Market update

QUOTE OF THE WEEK… “People are looking for something a little more stable.” –Dolly Parton, American singer-songwriter and actress.

INFO THAT HITS US WHERE WE LIVE… A major real estate tech and data firm reports that stability, in fact, is returning to the housing market. This does come with a slowdown in home price gains, but that’s not necessarily a bad thing. The firm’s chief economist explains, “Continued moderation of home price appreciation is a welcomed sign of more balanced real estate markets and less pressure on affordability for potential home buyers.” This slowdown in home price growth also reflects a welcome rise in supply. More homeowners are willing to list their properties and homebuilders are bringing more new homes to the market. And, hey, even with the slowdown, prices are still up more than 7% year-over-year. A stabilizing housing market is clearly more attractive to consumers. Fannie Mae’s latest housing market survey reveals an encouraging change in attitudes: “In September, the share of consumers who say now is a good time to buy a home is back up to 68%, a four-percentage-point increase from August. Additionally, the share saying they would prefer to buy a home on their next move ticked back up to 66% after a three-point drop.” And if you’re looking to corroborate these findings in real-world results, the Mortgage Bankers Association reported their purchase applications index up 2% for the week ending October 3. This put it at its highest level since early July. BUSINESS TIP OF THE WEEK…Stop worrying about things you have no control over. This only destroys your focus, making it harder to reach your goals.

>> Review of Last Week

DOWN!… Friday, the main stock market benchmarks ended decidedly down, posting their deepest weekly dips in more than two years. The trend started on Tuesday with a 273 point drop in the Dow. But Wednesday saw the index gain all of it back, as Wall Street digested the FOMC Minutes from the Fed’s last meeting. The good news was, the central bank is in no hurry to raise rates. They fear a European downturn, which is bad news that’s actually good news for rates. Thursday, investors decided the bad news really was bad news, since U.S. companies need healthy European economies to buy our goods and services. Stocks dropped 335 points. The global theme continued with minutes from the Bank of Japan showing their central bankers are worried over a weakness in exports. Further evidence of slowing global growth came with a slip in China’s HSBC Services PMI, although it did stay above 50, indicating expansion in their services sector. The down vibe got precious little help from U.S. economic data, which was light on the ground. There was a small drop in import prices, which dipped for the third straight month, another sign inflation stays quiet. The best news was that initial weekly jobless claims are under 300,000 and the 4-week moving average is at its lowest level since 2006. The week ended with the Dow down 2.7%, to 16544; the S&P 500 down 3.1%, to 1906; and the Nasdaq down 4.5%, to 4276.Stocks sank, but bonds gained, as investors sought a safe haven for their money amidst global economic concerns. The 30YR FNMA 4.0% bond we watch finished the week up .05, to $105.30. In Freddie Mac’s Primary Mortgage Market Survey for the week ended October 9, national average fixed mortgage rates fell back near their lows for the year. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.  DID YOU KNOW?… A national real estate information company reports that nearly 10 million homeowners, representing 19% of all homeowners with a mortgage, now have at least 50% equity in their homes.

>> This Week’s Forecast

MIXED SIGNALS FOR RETAIL SALES AND MANUFACTURING, HOUSING STARTS GAIN… Although overall Retail Sales are forecast off for September, if you exclude auto sales, they should be up a tick. The theme of mixed signals continues with manufacturing. The New York Empire and Philly Fed Indexes are predicted to show growth slowing in those regions, but Industrial Production and Capacity Utilization are expected to gain a bit nationally. Both Housing Starts and Building Permits should break through the million unit per year threshold, as home builders appear to remain optimistic. Monday, Columbus Day, the stock market is open but the bond market is closed.

Information provided by Laurie Moore of Wallick & Volk Mortgage

Laurie A Moore Sr. Mortgage Consultant & Certified Mortgage Planner NMLS #256449 2086 Willow Creek Road Prescott, AZ 86301 Office: 928-778-7167 Mobile: 928-308-1723 Fax: 928-445-5308

Market update

QUOTE OF THE WEEK… “Life is like the ocean, it goes up and down.” –Vanessa Paradis, French singer, model, and actress

