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 – 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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