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| For the week of Jan 09, 2012 --- Vol. 10, Issue 2 |
Last Week in Review: Unemployment hit a three-year low. How did Bonds and home loan rates react? Forecast for the Week: The second half of the week will be a busy one, with news on retail sales, consumer sentiment, and more. View: Want some help keeping your New Years Resolutions? Theres an app for that! |
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"Workin' nine to five. What a way to make a livin.'" Dolly Parton. And with last week's Jobs Report showing that unemployment has reached three-year lows, that's something more people have been able to do lately. Read on to learn more about what's happening in the labor market...and with home loan rates.  On Friday, the Labor Department reported that 200,000 jobs were created in December, with 212,000 private job gains offsetting modest losses in government jobs. Adding to the positive spin of the report was the Unemployment Rate falling to 8.5% from a previously reported and upwardly revised 8.7% reading.
While people being removed from the labor force are skewing this unemployment number to some degree, it's important to note that the U-6 unemployment rate dropped a few ticks as well, to 15.2%. This number includes ALL unemployed individuals, including those "marginally attached" to the labor force, who are either 'discouraged' and haven't sought work recently, as well as those folks working part-time who really desire full-time jobs. Overall the Jobs Report was a modestly positive reading on the labor market. We still have 5.6 million people unemployed for 27 weeks or more, and that number is little changed this month. But the big takeaway today is that the trend is improving. The other big takeaway is that bad news out of Europe helped balance out the good Jobs news here at home...allowing Bonds and home loan rates to recover from their initial negative reaction to the Labor Department's report. The Euro is continuing to be weighed down by rising concern on member countries' ability to get their deficits in order and their debt in manageable position. The bottom line is that the problems in the Eurozone are vast, complicated, and without easy solutionsso it will take a very long time for clear resolution. And during times of global uncertainty, money will flow into the relative safe haven of the US Dollar and US Bonds - including Mortgage Bonds, which home loan rates are tied to. This means that home loan rates should continue in their sideways trend and remain near historic lows, making now a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients. |
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The second half of the week features several important economic reports: - The Fed's Beige Book will be released on Wednesday. This is a report on economic conditions from the 12 Federal Reserve District Banks around the country.
- Initial Jobless Claims will be released on Thursday. Last week's number fell by 15,000 to 372,000 and the report signaled that the labor market could be turning the corner to greener pastures.
- Retail Sales will be released on Thursday and will be closely watched by both investors and traders. Last week, it was reported that retailers saw better-than-expected revenues for same-store sales in December, but the numbers were achieved by big discounts. Sales on Black Friday were robust, but fell off in the ensuing weeks during December. So the markets will be watching closely for the final numbers this week.
- The first look on Consumer Sentiment for January will be released on Friday.
In addition to those reports, the Treasury Department will sell a total of $66 Billion in government securities on Tuesday, Wednesday, and Thursday. Those auctions could impact the markets, depending on how they're received. So, I'll be watching the results - and their impact - closely. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates remain near their record best levels. I will be monitoring this closely in the weeks ahead. Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jan 06, 2012) |
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There's an App for That New Year's Resolution! Making It Happen, Part 2 In last week's View article, we focused on 5 steps to achieving your New Year's Resolutions. Those steps included: setting realistic goals, making a simple plan for each goal, announcing your goals, tracking and celebrating your progress, and avoiding the urge to give up if you have a setback. Luckily, you're not on your own to work through those steps. That's because there are a number of social media websites and smart phone applications designed to help you. Obviously, popular apps like Facebook and Twitter can help you announce your goals, hold yourself accountable, and receive supportive feedback from friends and family members. But there are a number of additional resources that you may not know about. Here are just 5 social media sites and apps that can help you set your New Year's resolutionsand stay on track! 