Last week in the News

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending September 9 rose 6.3%. Refinancing applications increased 6%. Purchase volume rose 7%.

The producer price index, which tracks wholesale price inflation, was unchanged in August after a 0.2% increase in July. For the year, seasonally adjusted wholesale prices are up 6.5%. Core prices — excluding food and fuel — rose 0.1% in August.

Retail sales were unchanged in August after a downwardly revised 0.3% increase in July. On a year-over-year basis, retail sales rose 7.2%.

Total business inventories rose 0.4% in July to $1.526 trillion, up 10.6% from a year ago. Total business sales increased 0.7% to $1.197 trillion in July, up 12% from a year ago. The total business inventories/sales ratio in July was 1.27.

Consumer prices rose a seasonally adjusted 0.4% in August, following a 0.5% increase in July. For the year, seasonally adjusted consumer prices are up 3.8%.

Industrial production at the nation’s factories, mines and utilities rose 0.2% in August. Compared to a year ago, industrial production is up 3.4%. Capacity utilization rose to 77.4% in August from a revised 77.3% in July.

The Reuters/University of Michigan consumer sentiment index for September’s preliminary reading rose to 57.8 from 55.7 in August. The August reading had been the lowest level since 55.3 set in November 2008.

Initial claims for unemployment benefits rose by 11,000 to 428,000 for the week ending September 10. Continuing claims for the week ending September 3 fell by 12,000 to 3.7 million.

Economic Update – September 12, 2011

Retail sales fell 0.7% for the week ending September 3, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 2.7%.

The Institute for Supply Management reported that the monthly composite index of non-manufacturing activity rose to 53.3 in August from 52.7 in July. A reading above 50 signals expansion. It was the 21st straight month of expansion in the services sector.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending September 2 fell 4.9%. Refinancing applications decreased 6.3%. Purchase volume rose 0.2%.

The trade deficit decreased to $44.8 billion in July from a revised $51.6 billion in June. Exports rose 3.6% to $178 billion. Imports decreased 0.2% to $222.8 billion.

According to the Federal Reserve, consumer credit debt rose in July by $12 billion for a total credit level of $2.45 trillion. Revolving debt, which includes credit cards, fell by $3.4 billion. Non-revolving debt, including loans for cars, rose by $15.4 billion.

Wholesalers increased their inventories 0.8% to $462.4 billion in July. This followed a revised 0.6% rise in June. Sales at the wholesale level were little changed in July at $396.01 billion. On a year-over-year basis, sales were 15.1% higher since July 2010.

Initial claims for unemployment benefits rose by 2,000 to 414,000 for the week ending September 3. Continuing claims for the week ending August 27 fell by 30,000 to 3.7 million.

International homebuyers —

— those with permanent residences outside the U.S., recent immigrants and temporary visa holders — are snapping up homes and condos in the U.S. According to the National Association of Realtors (NAR), they increased their purchase of U.S. residential property from $66 billion in 2010 to $82 billion in 2011, a 24% increase in just one year.

Fueling international investors is their sense that U.S. home prices are a bargain. A favorable currency rate is also working to their advantage. The value of the dollar has fallen against most foreign currencies, making U.S. residential property even cheaper.

In 2011, international buyers came from a total of 70 countries. The top five — Canada, Mexico, China, U.K., and India — accounted for 53% of all transactions. International transactions occurred across the U.S., but four states accounted for 58% of all transactions: Florida had 31%, California had 12%, Texas had 9% and Arizona had 6%.

The average price paid by international buyers was $315,000, compared to the overall U.S. average of $218,000. This year’s report showed that 45% of purchases were below $200,000.

Many real estate purchases were also at the high end. The New York Times recently reported a big increase in Chinese businessmen purchasing luxury property in New York City, where $1,500 per square foot is considered cheap compared to $2,000 in Hong Kong, $3,600 in London and $4,300 in Monaco.

Economic Update – September 5, 2011

Pending home sales, a forward-looking indicator based on signed contracts, fell 1.3% in July after a 2.4% increase in June. On a year-over-year basis, pending sales are up 14.4%.

The Standard & Poor’s/Case-Shiller 20-city housing price index — on a non-seasonally adjusted basis — rose 1.1% in June after a 1% increase in May. On a year-over-year basis, prices fell 4.5% compared with June 2010.

The consumer confidence index fell to 44.5 in August from 59.5 in July. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending August 26 fell 9.6%. Refinancing applications decreased 12.2%. Purchase volume rose 0.9%.

Factory orders rose 2.4% in July to a seasonally adjusted $453.2 billion, following a revised 0.4% decrease in June. Excluding the volatile transportation sector, orders rose 0.9% in July.

The Institute for Supply Management reported that the monthly composite index of manufacturing activity fell to 50.6 in August after a reading of 50.9 in July. A reading above 50 signals expansion. It was the 25th straight month of expansion.

Total construction spending fell 1.3% to $789.5 billion in July, following an upwardly revised 1.6% gain in June. Economists had anticipated an increase of 0.1% in July.

Initial claims for unemployment benefits fell by 12,000 to 409,000 for the week ending August 27. Continuing claims for the week ending August 20 fell by 18,000 to 3.7 million. The monthly unemployment rate remained unchanged at 9.1% in August.

Election Poll – September 2011

Online Surveys – Zoomerang.com

Economic Update – August 29, 2011

Retail sales fell 1% for the week ending August 20, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 3%.

New home sales fell 0.7% in July to a seasonally adjusted annual rate of 298,000 units from a downwardly revised rate of 300,000 units in June.