INFO THAT HITS US WHERE WE LIVE… Life in the housing market sure mimicked the ocean last week. Let’s start with the up part. New single-family home sales blasted up 18.0% in August, reaching a solid 504,000 unit annual rate. These sales are now 33% ahead of where they were a year ago, hitting their highest level in more than six years and posting their biggest monthly jump in 22 years! Plus, the median price of new homes sold was up 8.0% versus a year ago. With all the torrid selling going on, the months’ supply of new homes fell to 4.8, but inventories grew by 2,000 units although they’re still quite low. Builders may now be inspired to improve that situation.  The week began, however, with the down part of life in the housing market. Existing Home Sales dipped 1.8% in August, to a 5.05 million unit annual rate. But, hey, this follows four months in a row of gains, showing that while existing home sales are not yet booming, they’ve clearly bounced off the bottom. The median price of an existing home slipped a tad in August, but is still up 4.8% from a year ago. Inventories dipped for the month, but that was after rising for seven months in a row. August also evidenced a big gain in existing home sales that include financing, versus all-cash deals, evidence of a growing mortgage market. BUSINESS TIP OF THE WEEK…Spend 10 minutes a day on social media. People want real interaction online. Putting even a small amount of time into checking and answering customer questions can go a long way.

>> Review of Last Week

A TOUGH WEEK… Stocks did not have an easy time, as volatility was the name of the game. Markets were down three out of five days, and the up days were not up enough to keep all three major indexes from posting losses for the week. Friday was an up day, as bargain hunters swooped in after Thursday’s 264-point downswing. Also on Friday, the final Q2 GDP estimate showed the economy growing at a 4.6% annual rate. This follows the Q1 GDP reading, which had the economy shrinking at a 2.1% annual rate, so experts rightly wonder if growth can be sustained. Some even doubt the numbers, since the government keeps changing the definitions of the components that go into the GDP. Other economic data certainly did not paint a picture of an economy growing at a robust rate, as we had our usual mixture of good and bad news. August saw New Home Sales beat estimates by a country mile while Existing Home Sales edged south for the month. Durable Goods Orders, expected to be down badly, came in down even worse. Michigan Consumer Sentiment didn’t hit its forecast, although it remains at a fairly positive level. In another up and down move, weekly Initial Unemployment Claims rose by 12,000 but this only took them to a still low 293,000 level. Continuing Claims grew by 7,000, but remain well below 2.5 million. The week ended with the Dow down 1.0%, to 17113; the S&P 500 down 1.4%, to 1983; and the Nasdaq down 1.5%, to 4512.Treasuries and bonds in general experienced a mixed trading week, with sellers controlling the front end and buyers edging up prices at the rear. The 30YR FNMA 4.0% bond we watch finished the week up .09, to $105.11. National average mortgage rates for the week ended September 25 barely moved from the week before in Freddie Mac’s Primary Mortgage Market Survey. Fixed rates fell slightly and are still well down from where they were a year ago. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.  DID YOU KNOW?… A major real estate information provider reported that in Q2, nearly 1 million properties returned to positive equity. This creates more opportunities for homeowners to sell, buy, and refinance.

>> This Week’s Forecast

PENDING HOME SALES AND MANUFACTURING SLIP, INFLATION AND JOBS OK… An action packed week, if your taste for action tends to a barrage of economic reports. The important ones include August Pending Home Sales, forecast off a bit, plus ISM and Chicago PMI, expected to show manufacturing slipping to a slower growth rate. Core PCE Prices are predicted to reveal inflation under control, while Personal Spending should edge up. The big news of the week is the September Employment Report, expected to come in with another moderate gain of just over 200,000 new Nonfarm Payrolls.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of Sep 29 – Oct 3

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

M Sep 29

08:30

Personal Income

Aug

0.3%

0.2%

Moderate

M Sep 29

08:30

Personal Spending

Aug

0.4%

-0.1%

HIGH

M Sep 29

08:30

Core PCE Prices

Aug

0.0%

0.1%

HIGH

M Sep 29

10:00

Pending Home Sales

Aug

-0.2%

3.3%

Moderate

Tu Sep 30

09:45

Chicago PMI

Sep

61.5

64.3

HIGH

Tu Sep 30

10:00

Consumer Confidence

Sep

92.0

92.4

Moderate

W Oct 1

10:00

ISM Index

Sep

58.5

59.0

HIGH

W Oct 1

10:30

Crude Inventories

9/27

NA

-4.273M

Moderate

Th Oct 2

08:30

Initial Unemployment Claims

9/27

297K

293K

Moderate

Th Oct 2

08:30

Continuing Unemployment Claims

9/20

2.458M

2.439M

Moderate

F Oct 3

08:30

Average Workweek

Sep

34.5

34.5

HIGH

F Oct 3

08:30

Hourly Earnings

Sep

0.2%

0.2%

HIGH

F Oct 3

08:30

Nonfarm Payrolls

Sep

210K

142K

HIGH

F Oct 3

08:30

Unemployment Rate

Sep

6.1%

6.1%

HIGH

F Oct 3

08:30

Trade Balance

Aug

-$40.9B

-$40.5B

Moderate

F Oct 3

10:00

ISM Services

Sep

58.9

59.6

Moderate

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months… The Fed seems to be afraid of raising the Funds Rate too soon, so many economists don’t expect a hike to begin before the middle of next year. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%-0.25%