1. Tweet Reminders. Twitter is great for connecting with people and sharing news instantaneously. But did you know it's also a great way to remind yourself about tasks? Need a reminder to go to the gym or to call those past clients? No problem. Visit the Tweet Reminders site, and then enter your Twitter username and up to 5 tasks or reminders. You can even pick a date and time. Then, Tweet Reminders will send you a direct message on Twitter to remind you about them. It's both an easy and helpful thing to do. 2. Moteevate. Regardless of whether your goal is big or small, this site has the inspiration, energy, and advice you need to reach it. With moteevate, you get support from people you already know as well as advice from experts in the field - all while being surrounded by people looking to achieve similar goals. You can even moteevate in teams and act as moteevators for each other. The site also includes cool trackers to record your progress and milestones. Plus, you can customize the privacy settings to keep your goals to yourself or share them with others. And best of all, the basic platform is free to use with the caveat that you pay whatever you want after you achieve your goal. In fact, this honor system is the only thing old-fashioned about moteevate. 3. Toodledo. This is a businessperson's dream app. You've no doubt seen a To-Do list beforebut this app kicks it up a notch! Not only does it help you easily organize your tasks and set alarms, but it also allows you to collaborate with other people and establish sub-tasks to work towards your goal in small steps! Plus, Toodledo can be used on your mobile phone, in your email, on your calendar, and even integrated directly into your web browser. So you can stay on track from anywhereand at any time. 4. StickK. The basic principle of this app is that "incentives get people to do things." So if you really want to achieve a goal - whether it's personal or professional - it's time to put your money where your mouth is. Basically, stickK allows you to create a Commitment Contract focused on achieving a specific goal. As part of the process, you set your goal and timelines, stakes, referee who will monitor your progress, and supporters who will cheer you on. If you achieve your goal in your timeframe, you don't lose the stakes you wagered. But - the best part is - even if you don't achieve your goal, the money you wagered goes to a worthy cause or charity that you designate. So it truly is a win-win situation! 5. GymPact. This is similar to stickK in that you put money on the linebut it's different in that you can also earn some money. You start by making a commitment that you will go to the gym a certain number of times per week (don't worry, you can change your pact any week). You also set the monetary stakes that you'll pay if you don't meet your commitment. Then, you simply use the GymPact iPhone app to check in when you go to the gym. When you meet your weekly goal, you'll be rewarded with real cash, funded by the people who didn't work out! The more days you commit, the more cash you earn. The only downside is that you need an iPhone (or an iPod Touch and a gym with Wi-Fi) to participate, since apps for other systems aren't available. Of course, this is just the tip of the iceberg when it comes to social media websites and apps designed to help you set and achieve your goals. Best wishes to you in the coming weeks and months. And, if your New Year resolutions involve any financial or housing matters that I can help with, please call or email today. I'll be happy to help out in any way that I can. Economic Calendar for the Week of January 09 - January 13 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | Wed. January 11 | 02:00 | Beige Book |
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| Moderate | Thu. January 12 | 08:30 | Jobless Claims (Initial) | 1/7 | NA |
| 372K | Moderate | Thu. January 12 | 08:30 | Retail Sales | Dec | NA |
| 0.2% | HIGH | Thu. January 12 | 08:30 | Retail Sales ex-auto | Dec | NA |
| 0.2% | HIGH | Fri. January 13 | 10:00 | Consumer Sentiment Index (UoM) | Jan | NA |
| 69.9 | Moderate |
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The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors. |
For the week of Dec 19, 2011 --- Vol. 9, Issue 51 |
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Last Week in Review: Several reports brought good news to the Markets, plus there was news on inflation. Forecast for the Week: The Bond Markets may be closing early Friday, but there will be plenty of reports on the housing market, inflation, and the state of the economy View: Want to give a gift that keeps on giving? Check out this great idea below. |
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"Whistle while you work." Snow White. That's something more people have been able to do lately, as Initial Jobless Claims have now fallen below 400,000 - a level that historically is associated with an improving job market - for five out of the last six weeks. And that wasn't the only bit of good news the markets saw last week. Read on for details.  Not only was last week's Initial Jobless Claims reading of 366,000 the lowest level since May of 2008, there was a double dose of good news in the manufacturing sector, as both the Philadelphia Fed Index and the Empire State Index were both well above expectations. Normally, good economic news causes money to move out of Bonds and into Stocks as investors like to take advantage of gains...and this would typically hurt home loan rates, as they are tied to Mortgage Bonds.
