.S. added 113,000 jobs in January and the unemployment rate dipped to 6.6% from 6.7%, the Labor Department reported.  The expectation was for an increase of 190,000 non-farm jobs.  The second straight disappointing employment report suggests that unusually cold and snowy weather in the past two months is not the chief cause of a slowdown in job creation.  In December, the economy added just 75,000 jobs, a meager gain that many economites had initially blamed on bad weather. The Government also eliminated the most jobs in 15 months falling by 29,000 in January, including a 9,000 decline in Postal workers. It was the biggest drop in government jobs since October 2012.

The private sector once again generated all the employment growth, adding 142,000 jobs in January. That’s up sharply from 89,000 in December but well below the norm over the past year.  One worrisome sign is a sudden freeze in hiring in health care, one of the nation’s fastest growing industries over the past two decades.  Health-care providers cut jobs for the first time on record, raising questions about whether the roll-out of Obamacare is roiling the industry.

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 Jan 24th, 2014

The National Debt is currently: $17,342,844,586,845.00  higher by about 12 BILLION.  I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 16,009 about 500 pts lower than where it was on Tuesday.  The S&P 500 is trading at 1,805.  Gold is trading at $1,263 an ounce, while oil futures at $96.85 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.28/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, last traded at 2.74%.  30-year Treasury Bond yields last traded at 3.66%.  Rates on 30-year fixed-rate mortgages are about 4.625% this week. MBS yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. Rising yields mean higher consumer-mortgage rates.

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 101.00 about 0.50 Pt better in price than where we were last Friday at this time and a full point better than two weeks ago.  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.  This is what I’ve been saying for some time that a correction in the stock market usually means a “flight-to-quality” where money flows from stocks to bonds.  This is what’s pushing the rally today in the bond market.  There was no economic news released today.

I’ve just finished revising my investment portfolio which consists of a five asset class investment allocation. If you’re interested please check the Finance tab above.

In economic news this week; the reader’s digest version is it was a very light week for economic data and some of us experienced a holiday week with Monday being Martin Luther King day of which many did the celebratory march in honor of the man who did so much for civil rights in this country.  The economy continues to crawl along but at least in a positive direction.

The LEI or leading economic index rose 0.1% in December to 99.4, marking the sixth gain in a row, the Conference Board reported. “This latest report suggests steady growth this spring, but some uncertainties remain,” said Ken Goldstein, economist at the board.  That’s like saying “the market’s going to go up, or it’s going to go down.”  I printed this quote by a “prominent” economist at the Conference Board to illustrate why I call them “economites.”   I would love to have a job where you get paid to “guess” and you don’t get fired if you’re wrong.  Kind of like being a Weather Man.

On the Real Estate front:  After falling for three months, the National Association of Realtors reported sales of existing homes rose a meager 1% in December to an annual rate of 4.87 million, pushing 2013′s total sales to the highest level in seven years. For all of 2013, existing-home sales hit 5.09 million, up 9.1% from the prior year. The median sales price of used homes hit $198,000 in December, up 9.9% from the year-earlier period, supported by low inventory. For 2013 the median sales price reached $197,100, up 11.5% from the prior year, the strongest growth since 2005.  December’s inventory was 1.86 million existing homes for sale, a 4.6-month supply at the current sales pace.

According to conventional loans funded; home prices ticked up 0.1% in November, and were up 7.6% from the year-earlier period, the Federal Housing Finance Agency reported Thursday.  In October, prices rose 0.5%. FHFA’s data are based on sales information from mortgages sold to or guaranteed by federally controlled mortgage buyers Fannie Mae FNMA and Freddie Mac

On the Employment front:  The number of Americans who applied last week for unemployment benefits rose slightly but remains near a post-recession low, suggesting little change in private-sector hiring and firing patterns.  Last week, initial jobless claims edged up by 1,000 to 326,000. The new claims figure appears to offer additional indication that the labor market has not softened as much as the government’s employment report in December suggested.  The economy added just 74,000 net jobs in the final month of 2013.  The U.S. added an average of 180,00 jobs a month over the past two years and the pace of hiring, as predicted,  should pick up a bit in 2014.

Meanwhile, the government said continuing jobless claims increased by 34,000 to 3.06 million last. Continuing claims, reported with a one-week delay, 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!