Texas Mortgage Market Update – For the week of April 30, 2012

 

For the week of April 30, 2012 – Vol. 10, Issue 18

 

>> Texas Mortgage Market Update 

QUOTE OF THE WEEK…“Opportunity is missed by most people because it is dressed in overalls and looks like work.” –Thomas Edison, American inventor

 

INFO THAT HITS US WHERE WE LIVE… Those who continue to work the housing market are in fact seeing more opportunity. Thursday’s Pending Home Sales rose in March to their highest level in almost two years when the looming expiration of the homebuyer tax credit was boosting sales. This National Association of Realtors (NAR) index is a measure of contracts signed for existing homes, which typically close a month or two out. It was UP a seasonally adjusted 4.1% for the month and UP a non-seasonally adjusted 10.8% from a year ago.

 

Earlier in the week March New Home Sales came in at a 328,000 annual rate, greater than expected although down 7.1% for the month after February’s sales were revised upward. Inventories dropped to a new record low. Even better, the median price of new homes sold was UP 6.3% versus a year ago and the average price UP 11.7%. The FHFA home price index for homes financed by conforming mortgages is UP 0.4% over a year ago, its largest gain since 2006-07. And for the 20 biggest metros, the Case-Shiller home price index was UP 0.2% in February, its first gain in 10 months.

 

BUSINESS TIP OF THE WEEK… Don’t let life’s little annoyances get to you — you’ll waste energy and lose your positive attitude. Just remember, those petty aggravations are no big deal.

>> Review of Last Week

EARNINGS UP, STOCKS TOO… The broad S&P 500 market index enjoyed its best week in the last six, as the Dow also gained and the tech-heavy Nasdaq absolutely soared. Strong corporate earnings for Q1 were the driver, with tech heavies Apple and Amazon leading the way. Expedia and Chevron also beat expectations, although Exxon Mobil missed. The Fed left the Funds Rate at 0% to 0.25% and forecast that inflation for the next couple of years would not go beyond 2.0%. Hope they’re right.

 

On the down side, the Fed predicted long term GDP growth to be just 2.3% to 2.6%, not exactly a booming economy. The first estimate for Q1 GDP missed even that, coming in at a less than expected 2.2%. Durable goods orders were down a surprising 4.2% and initial jobless claims seem to be edging back to the 400,000 level. One ray of sunshine came Friday when final Michigan Consumer Sentiment for April went to 76.4 from its preliminary read of 75.7.

 

For the week, the Dow ended UP 1.5%, at 13228; the S&P 500 closed UP 1.8%, to 1403; and the Nasdaq bolted UP 2.3%, to 3069. 

 

Bonds stayed on an even keel. The FOMC Statement pledging an “exceptionally low” Funds Rate through late 2014 and continued European worries were balanced by the strong corporate earnings that kept investors comfortable in riskier stocks. The FNMA 3.5% bond we watch finished the week UP .05, at $103.24. Freddie Mac’s weekly Primary Mortgage Market Survey reported rates on fixed-rate mortgages averaged just above record lows. 

 

DID YOU KNOW?… The NAR reported that recent sellers typically sold their homes for 95% of the listing price, but 61% said they had lowered the asking price at least once. 

>> This Week’s Forecast

INFLATION, MANUFACTURING, JOBS… Monday gives us a read on the Fed’s favorite inflation measure, Core PCE Prices, which leave out volatile food and energy. It’s only expected up a tad, small comfort to those of us who eat and drive. Manufacturing growth should remain flat but positive by both Chicago PMI and ISM Index readings.

 

Everyone is waiting for Friday’s April Employment Report. Unfortunately, economists are forecasting only a modest gain of 162,000 Nonfarm Payrolls and that the Unemployment Rate will hold at a disappointing 8.2%.

>> 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 30 – May 4

 

 Date Time (ET) Release For Consensus Prior Impact
M

Apr 30

08:30 Personal Income Mar 0.2% 0.2% Moderate
M

Apr 30

08:30 Personal Spending Mar 0.5% 0.8% HIGH
M

Apr 30

08:30 Core PCE Prices Mar 0.2% 0.1% HIGH
M

Apr 30

09:45 Chicago PMI Apr 60.0 62.2 HIGH
Tu

May 1

10:00 ISM Index Apr 53.0 53.4 HIGH
W

May 2

10:30 Crude Inventories 04/28 NA 3.978M Moderate
Th

May 3

08:30 Initial Unemployment Claims 04/28 375K 388K Moderate
Th

May 3

08:30 Continuing Unemployment Claims 04/21 3.300M 3.315M Moderate
Th

May 3

08:30 Productivity-Prelim. Q1 -0.6% 0.9% Moderate
Th

May 3

10:00 ISM Services Apr 55.5 56.0 Moderate
F

May 4

08:30 Average Workweek Apr 34.5 34.5 HIGH
F

May 4

08:30 Hourly Earnings Apr 0.2% 0.2% HIGH
F

May 4

08:30 Nonfarm Payrolls Apr 162K 120K HIGH
F

May 4

08:30 Unemployment Rate Apr 8.2% 8.2% HIGH

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months… Last week’s policy statement coming out of the Fed meeting gave no indication they will start raising rates before their late 2014 target. 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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