However, the continued uncertainty out of Europe helped keep Bonds and home loan rates on an improving trend, as the US Dollar and US Bonds (including Mortgage Bonds, which home loan rates are based on) are benefiting from safe haven buying. Ultimately, Europe needs to provide a large financial backstop for their banks and sovereign debt in order to fix their problems longer-term. Until this happens, uncertainty should benefit the US Dollar and US Bonds, and keep home loan rates relatively low. One factor that we can't ignore, though, is inflation. Despite the Fed stating again last week that inflation is moderating, core consumer level inflation has continued to inch higher every month. Also, last week's Producer Price Index showed that inflation at the wholesale level was slightly higher in November. Remember, inflation is the arch enemy of Bonds and home loan rates, because if inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as home loan rates are tied to Mortgage Bonds, this would mean home loan rates move higher. The bottom line is that while the uncertainty out of Europe should continue to help Bonds and home loan rates, both inflation and continued good economic reports here in the US could temper these improvements. With home loan rates still near historic lows, now remains a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients. |
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The Bond Markets will be closing early at 2:00 p.m. on Friday for the Christmas holiday, but the week will be busy before then. - Housing Starts and Building Permits (Tuesday), Existing Home Sales (Wednesday) and New Home Sales (Friday) for November will be reported.
- Weekly Initial Jobless Claims will be delivered on Thursday, and the Markets will be looking to see if the reading remains under 400,000.
- Also on Thursday, we'll see the Consumer Sentiment Index for December as well as the final reading on Third Quarter Gross Domestic Product (GDP) for 2011. The second reading came in at 2%, down from the first reading of 2.5%.
- Finally, Friday the markets will see reports on Personal Income and Personal Spending along with the inflation indicator Core Personal Consumption Expenditure (PCE). Durable Goods will also be reported.
In addition to those reports, the National Association of Realtors (NAR) will announce downward revisions for Existing Home Sales over the past 5 years - and the revision is expected to be "meaningful." Finally, the Treasury Department will sell a whopping $99 Billion in 2-, 5- and 7-year Notes on Monday, Tuesday, and Wednesday. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, uncertainty out of Europe continues to help Bonds and home loan rates, though they are facing resistance. I'll be watching this closely as we head into the new year. Chart: Fannie Mae 3.5% Mortgage Bond (Friday Dec 16, 2011) |
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Give the Gift of Charity this Holiday Season! It's a Snap with THE GOOD CARD - a Gift Card for Charity Network for Good has a fresh angle on gifting this holiday season: The Good Card - a gift card for charity - is perfect for everyone on your list. Good Cards have a stored value that can be redeemed as a donation to any of more than 1.2 million charities based in the US. Good Cards can be distributed via email or physical mail, or can be private labeled to meet your brand needs. Learn more at Network for Good. A gift card for charity is an ideal reward for employees or thank you gift for customers and vendors that links their passion for a cause to your company's brand. A new study by researchers from Harvard Business School, the University of British Columbia and the University of Liege that was recently highlighted in the Washington Post confirms that a bonus employees get to spend on others is more motivating than a bonus they get to spend on themselves. A Good Card recipient can redeem their gift card as a donation to any of more than a million nonprofits, an easy way for employees to share their personal rewards with others. Good Card purchases, including fees, are tax-deductible to your company and are a creative way to spend funds earmarked for philanthropy. In addition, because Good Card purchases are charitable donations, they do not fall under the IRS gift limit or policies around corporate gifts with cash value. Network for Good's charity gift card program is turn-key, customizable and easy to implement - even at the last minute. The program is recommended for any company looking to put a special spin on their gift-giving this year. What's more, the person GIVING the gift (i.e., the card purchaser) gets the benefit of a tax advantage for charitable donations as well. The Good Card is a creative and constructive way to honor partners and prospects, friends and neighbors during the holiday season and throughout the year. Visit Network for Good for more details. Economic Calendar for the Week of December 19 - December 23 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | Tue. December 20 | 08:30 | Housing Starts | Nov | NA |
| 628K | Moderate | Tue. December 20 | 08:30 | Building Permits | Nov | NA |
| 653K | Moderate | Wed. December 21 | 10:00 | Existing Home Sales | Nov | NA |
| 4.97M | Moderate | Thu. December 22 | 10:00 | Consumer Sentiment Index (UoM) | Dec | NA |
| 67.7 | Moderate | Thu. December 22 | 08:30 | GDP Chain Deflator | Q3 | NA |
| 2.5% | Moderate | Thu. December 22 | 08:30 | Gross Domestic Product (GDP) | Q3 | NA |
| 2.0% | Moderate | Thu. December 22 | 08:30 | Jobless Claims (Initial) | 12/17 | NA |
| NA | Moderate | Fri. December 23 | 08:30 | Durable Goods Orders | Nov | NA |
| -0.5% | Moderate | Fri. December 23 | 08:30 | New Home Sales | Nov | NA |
| 307K | Moderate | Fri. December 23 | 08:30 | Personal Income | Nov | NA |
| 0.4% | Moderate | Fri. December 23 | 08:30 | Personal Spending | Nov | NA |
| 0.1% | Moderate | Fri. December 23 | 08:30 | Personal Consumption Expenditures and Core PCE | Nov | NA |
| 0.1% | HIGH | Fri. December 23 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA |
| 1.7% | HIGH |
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The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.