After FOMC meeting on:

Consensus

Oct 29

0%-0.25%

Dec 17

0%-0.25%

Jan 28

0%-0.25%

Probability of change from current policy:

After FOMC meeting on:

Consensus

Oct 29

     <1%

Dec 17

     <1%

Jan 28

     <1%

Information provided by:

Laurie Moore 

Sr. Mortgage Consultant

Certified Reverse Mortgage Specialist

Wallick & Volk Mortgage lending

2086 Willow Creek Road

Prescott, AZ 86301

Office: 928-778-7167

Mobile: 928-308-1723

Fax: 928-445-5308

laurie.moore@wvmb.com

Market Update

 

 

>> Market Update

QUOTE OF THE WEEK… “Things are not always as they seem; the first appearance deceives many.” –Phaedrus, Roman poet and fabulist INFO THAT HITS US WHERE WE LIVE… The ancient Roman writer of fables certainly hit the nail on the head with regard to last week’s housing reports. Housing Starts dipped 14.4% in August to a 956,000 annual rate, while Building Permits dropped 5.6% to a 998,000 annual rate. With both numbers coming in under a million units a year, pundits were quick to declare that the home building recovery is over. But they were truly deceived. Even with the August decline, starts are up 8.0% over a year ago. The multi-family sector is a bit stronger, but single-family starts are still up 4.2% in the past year. Starts are volatile from month to month, so to see the trend, we need to look at the 12-month moving average, now at its highest level since October 2008. Equally encouraging, the number of homes under construction but not finished was up 0.6% in August and up 21.6% from a year ago. The pundits also overlooked two more facts. 1) Residential construction jobs are up 123,000 in the last year, which wouldn’t make sense if the recovery were going in the other direction. 2) The National Association of Home builders said that builder confidence in the market for new single-family homes rose in September for the fourth month in a row, to a nine-year high!>> Review of Last Week

THE FED FIDDLES, STOCKS SPIKE… Wednesday’s Fed meeting was basically a non-event, as Chair Janet Yellen continued to fiddle around about how soon they’ll start raising interest rates. The Fed didn’t change its Policy Statement language that it will be a “considerable period” before rate hikes begin. This was a relief to investors who promptly pushed the Dow to another record close for the week. Adding to the positive vibe was Scotland’s vote to remain in the U.K., as well as Chinese e-commerce giant Alibaba’s ginormous initial public offering. It was a big upper for Wall Street to have a company with a dominant presence in China list its shares in the U.S.  Investors needed all this good news to offset the mostly disappointing economic data. In the manufacturing sector, Industrial Production, Capacity Utilization, and the Philadelphia Fed Index all missed estimates, although the New York Empire Manufacturing Index beat expectations. Housing Starts and Building Permits came in way below forecasts, but builder confidence was higher. Best of all, last week’s Initial Unemployment Claims fell by 36,000 to 280,000, its lowest reading in two months and the second lowest level since 2000. Furthermore, Continuing Claims dropped another 63,000 to 2.43 million. The week ended with the Dow up 1.7%, to 17280; the S&P 500 up 1.3%, to 2010; and the Nasdaq up 0.3%, to 4580.As stocks went up, bonds ended mixed, in choppy trading that reacted to both the good news and the disappointing data. The 30YR FNMA 4.0% bond we watch finished the week up 0.75, to $105.02. Freddie Mac’s Primary Mortgage Market Survey had national average mortgage rates up for the week ending September 18. It was the biggest one-week gain of the year, yet rates are still well down from where they were a year ago. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.  DID YOU KNOW?… This week’s GDP Deflator is the measure of economic growth that accounts for inflation. It factors in the change in prices of goods produced within the quarter being reported, letting us compare GDP readings in constant dollars.

