The Weekly Rap! Friday Oct 11th, 2013

The National Debt is currently: $16,963,015,587,583.00

The Dow last traded at 15,212.  The S&P 500 is trading at 1,702.  Gold is trading at $1,267 an ounce, while oil futures at $101.61 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 2.67%.  30-year Treasury Bond yields last traded at 3.72%.  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 101.25 about a ½ point (fee) from 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 that due to the Governments shutdown has most economic news on hold including the following:

  • The Employment report which was due out last Friday.
  • Trade deficit
  • Job openings
  • Wholesale inventories
  • Import price index
  • Federal budget  (Don’t get me started, or read my rant)
  • Retail sales
  • Producer price index
  • University of Michigan consumer sentiment index
  • Business inventories

I wrote a blog on the Governments shutdown last week which is not surprisingly appropriate for this week as well.  You can read it at  I will be posing a follow-up to this blog later today titled “The Government Shutdown Pt 2, how/when will we get out of this mess”

Of the reports that were issued this past week the Federal Reserve meeting’s minutes were released allowing us to see what was said behind closed doors. Most members of the Fed still thought that it would be appropriate to scale back its stimulus program this year, even as the central bankers decided to hold off moving in mid-September.  I wonder… are they concerned about running out of money?

A majority of Fed officials arrived at the meeting still thinking that it would be appropriate to begin tapering the $85 billion bond purchase program this year and end it completely by the middle of 2014, the minutes showed.  But no decisions were reached and the minutes indicated that it might not make sense to enhance the guidance due to uncertainties over who would be the next Fed chair.  The Fed policy committee is scheduled to hold its next meeting Oct. 29 – 30.

The expectation is pretty much for the Fed not to scale back the stimulus in October because Bernanke is not scheduled to hold a press conference and because of the government shutdown.  They think that a taper in December is more likely if at all.  Obama nominated Fed vice chairman Janet Yellen to the top Fed post, replacing Bernanke.  Yellen may shed more light on Fed policy deliberations during her confirmation hearings expected in coming weeks.

The National Federation of Independent Business (NFIB) Small-business sentiment edged lower in September on a big drop in the percentage who expects the economy to improve. The NFIB small-business optimism index fell to 93.9 from a corrected 94.1 in August.  The pessimism on the economy helped to offset rising percentages expecting higher sales.  While the change in this month’s index was minimal, the drop in outlook for future economic conditions is evidence that many owners are keeping an eye on Washington.

On the Real Estate front:  Since January or year-to-date, homes for sale (listings) in El Dorado Hills, Ca have increased at 145% (82 in Jan, 201 currently).  Since last month listings have increased 7%.  Pending sales YTD have decreased 8%, and since last month they are down 4.3%.  Sales (Sold) have dropped from 86 last month to 51 this month 40%.  Listings in the area are staying on the market longer.  Where we had multiple offers and too many buyers and not enough sellers a few months ago, it has flipped and now we need more buyers. Did you know that someone paying $1,700/month rent would equate to a $325,000 loan at 4.75% (not including impounds)?

On the Employment front:  The number of people who filed new applications for U.S. unemployment benefits surged in the first week of October to the highest level in six months because of ongoing processing miscues in California as well as layoffs related to the government shutdown.  Initial claims leaped by 66,000 to 374,000 last week, marking the biggest one-week spike since last November.  The average of new claims over the past month usually a more reliable gauge, also jumped by 20,000 to 325,000.  The monthly number usually moves in much smaller increments.  The real scary reality of this is that the stock market RALLIED 200 pts on the news.  This should normally trigger a sell off as weakening employment is usually detrimental to stocks.

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.

Please visit my website at:


Bill Bartok

Mortgage AdvisorMLO# 445991

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

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