As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you. |
For the week of Nov 21, 2011 --- Vol. 9, Issue 47 |
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Last Week in Review: There was more negative news out of Europe and some positive economic news here in the US. But how did home loan rates fare? Forecast for the Week: There will be plenty of news to gobble up before the Thanksgiving holiday, with reports on the housing market, the state of the economy, inflation, consumer sentiment, and more. View: Planning to do some shopping on Black Friday? Be sure to check out these tips first. |
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They say it takes two to tango.... And Stocks and Bonds continue to battle for investing dollars and trade in seesaw fashion. What's causing this dance in the markets? Read on for details.  First, there was more pessimistic news out of Europe last week, as German leader Angela Merkel said that Europe is going through its toughest times since World War II, plagued by political unrest and a severe debt crisis. Reports showed there was a slowing in manufacturing to the point where recession fears have now gripped Europe.
Here lies another enormous problem for Europe: One way--and probably the biggest way--to lower government deficits, is to grow your way out and elevate Gross Domestic Product (GDP). However, many of the Southern Europe economies are on the brink of recession, which will make lowering the deficit through economic growth impossible. So what does all of this mean for home loan rates here in the United States? The problems in Europe should continue to support the US Dollar and US Bonds (including Mortgage Bonds, on which home loan rates are based) to some degree, as investors will view our Bonds as a safe haven for their money. Yet, if we continue to see better-than-expected economic data here like we did last week, this will offset the continued uncertainty surrounding the European crisis. And this is part of the reason that the Bond markets and home loan rates saw limited gains last week. Some of the good news last week included tamer than expected wholesale inflation in the form of the Producer Price Index (PPI) and improved New York Manufacturing. Also, as you can see from the chart, the year-over-year headline Consumer Price Index (CPI) was down from the previous reading, which is good news for people concerned about inflation. However, the closely watched Core CPI rose by 0.1%, and though this was inline with estimates, it did push the year-over-year rate to 2.1% from 2%...a touch above the Fed's comfort zone. The bottom line is that home loan rates are still near historic lows, which means now remains a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients. |
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This Thursday, all capital markets will be closed in observance of Thanksgiving, and Friday will be a shortened session. But we'll still see a cornucopia of economic indicators reported in just three days: - Existing Home Sales will be released on Monday. The report comes after last week's positive reports on Housing Starts and Building Permits, which signaled a glimmer of hope to the battered housing sector.
- The second read on Gross Domestic Product (GDP) for the 3rd Quarter will be delivered on Tuesday. The initial reading showed a somewhat healthy 2.5% increase. Also, look for the Durable Goods Report on Wednesday, which gives us a read on big-ticket items and a sense of how the economy is doing.
- The Consumer Sentiment Index will be released on Wednesday just in time for traders to square up positions ahead of the long holiday weekend.
- Also released on Wednesday will be the Fed's favorite gauge on inflation, the Core Personal Consumption Expenditure, as well as Personal Incomes and Spending.
- Finally, this week Initial Jobless Claims will be delivered on Wednesday rather than Thursday due to the Thanksgiving holiday. Claims have been below 400,000 for the previous three weeks, signaling that there may be a light at the end of the tunnel in the Labor markets.
