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:

Bill Bartok

Mortgage Advisor MLO# 445991

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

Thank you!

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