Mortgage Pros, Inc.

This year the economy has performed beyond the wildest expectations of many economists. Who would have predicted that the Dow would be currently sitting well above 10,500 during its nadir of 6,500 during the Ides of March? One wonders if the market pundits paid a little heed to the soothsayer’s warning to Julius Caesar, “Beware the Ides of March,” that has forever imbued that date with a sense of foreboding. The turnaround (or maybe a semblance of it) has been quite impressive. Home sales rose by a stout 10.1 percent in November to a 6.54 million annualized rate of sale – easily the best pace in some time. With firming home prices and recovering retirement and personal wealth tied to stocks, many investors breathed a sigh of relief and more than a few million consumers are already reaching for their wallets and heading into the malls.
The stock market witnessed an upward move in a holiday-shortened week. All major indices ended in positive territory, gaining around 0.5 percent. The S&P 500 index rose 66.5 percent since hitting 12-year lows in March. The Dow Jones Industrial Average rose 53.66, to 10,520.10. The weak U.S. dollar was a major factor in terms of maintaining the index’s strong showing, as energy and material sectors were leading the stock markets. Also, a more positive employment report contributed to the increase in orders of durable goods for November, helping investors to be more optimistic for an improving U.S. economy.
In another sign of economic recovery, November wages increased by .3 percent, resulting in a jump of .4% and .5% in personal savings and spending, respectively. Savings remained steady at 4.7%. The employment report was like a Christmas carol to investor’s ears: Initial jobless claims surprised everyone, falling by 28,000, which the Labor Department describes as a part of “a long-term trend” of improvement.
In another move to boost the housing market amid rising rates, the U.S. Treasury removed the $400 billion cap from the troubled GSEs, Fannie Mae and Freddie Mac, allowing them to have enough buffer based on projected losses over the next three years to honor securities they sold to investors. Mortgage rates continued moving upwards during this past week after coming in lower in November; the Conforming Fixed 30-year rate topped out at around 5.2% while the Conforming Fixed 15-year rate was last seen at around 4.5%. Standard 5/1 ARM rates were hovering around 4.25%.
This week’s economic calendar has some reports that will draw attention: the Home Price Indicator and Consumer Confidence on Tuesday followed by the latest Weekly Jobless Claims and Continuing Claims on Thursday.

Thank you for reading my blog and have a prosperous New Year!

Randall

Posted in HEADLINE NEWS, MORTGAGE NEWS, THE FED | 1 Comment »

Dec. 29 (Bloomberg) — An index of home prices in 20 U.S.
cities rose in October for a fifth consecutive month, putting the housing market and economy farther down the path to recovery.
The S&P/Case-Shiller home-price index increased 0.4 percent from the prior month on a seasonally adjusted basis, after a 0.2 percent rise in September, the group said today in New York. The gauge was down 7.3 percent from October 2008, the smallest year-over-year decline since October 2007.
Tax credits for first-time buyers and mortgage rates that are less than a percentage point from record lows may prevent the market from retreating after sales jumped 35 percent over the first 11 months of 2009. Rising home and stock prices over the past two quarters enabled households to recover 28 percent of the record $17.5 trillion of wealth lost since mid 2007.
“Home prices have generally stabilized,” John Canally, an economist at LPL Financial Corp. in Boston, said before the report. “Consumers feel a little more comfortable when prices stop falling. That’ll help consumer spending.”
Economists forecast the 20-city home-price index would fall 7.2 percent from a year earlier, according to the median estimate of 31 economists surveyed. Estimates called for declines of 4.6 percent to 8 percent.
The seasonally adjusted 20-city index has been rising on a month-to-month basis since June.

Biggest Gain

Compared with the prior month, 11 of the 20 areas covered showed an increase on a seasonally adjusted basis while eight had a decline. The biggest month-to-month gain was in San Francisco, which increased 1.7 percent.
All of the 20 cities in the S&P/Case-Shiller index showed a smaller year-over-year decline than in September.
To help ensure housing doesn’t weaken again, President Barack Obama and Congress last month extended a tax credit for first-time homebuyers until April 30 from Nov. 30, and expanded it to include some current owners.
Existing home sales in November rose to a 6.5 million annual rate, the highest level since February 2007, the National Association of Realtors said last week. They were still 10 percent lower than September 2005 peak levels.
“The tax credit had the intended impact of drawing buyers in and lowering inventory,” Lawrence Yun, the real-estate agents group’s chief economist, said in a news conference. “An estimated 2 million buyers have taken advantage of the credit.”

Foreclosures, Unemployment

Mounting foreclosures and an unemployment rate that economists surveyed by Bloomberg News this month forecast will exceed 10 percent in the first half of 2010 remain risks for the housing market and the economy.
Foreclosure filings in 2009 will reach a record for the second consecutive year with 3.9 million notices sent to homeowners in default, RealtyTrac Inc., the Irvine, California- based company said Dec. 10. This year’s filings will surpass 2008’s total of 3.2 million.
Still, homebuilders are seeing some improvement. Hovnanian Enterprises Inc., New Jersey’s largest homebuilder, said Dec.
16 its fourth-quarter loss narrowed as more buyers signed purchase contracts. “On the whole, we are seeing more price stability across our markets,” Chief Financial Officer Larry Sorsby said in a Dec. 17 conference call
Karl Case, an economist professor at Wellesley College, and Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University, created the home-price index based on research from the 1980s. Case this month announced his retirement from teaching.

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Scam Reported by Georgetown High NROTC

Capt. Guzman, who oversees the NROTC Program at GHS has advised the Chamber that several local businesses have been approached by a company called Jam Sports Marketing, doing business in Mansfield, TX, to purchase advertising on tee shirts that supposedly benefit the GHS NROTC. Please be advised that Capt. Guzman has not authorized this company to sell advertising to benefit the NROTC program and wants to warn local businesses about this scam. The same business has been accused of similar activities in St. George, Utah.

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