In addition to those reports, the Fed's Federal Open Market Committee meeting minutes from November 2nd could have some surprises when released at 2 pm ET on Tuesday. Last week, the New York Fed leader William Dudley said that it would make sense for the Fed to begin purchasing Mortgage Backed Securities. The minutes could reveal if the members discussed the topic. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, the problems in Europe tempered the impact that strong economic news in the US had on Bonds and home loan rates. This dynamic will be something to watch closely in the weeks ahead. Chart: Fannie Mae 3.5% Mortgage Bond (Friday Nov 18, 2011) |
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Black Friday Do's and Don'ts
These tips will help you get the best deals as you do your holiday shopping -- even if you don't plan on braving the stores the day after Thanksgiving. By Cameron Huddleston, Kiplinger.com Black Friday - the day after Thanksgiving that traditionally signals the beginning of the holiday shopping season because stores offer deep discounts that draw large, deal-hungry crowds - is just a couple of days away. Are you ready? If you're a Black Friday pro who lines up outside stores every year before the crack of dawn to nab bargains, you're probably already planning your strategy - and we can help. If you savor your sleep and sanity, you're probably not even thinking about stepping in a store November 25. But keep in mind that you don't have to brave the crowds to take advantage of Black Friday sales. These Black Friday do's and don'ts will help you score the best deals - whether you want to shop from home in your pajamas or venture out to the stores (perhaps in something other than PJs). DON'T rely solely on leaked ads to plan your Black Friday strategy. Plenty of Web sites specialize in publishing Black Friday ads before they appear on retailers' Web sites or in newspapers. You can use these leaked ads as a starting point for planning your purchases, but realize that you're reading gossip, says Dan de Grandpre, CEO of dealnews.com, one of our favorite deal sites. Inevitably, some of the information in leaked ads is wrong, he says. Most legitimate ads aren't published until the Sunday before Black Friday. DO expect some Black Friday sales to start on Thursday. Many retailers will start offering discounts online on Thanksgiving day. And some, such as Amazon, will offer Black Friday deals several days before November 25 -- so hot items may sell out before the big shopping day after Thanksgiving. DON'T assume the best deals are in the stores. It's a tradition for a lot of people to get up at the crack of dawn and camp out in front of stores to scoop up deals. But de Grandpre says a lot of doorbusters (those deeply discounted items retailers use to get consumers in the door early Friday) will be available online, too -- especially on big-ticket products. And if an Apple product is on your gift list, you'll probably find it for less online (at Amazon.com, MacMall.com or McConnection.com) than at an Apple store -- and you may escape sales tax on your purchase. DO brave the crowds if you're trying to snag an extremely limited item . You have a better chance of getting the deal if you go to the store - and are first in line. Keep in mind, though, that items that are marked down dramatically are cheap items to begin with - not top-selling, name-brand products, de Grandpre says. DON'T do all your holiday shopping on Black Friday. Consider the Friday after Thanksgiving as one of several days to find deals. The best deals on apparel usually appear on Cyber Monday (November 28 this year), when retailers discount items online. Toys will be cheaper the first two weeks of December when Walmart and Amazon go to war with each other to offer the lowest prices and clear out inventory before Christmas, de Grandpre says. And the best deals on name-brand TVs and luxury items can be found in early December, too. DO check return policies. Some retailers tighten their policies around the holidays. Some charge restocking fees if you bring an item back. And some won't let you exchange items that were manufactured specifically for Black Friday (to be sold at a low price). So be sure to ask each store what its policy is, and hang on to your receipts. DON'T spring for extended warranties on big-ticket items. There's a good chance that a salesperson will try to talk you into paying extra for an extended warranty if you purchase a big-ticket item on Black Friday. That's because revenue from extended warranties helps make up for lost profits on discounted items. Typically, you'll pay 10% to 20% more for an item to extend a one-year manufacturer's warranty through the fifth year of ownership. But most major appliances do not break down within the extended-warranty period. Plus, you might already be covered if you use your credit card to purchase an item (see What You Need to Know About Warranties). AND FINALLY … DON'T wait until the week before Christmas to shop. Retailers often raise prices because supplies are limited and they know that last-minute shoppers will pay more to purchase all the items on their gift lists. Reprinted with permission. All Contents ©2011 The Kiplinger