>> This Week’s Forecast

HOME SALES ADVANCE, AND SO DOES GDP… Housing market news remains in the spotlight. August Existing Home Sales should continue to come in over the 5 million unit annual rate. New Home Sales are also forecast up for the month, solidly into 400,000 per year territory. The end of the week sees the GDP-3rd Estimate, predicted to show economic growth edging ahead in Q2 after its dismal contraction in Q1. But economists expect the GDP Deflator, which accounts for inflation, to languish around an anemic 2% growth rate. August Durable Goods Orders should do a big dip, but if you take out volatile transportation orders, they’re forecast to be up a tick.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of Sep 22 – Sep 26

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

M Sep 22

10:00

Existing Home Sales

Aug

5.20M

5.15M

Moderate

W Sep 24

10:00

New Home Sales

Aug

435K

412K

Moderate

W Sep 24

10:30

Crude Inventories

9/20

NA

+3.67M

Moderate

Th Sep 25

08:30

Initial Unemployment Claims

9/20

300K

280K

Moderate

Th Sep 25

08:30

Continuing Unemployment Claims

9/13

2.470M

2.429M

Moderate

Th Sep 25

08:30

Durable Goods Orders

Aug

-16.3%%

22.6%

Moderate

F Sep 26

08:30

GDP-3rd Estimate

Q2

4.6%

4.2%

Moderate

F Sep 26

08:30

GDP Deflator-3rd Estimate

Q2

2.1%

2.1%

Moderate

F Sep 26

09:55

U. of Michigan Consumer Sentiment

Sep

85.0 

84.6

Moderate

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months… The Fed’s statements last week have most economists expecting the central bank to keep the Funds Rate where it is well into 2015. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%-0.25%

After FOMC meeting on:

Consensus

Oct 29

0%-0.25%

Dec 17

0%-0.25%

Jan 28

0%-0.25%

Probability of change from current policy:

After FOMC meeting on:

Consensus

Oct 29

     <1%

Dec 17

     <1%

Jan 28

     <1%

 This information is provided by Laurie A Moore of Wallick & Volk Mortgage Corp. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material does not represent the opinion of Wallick & Volk Mortgage. Wallick and Volk Mortgage Corp. NMLS #2973. BK 0018295 AZ MLO #0912625

 Laurie Moore

Sr. Mortgage Consultant

Certified Reverse Mortgage Specialist

2086 Willow Creek Road

Prescott, AZ 86301

Office: 928-778-7167

Mobile: 928-308-1723

Fax: 928-445-5308

laurie.moore@wvmb.com

 

 

 

 

Market Update

 

>> Market Update

QUOTE OF THE WEEK… “Be so good they can’t ignore you.” –Steve Martin, American actor, writer, and musician INFO THAT HITS US WHERE WE LIVE… The housing market isn’t quite as good as Mr. Martin advises, but it’s a lot better than some media pundits would have us believe. Last week, one of the world’s leading independent macro-economic research companies gave its bullish assessment of the U.S. housing market and mortgage growth. Their property economist said that the weak August jobs report was “probably just an isolated blip.” He feels that “indicators such as initial jobless claims suggest that labor market conditions are still strengthening.” Jobs of course are key to the housing recovery. This economist noted that with the slower gain in home prices in Q2, values improved and mortgage affordability is very favorable. He observed that “45% of respondents to the Fed’s Senior Loan Officer Survey saw mortgage demand strengthen in the third quarter.” Echoing this, an accounting and management consulting firm reported that loan production among independent mortgage bankers increased in Q2 by 50% over the previous quarter, the first gain in the past three quarters. Finally, Fannie Mae’s August National Housing Survey found Americans’ attitude toward the future of the housing market is getting more positive. BUSINESS TIP OF THE WEEK… Successful businesses focus on helping their customers be better off. Thriving companies obsess over quality, service, and creating genuine customer value.

