The Weekly Rap! Friday April 3rd 2015

It’s Good Friday folks and even if you don’t celebrate Easter I wish you a Great Friday and happy weekend!

If you like this commentary please visit and “Like” my Facebook page. 

The National Debt is currently: $18,172,439,132,587.00  is Higher by another 15 BILLION.  The interest pay-out alone on the debt is 240 Billion per year!  I post this so we will be aware of what we are leaving to our children.

Trading in the bond market was thinner than usual with yields (rates) dropping closing at 9:00 AM PST this morning, and the Stock market is closed for Good Friday. The Dow last traded at 17,763 about the same as where it was last Friday.  The S&P 500 is trading at 2,066.  Gold is trading at $1,202 an ounce, while oil futures at $49.55 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $2.77/Gal.   

The FNMA 30-year fixed 3.0% coupon (interest rates at which banks sell their loans into Fannie Mae), containing 3.25% – 3.625% mortgage rates, the benchmark or how rate sheets are priced these days is currently trading at 101.84 better by .45% over where we were last week.  Our current trading is about 101.50 to about 102.50.  I would expect the market to trade higher when it re-opens on Monday (Lower Rates).  Basically the 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 lower the rate.     

In economic news this week; the reader’s digest version is the economy is trudging along but seems to be slowing in the first part of the new year.  The disappointing employment report this morning makes it more likely the Fed Gods will at least wait until the end of summer before raising rates for the first time since 2006.  It’s also sure to stoke debate over whether it’s the start of a less favorable trend or just a passing phase triggered by harsh winter weather, and other temporary factors.

Forget about a strong start for our economy in 2015: Consumer spending barely rose in February after a decline in January, pointing to much slower growth in the first quarter.  Consumer spending rose a scant 0.1% last month, the Commerce Department reported. The small increase in spending in February and outright decline in January suggest the economy failed in early 2015 to match the pace of growth at the end of last year.  GDP (Gross Domestic Product) is forecast to expand just 1.4% in the first quarter, down from 2.2% in the fourth quarter and 5% in the third quarter.

The consumer confidence index climbed to 101.3% in March from an upwardly revised 98.8 in February, the Conference Board reported. Apparently Americans think the economy will get better over the next six months, though they are a bit less sure about right now. The present situation index, a measure of current conditions, actually fell to 109.1 from 112.1. Yet the future expectations index increased to 96.0 from 90. “This month’s increase was driven by an improved short-term outlook for both employment and income prospects; consumers were less upbeat about business conditions,” said Lynn Franco, director of economic indicators at board.

On the Real Estate front: According to the National Association of Realtors, “pending” home sales in February reached their highest level since June 2013 rising 3.1% to 106.9 after a downward revision to January’s numbers.  The index is up 12% from February 2012 levels.  In Sacramento County Pending sales are higher by 24.8% from January.  El Dorado County was higher by 15.2%.  Total existing-homes sales in 2015 are forecast to be around 5.25 million, an increase of 6.4%, and the national median existing-home price is expected to increase around 5.6%.

The combination of low interest rates and strong consumer confidence along with solid job growth, cheap oil and low inflation continue to support further increases in home prices.  Home prices were steady in January, according to the S&P/Case-Shiller 20-city composite released Tuesday, with Charlotte, Miami and San Diego all seeing gains of 0.7% while San Francisco prices fell 0.9%.  Compared to Jan. 2014, prices were up 4.6%. 

On the Employment front:  Private-sector employment gains continued in March but at a slower pace than in the prior month.  Employers added 189,000 jobs last month, Automatic Data Processing Inc. reported Wednesday. This is the lowest increase in the monthly ADP since January 2014.  Analysts use ADP’s data to get a feeling for the Labor Department’s employment report, which covers government jobs in addition to the private sector. The ADP survey has sharply underperformed payroll data over the past several months.

In keeping with the ADP report, the U.S. created the fewest total new jobs in March in 15 months, a steep downshift in hiring that raises questions about whether the economy is suffering from a temporary malaise or if a broader slowdown in underway.  The economy generated just 126,000 new jobs last month, breaking a streak of 12 straight 200,000-plus gains and marking the smallest increase since the end of 2013.  The unemployment rate was unchanged at 5.5%, the Labor Department reported this morning.

What’s more, employment gains for February and January were reduced by a combined 69,000, taking a bit of shine off the labor market’s performance in the first two months of the year.  The result: The increase in hiring in the first three months of 2015 has slowed dramatically to an average of 197,000. While the pace of hiring this year is still fairly decent, it doesn’t come close to matching average job gains of 289,000 in the fourth quarter.

About the only good news in the March jobs report was an increase in worker pay. Average hourly wages rose a solid 0.3% in March, though how much employees get paid hasn’t shown much change despite the biggest increase in hiring in 2014 in 15 years. The increase in wages over the past 12 months was 2.1%.


Fun for the day: 

Part 2 of 5 of “Where to move”…for all of those who are contemplating retirement locations.

You can retire to California where…  

1. You make over $450,000 and you still can’t afford to buy a house. 

2. The fastest part of your commute is going down your driveway. 

3. You know how to eat an artichoke. 

4. You drive your rented Mercedes to your neighborhood block party. 

5. When someone asks you how far something is, you tell them how long it will take to get there rather than how many miles away it is. 

6. The 4 seasons are: Fire, Flood, Mud, and Drought. 


You can retire to New York City where…  

1. You say “the city” and expect everyone to know you mean Manhattan. 

2. You can get into a four-hour argument about how to get from Columbus Circle to Battery Park, but can’t find Wisconsin on a map. 

3. You think Central Park is “nature.” 

4. You believe that being able to swear at people in their own language makes you multi-lingual. 

5. You’ve worn out a car horn. (IF you have a car). 

6. You think eye contact is an act of aggression. 


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!