Orders for durable goods — items expected to last three or more years — rose 4% in July after a revised 1.9% increase in June. Excluding volatile transportation-related goods, orders posted a monthly increase of 0.7%.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending August 19 fell 2.4%. Refinancing applications decreased 1.7%. Purchase volume fell 5.7%.

The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at a revised annual rate of 1% in the second quarter of 2011, compared to the initial estimate of 1.3%. This follows a 0.4% pace of growth in the first quarter of 2011.

The Reuters/University of Michigan consumer sentiment index for August’s final reading rose to 55.7 from a preliminary reading of 54.9, which was the lowest level since May 1980.

Initial claims for unemployment benefits rose by 5,000 to 417,000 for the week ending August 20. Continuing claims for the week ending August 13 fell by 80,000 to 3.64 million, the lowest level since September 2008.

Most Favorable Housing Affordability Index in 30 Years!

In 2011, the financial ability for Americans to buy a home reached its highest level in 30 years, according to the housing affordability index (HAI) produced by the National Association of Realtors® (NAR). Housing affordability considers home prices, mortgage rates and family income.

NAR’s housing affordability index shows that in the first half of 2011, the typical monthly mortgage payment for the purchase of a median-priced existing home is only 13 percent of gross household income, the lowest since recordkeeping began in 1970.

Reduced home prices, the lowest recorded mortgage interest rates in U.S. financial history and rising family income have combined to create an extraordinary market environment. Top mortgage and real estate professionals have never been busier serving the needs of buyers who know a rare and valuable opportunity when they see one!

Another factor that makes buying now a great idea is the expansive choice of inventory. Multiple communities and neighborhoods have an exciting selection of fine, affordable homes for sale. What could be better than low prices, low financing and lots of choices?

Keep in mind that the real estate and mortgage industries have experienced an intense amount of change in the last two years. That’s why it’s so important to work with experienced, successful financial professionals like myself and my real estate agent partners. Together we form a natural team that serves the comprehensive needs of homebuyers, from knowing the very best home loan programs to suit your needs to neighborhood-level knowledge that only an experienced real estate agent can provide.

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Economic Update – June 20, 2011

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending June 10 rose 13%. Refinancing applications increased 16.5%. Purchase volume rose 4.5%.

Retail sales fell 0.2% to $387.1 billion in May after a revised 0.3% increase in April. On a year-over-year basis, retail sales rose 7.7%.

The combined construction of new single-family homes and apartments in May rose 3.5% to a seasonally adjusted annual rate of 560,000 units. Single-family starts increased 3.7%. Multifamily starts rose 2.9%. Applications for new building permits, seen as an indicator of future activity, rose 8.7% to an annual rate of 612,000 units.

Total business inventories rose 0.8% in April to $1.49 trillion, up 10.6% from a year ago. Total business sales increased 0.1% to $1.18 trillion in April, up 11% from a year ago.

Consumer prices rose a seasonally adjusted 0.2% in May, following a 0.4% increase in April. For the year, seasonally adjusted consumer prices are up 3.4%.

Industrial production at the nation’s factories, mines and utilities rose 0.1% in May. Compared to a year ago, industrial production is up 3.4%. Capacity utilization was 76.7% in May.

The National Association of Home Builders/Wells Fargo monthly housing market index fell three points in June to 13. An index reading below 50 indicates negative sentiment about the housing market.

Initial claims for unemployment benefits fell by 16,000 to 414,000 for the week ending June 11. Continuing claims for the week ending June 4 fell by 21,000 to 3.68 million.

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Economic Update – June 6, 2011 – Cont’d

On a different note:

After September 30, 2011 deadline, high-balance loans (with a maximum balance of $729,750) will once again be classified as "jumbo" and carry a higher interest rate.

“The Housing and Economic Recovery Act of 2008 raised the maximum conforming loan limit in the contiguous United States, the District of Columbia and Puerto Rico to $729,750. Alaska, Guam and the U.S. Virgin Islands have a higher high-cost conforming loan limit of $938,250.

With historically low interest rates, a large available inventory and home affordability at its best level in 40 years, NOW is the time to buy! For customers in high-cost areas of the country, a further advantage is higher conforming loan limits that avoid a higher interest jumbo loan. Deadline for closing loans under the $729,750 maximum balance is September 30, 2011

 

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Economic Update – June 14, 2011

Retail sales rose 0.4% for the week ending June 4, according to the ICSC-Goldman Sachs index. On a year-over-year basis, retailers saw sales increase 2.5%.

The trade deficit decreased 6.7% to $43.7 billion in April from a revised $46.8 billion in March. Exports rose 1.3% to $175.6 billion. Imports decreased 0.4% to $219.2 billion.

Wholesalers increased their inventories 0.8% to $447.2 billion in April. This followed a 1.1% rise in March. Sales at the wholesale level rose 0.3% in April to $393.5 billion. On a year-over-year basis, sales were 14.4% higher since April 2010.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending June 3 fell 0.4%. Refinancing applications increased 1.3%. Purchase volume fell 4.4%.

Import prices rose 0.2% in May, following a revised 2.1% increase in April. On a year-over-year basis, import prices are up 12.5%. Export prices rose 0.2% in May. On a year-over-year basis, export prices are up 9%.

According to the Federal Reserve, consumer credit debt rose in April by $6.25 billion for a total credit level of $2.43 trillion. Figures for March were revised from an initial gain of $6 billion to a gain of $4.82 billion. Revolving debt, which includes credit cards, fell by $0.9 billion. Non-revolving debt, including loans for cars, rose by $7.2 billion.

Initial claims for unemployment benefits rose by 1,000 to 427,000 for the week ending June 4. Continuing claims for the week ending May 28 fell by 71,000 to 3.68 million.

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