Washington Editors. www.kiplinger.com. Economic Calendar for the Week of November 21 - November 25 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | Mon. November 21 | 10:00 | Existing Home Sales | Oct | 4.85M | | 4.91M | Moderate | Tue. November 22 | 08:30 | Gross Domestic Product (GDP) | Q3 | 2.5% | | 2.5% | Moderate | Tue. November 22 | 08:30 | GDP Chain Deflator | Q3 | 2.5% | | 2.5% | Moderate | Tue. November 22 | 02:00 | FOMC Minutes | 11/2 | | | | HIGH | Wed. November 23 | 08:30 | Durable Goods Orders | Oct | -1.0% | | -0.6% | Moderate | Wed. November 23 | 08:30 | Personal Consumption Expenditures and Core PCE | Oct | NA | | 1.6% | HIGH | Wed. November 23 | 08:30 | Personal Consumption Expenditures and Core PCE | Oct | 0.1% | | 0.1% | HIGH | Wed. November 23 | 08:30 | Personal Income | Oct | 0.3% | | 0.1% | Moderate | Wed. November 23 | 08:30 | Personal Spending | Oct | 0.3% | | 0.6% | Moderate | Wed. November 23 | 08:30 | Jobless Claims (Initial) | 11/19 | 391K | | 388K | Moderate | Wed. November 23 | 10:00 | Consumer Sentiment Index (UoM) | Nov | 64.2 | | 64.2 | Moderate |
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The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors. As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you. |
For the week of Nov 07, 2011 --- Vol. 9, Issue 45 |
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Last Week in Review: The volatility out of Europe continued, along with the arrival of Friday's Jobs Report for October. Forecast for the Week: It's a quiet week when it comes to economic reports, plus the Bond Market is closed Friday for Veterans Day. View: Don't miss these special deals in honor of America's veterans. |
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"The only things we can be sure of are death and taxes." Benjamin Franklin. And lately, volatility in the markets is another certainty...and last week was no exception. Read on to learn about the week's big newsmakers, and what they meant for home loan rates.  Friday's Jobs Report from the Bureau of Labor Statistics was a big market mover, showing that 80,000 jobs were created in October, which was just slightly below expectations. In addition, 104,000 private sector jobs were created, also just below expectations while the unemployment rate dropped to 9%, from a previous reading of 9.1%. A big positive in the report was once again upward revisions to prior month's readings, which showed 102,000 more jobs created in the two previous months than what was originally reported.
The takeaway from the report is that it doesn't appear the economy is slipping into another recession...at least not yet. The labor market continues to create jobs, but at a very slow and uneven pace. Until we see significant job growth--north of 150,000 each month, for a sustained amount of time--we won't see meaningful improvement in the economy or the unemployment rate. This turn means that rates should continue to hover at low levels, albeit in a volatile fashion. Also limiting how high our rates can go is the ongoing European drama. The removal of the referendum (Greek Prime Minister George Papandreou had announced he would put the Euro rescue plan to a referendum or vote amongst the Greek people) is one piece of uncertainty taken away from the market--and that was a big one. However, there are still so many things that can and probably will go wrong until the European leaders put a big, realistic, attainable solution into action. For instance, Italy's Bond yields continue to inch higher, suggesting that their debt problems won't easily be solved and continue to creep towards an unmanageable state. Plus, Fed Chairman Ben Bernanke said Wednesday during his speech after the regularly scheduled meeting of the Federal Open Market Committee that purchases of Mortgage Bonds are being considered--which is another factor that could benefit home loan rates. The bottom line is that home loan rates are still near historic lows, which makes now a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients. |
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While the Stock Markets are open Friday, the Bond Market will be closed in honor of Veterans Day. And with fewer economic reports this week--and with earnings season essentially behind us-the Bond Market will take direction from a number of factors. - The first major report will be released on Thursday when Weekly Jobless Claims are reported. Last week's report showed that weekly claims fell below 400,000 to 397,000, which was better than the 401,000 that was expected.
- The markets will also get a new read on how American consumers feel about the economy with the Consumer Sentiment Index on Friday.
In addition to those reports, the headlines coming out of Europe will continue to influence the markets here in the US, including Bonds and, as a result, home loan rates. Also, this week's Treasury auctions totaling $72 Billion could be a big market mover, depending on how they're received. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates were able to take advantage of the decrease in Stocks last week, due in part to the uncertainty out of Europe. I'll be monitoring this situation closely in the weeks ahead. Chart: Fannie Mae 3.5% