Texas Mortgage Market Update – For the week of April 23, 2012

 

For the week of April 23, 2012 – Vol. 10, Issue 17

 

>> Texas Mortgage Market Update 

QUOTE OF THE WEEK…“A great pleasure in life is doing what people say you cannot do.” –Walter Bagehot, English businessman, essayist and journalist

 

INFO THAT HITS US WHERE WE LIVE… People say home building can’t recover any time soon. Yet the signs continue to mount that a recovery is underway. Off 5.8% for March, Housing Starts are up 10.3% from a year ago, to a 654,000 unit annual rate. The monthly drop came from volatile multi-family starts, while single-family units were down only 0.2%. And the number of homes under construction was up for the seventh month in a row! Even Building Permits are up 30.1% versus a year ago. It’s early in the home building recovery, but some are saying we could get to 1.5 million units by 2016.

 

More signs the housing market is recovering slowly but surely came with March Existing Home Sales. Although off 2.6% for the month, at 4.48 million units, they’re up 5.2% over a year ago. In addition, the median price rose in March to $163,800 and is up 2.5% over a year ago, while the months’ supply of inventory stayed at 6.3. Frankly, no one expects a big bump in home sales soon, but the market is definitely beginning to heal, as it’s obviously a great time to buy. 

 

BUSINESS TIP OF THE WEEK… Take time to think. Get away from the day’s chaos and ponder a while. Don’t worry if a great idea doesn’t come right away. Back on the job, your subconscious will continue to work.

>> Review of Last Week

UP AND DOWN… Markets went in both directions last week as the S&P 500, a broad market measure, clung to a fractional 0.6% gain, its first move upward in three weeks. Traders’ moods were also up and down, as the economic data rolled in. The up mood was fueled by the strong earnings reports of a wide range of players, from McDonald’s to GE to Microsoft. Also up were March Retail Sales, gaining a better than expected 0.8% and up 6.5% over a year ago!

 

But other things economic were downers. Both the Empire State and Philadelphia Fed manufacturing indexes dropped for the month, reflecting a slowdown in growth. Industrial production was flat and manufacturing capacity edged down, both worse than expected. Worse than that, weekly unemployment claims headed up to 386,000, while continuing claims hit 3.30 million.

 

For the week, the Dow ended UP 1.4%, at 13029; the S&P 500 closed UP 0.6%, to 1379; and the Nasdaq edged down 0.4%, to 3000. 

 

There was enough political and economic turbulence coming out of Europe to keep investors in the safe haven of bonds. This held prices up, with the FNMA 3.5% bond finishing the week UP .04, at $103.19. Inflation fears were kept in check as doubts about the economic recovery continue. So national average mortgage rates held steady, still at historically low levels, as reported in Freddie Mac’s weekly Primary Mortgage Market Survey. 

 

DID YOU KNOW?…  CPI inflation is more widely reported, but the GDP Price Deflator is often the inflation measure of choice for economists. It takes a more comprehensive look at price levels for a more precise read on inflation.

>> This Week’s Forecast

NEW HOME SALES, PENDING HOME SALES AND THE FED… We’ll have more reads on the housing market, with Tuesday’s New Home Sales forecast to be up slightly for March. Thursday’s Pending Home Sales, measuring signed contracts in March for existing homes, are expected up a bit, indicating sales a few months out.

 

The Fed meets Wednesday and although no one expects the FOMC Rate Decision to change anything, we’ll have a policy statement giving their opinion on the economy. For hard numbers, we’ll have to wait until Friday for Q1 GDP-Advanced, projected to show economic growth slowing.

>> 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 Apr 23 – Apr 27

 

 Date Time (ET) Release For Consensus Prior Impact
Tu

Apr 24

10:00 Consumer Confidence Apr 69.5 70.2 Moderate
Tu

Apr 24

10:00 New Home Sales Mar 320K 313K Moderate
W

Apr 25

08:30 Durable Goods Orders Mar -1.9% 2.4% Moderate
W

Apr 25

10:30 Crude Inventories 04/21 NA 3.856M Moderate
W

Apr 25

12:30 FOMC Rate Decision 04/25 0%-0.25% 0%-0.25% HIGH
Th

Apr 26

08:30 Initial Unemployment Claims 04/21 373K 386K Moderate
Th

Apr 26

08:30 Continuing Unemployment Claims 04/14 3.300M 3.297M Moderate
Th

Apr 26

10:00 Pending Home Sales Mar 0.5% -0.5% Moderate
F

Apr 27

08:30 GDP-Advance Q1 2.6% 3.0% Moderate
F

Apr 27

08:30 GDP Price Deflator-Advance Q1 2.2% 0.9% Moderate
F

Apr 27

08:30 Employment Cost Index Q1 0.5% 0.4% HIGH
F

Apr 27

09:55 Univ. of Michigan Consumer Sentiment-Final Apr 75.7 75.7 Moderate

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months… We’ll see if this week’s Fed meeting gives any indication of when they’ll change their super low Funds Rate policy. No one sees a hike any time soon. 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
Jun 20 0%–0.25%
Jul 31 0%–0.25%
Sep 12 0%–0.25%

 

Probability of change from current policy:

 

After FOMC meeting on: Consensus  
Jun 20      <1%  
Jul 31      <1%  
Sep 12      <1%  
   
   

 

 

About Max Leaman Austin Mortgage

GREAT RATES, LOW FEES, CLOSE ON TIME™ ---- 2012 Ranked #1 Austin Residential Mortgage Lender (Austin Business Journal) 2010, 2011 & 2012 Five Star Professional (Texas Monthly) 2009, 2010, 2011, 2012, 2013 PrimeLending Chairman's Circle Award 2009, 2010, 2011, 2012 Scotsman Guide Top Originator (Top 200 Mortgage Professionals in U.S.A.) Better Business Bureau "A+ Rating" National Lender Rankings (Scotsman Guide): Top Purchase Volume (No. 10) Most Loans Closed (No. 32) Top Dollar Volume (No. 88)

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