The Weekly Rap! Friday Aug 9th, 2013

The National Debt is currently: $16,894,431,665,658.00

The Dow last traded at 15,436.  The S&P 500 is trading at 1,694.  Gold is trading at $1,310 an ounce, while oil futures at $105.75 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.57/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, last traded at 2.58%.  30-year Treasury Bond yields last traded at 3.64%.  Rates on 30-year fixed-rate mortgages are a hair above 4.5% 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 100.96 right 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 readers digest version is it was a very light week in the economic news category with lackluster trading in the markets.

U.S. service-sector companies expanded at faster than expected pace in July, according to the Institute for Supply Management. The ISM said its survey of purchasing managers – the executives who buy supplies for their companies – climbed to 56.0% last month from 52.2% in June. That’s the highest level since February.

According to the most recent survey of senior bank loan officials at American banks and foreign branches in the US, in the last three months, 13% of those questioned had established easier conditions on business loans to large and medium-sized firms and 7% on small firms.  While this is a small percentage, their business could be feeling the pinch of a slow growth economy and attempting to gain new business.

Annual home-price growth in June was close to the fastest pace in seven years, as inventories of existing and new homes remains low.  Home prices, including distressed sales, rose 1.9% in June, and were up 11.88% from a year earlier, according to CoreLogic, an Irvine, Calif.-based analysis firm. Excluding short sales and other distressed properties, prices rose 1.8% in June, and were up 10.97% from the year-earlier period, reaching the fastest annual pace since February 2006.  The 30-year fixed-rate mortgage, according to Freddie Mac data, rose as high as 4.46% in June from as low as 3.35% in May.

Consumer credit rose 5.9%, or $13.8 billion, to an annual rate of $2.85 trillion, the Fed reported.  Revolving credit like credit cards fell 3.8%, while non-revolving credit like student and auto loans climbed 10%. Revolving credit fell for the first time since March, while non-revolving credit has grown every month since August 2011.

New applications for unemployment benefits rose less than expected last week and remained near a five-year low, perhaps a sign of some improvement in the labor market. A better sign was a decline in the four-week average, a more reliable gauge than the volatile weekly number. It fell by 6,250 to 335,500, touching the lowest level since November 2007.

If you know anyone who can benefit from my services, please call me.  My greatest goal is to see clients and friends happy.  I guess that’s why I love providing mortgage financing.  It’s an immediate gratification when you can help someone purchase a home, or lower their payment on their existing home. 

Bill Bartok

Mortgage Advisor

NMLS# 445991

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