The Weekly Rap will be getting out a bit later as I have taken on another endeavor. Many of you know that I also have another passion, food and cooking. I have taken the position as new Chef at the Bass Lake Golf Course Bar & Grill. Please know though, that my main focus is still being a Mortgage Advisor. We currently serve just breakfast and lunch and have room for 50+ on the beautiful outdoor patio and 38 inside. I will be revamping the menu so stay tuned…
The National Debt is currently: $17,531,034,962,587.00 is Higher by about 7 BILLION. The interest pay-out alone on the debt is 246 Billion per year! I post this so we will be aware of what we are leaving to our children.
The Dow last traded at 16,775 about 200pts lower than where it was a week ago. The S&P 500 is trading at 1,936. Gold is trading at $1,276 an ounce, while oil futures at $106.77 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.81/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 105.20 about .40 worse than where we were last week. We’ve broken out of the past trading range and rates are still trending lower at this point. 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 plug along, Small Business owners are more optimistic, Retail Sales continue to plug higher, Wholesale prices are lower, and home listings locally are much higher than last year.
Small-business owners have recovered all of the optimism lost during the Great Recession, according to a report released this week. The higher level of confidence is feeding into price increases. The National Federation of Independent Business’s small-business optimism index increased again to 96.6. last month, from 95.2 in April. The May reading is the highest since September, 2007, before the last recession. The improvement though, while welcome, is far below readings that normally accompany an expansion.
Our government recorded a budget deficit of $130 billion in May, which is 6% lower than in the same month last year. For the fiscal year to date, Our government has spent $436 billion more than it’s taking in. It is though 30% lower than the same period in fiscal 2013. The deficit hit a record of $1.4 trillion in 2009.
Retail Sales rose 0.3% last month on strong demand for cars, trucks and home-improvement products, but spending tapered off at most other retailers after a big bump in demand in April. Despite the mixed report, the pace of sales in April and May taken together reflect an economy growing at a moderate pace in the spring after the U.S. suffered a sharp contraction in the first quarter. Retail sales account for about one-third of consumer spending, the main engine of economic activity.
Prices at the Wholesale level (PPI) unexpectedly sank in May, as prices dropped across the board, easing concern that inflation pressure might be stirring in the pipeline. The producer price index dropped 0.2% after rising 0.6% in April and 0.5% in March, the Labor Department said. The Federal Reserve has actually been trying to nudge inflation higher. They were caught off guard by the weak inflation seen last year and have been heartened by signs that inflation is stabilizing in the past few months. But Fed officials pay much more attention to the personal consumption expenditure index, which measures prices consumers pay.
Consumer sentiment declined to an early June reading of 81.2, the lowest level in three months, from a final May level of 81.9, according to the University of Michigan and Thomson Reuters report. Economists watch sentiment levels to get a feeling for the direction of consumer spending.
On the Real Estate front: For the El Dorado Hills/Cameron Park/Shingle Springs areas: From April to May New listings are higher by 14% and higher by 81% over this time last year. Average price per Sq/Ft is about the same from a month ago but higher by 10% from a year ago. As you could probably guess the average-days-on-market is higher due to increased inventory. The average sold price is $552,000 vs. $473,000 just a year ago.
On the Employment front: Job openings rose 7.2% to 4.46 million in April, the most since September 2007, the U.S. Department of Labor reported Tuesday. Compared with same period in the prior year, April job openings rose 17%, as private-sector openings increased 18%. With 9.75 million unemployed people in April, there were about 2.2 potential job seekers per opening. In April 2013, there were 11.68 million unemployed people — about 3.1 potential seekers per opening. When the recession began in December 2007, there were less than two potential job seekers per opening. The total number of hires remained at 4.71 million. The level of hires was almost 5 million when the recession began.
The number of Americans who applied for unemployment benefits last week increased slightly but remained near a post-recession bottom, indicating little change in a gradually improving U.S. labor market.
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