>> Review of Last Week

FEARING THE FED… It was another cautious week of trading on Wall Street, as investors feared the Fed may signal the start of interest rate hikes sooner than expected at their coming meeting. This time, positive attitudes did not prevail and all three major benchmarks scored their first weekly losses in six weeks. Sadly, the broadly based S&P 500 fell from the record highs it hit earlier in the week. Geopolitical jitters didn’t help either. Gaza and Ukraine were quieter, but worries continue, with the President ordering airstrikes on ISIL in Syria and Scotland contemplating breaking away from the U.K. There wasn’t a ton of economic data to chew on, but what there was came in pretty decent. August Retail Sales were up 0.6% overall and up a respectable 0.3% if you took out motor vehicle sales. This shows that consumers are opening their wallets to help the economy. It was no surprise then that the preliminary Michigan Consumer Sentiment reading for September hit its highest level since July 2013. Initial and Continuing Unemployment Claims edged up a tad, but Business Inventories were in line with expectations, increasing 0.4%. The week ended with the Dow down 0.9%, to 16988; the S&P 500 down 1.1%, to 1986; and the Nasdaq down 0.3%, to 4568.The OK economic data plus Fed fears sent bond prices south for the second week in a row. The 30YR FNMA 4.0% bond we watch finished the week down 1.01, to $104.27. National average mortgage rates edged up slightly in Freddie Mac’s Primary Mortgage Market Survey for the week ending September 11. Yet rates remain well below where they were a year ago. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.  DID YOU KNOW?… A new study found that about 20% of homeowners who would benefit from refinancing fail to do so, throwing away an average of approximately $11,500 in savings over the life of their loans.

>> This Week’s Forecast

INFLATION AND BUILDERS OK, FACTORIES HUM, WE WATCH THE FED… Inflation is expected to stay well within the Fed’s target range for both wholesale prices, measured by the Producer Price Index (PPI) and consumer prices, gauged by the Consumer Price Index (CPI). August Housing Starts are forecast off a smidge but Building Permits are up, as builders remain confident. And the New York Empire and Philadelphia Fed manufacturing indexes should still show expansion. The week’s big focus will be Wednesday’s FOMC meeting after which the Fed’s policy statement will be dissected to see if a rise in the Funds Rate will indeed come sooner than expected.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of Sep 15 – Sep 19

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

M Sep 15

08:30

NY Empire Manufacturing Index

Sep

16.0

14.7

Moderate

M Sep 15

09:15

Industrial Production

Aug

0.3%

0.4%

Moderate

M Sep 15

09:15

Capacity Utilization

Aug

79.3%

79.2%

Moderate

Tu Sep 16

08:30

Producer Price Index (PPI)

Aug

0.0%

0.1%

Moderate

Tu Sep 16

08:30

Core PPI

Aug

0.1%

0.2%

Moderate

W Sep 17

08:30

Consumer Price Index (CPI)

Aug

0.0%

0.1%

HIGH

W Sep 17

08:30

Core CPI

Aug

0.2%

0.1%

HIGH

W Sep 17

10:30

Crude Inventories

9/13

NA

-0.972M

Moderate

W Sep 17

14:00

FOMC Rate Decision

9/17

0%-0.25%

0%-0.25%

HIGH

Th Sep 18

08:30

Initial Unemployment Claims

9/13

305K

315K

Moderate

Th Sep 18

08:30

Continuing Unemployment Claims

9/6

2.945M

2.487M

Moderate

Th Sep 18

08:30

Housing Starts

Aug

1.045M

1.093M

Moderate

Th Sep 18

08:30

Building Permits

Aug

1.054M

1.052M

Moderate

Th Sep 18

10:00

Philadelphia Fed Index

Sep

23.5

28.0

HIGH

F Sep 19

10:00

Leading Economic Industries (LEI)

Aug

0.4%

0.9%

Moderate

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months… The vast majority of economists believe the central bank will keep the Fed Funds Rate where it is, at least through the end of the year. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%-0.25%

After FOMC meeting on:

Consensus

Sep 17

0%-0.25%

Oct 29

0%-0.25%

Dec 17

0%-0.25%

Probability of change from current policy:

After FOMC meeting on:

Consensus

Sep 17

     <1%

Oct 29

     <1%

Dec 17

     <1%

 This information was provided by Laurie Moore at Wallick & Volk Mortgage Lending. Laurie can be reached by phone at 928-778-7167 or e-mail at laurie.moore@wvmb.com

About Prescott

Prescott

Nestled at an elevation of 5,200′ feet above sea level amongst the largest stand of ponderosa pine forests in the U.S., Prescott’s perfect weather provides an average temperature of 70 degrees year round, with four beautiful and distinct seasons, and breathtaking landscapes complete with granite mountains, lakes, streams, and rolling meadows filled with wildlife.

Here you’ll find many things to do including horseback riding, golfing, kayaking, fishing, hiking, camping, mountain biking, local breweries, restaurants, shopping, and a hometown feel that keep our visitors, young and old, coming back year after year.

Once the territorial capital of the state, Prescott is rich with history embodied in its world famous Whiskey Row and abundant historical landmarks.

Tourist Information

City Website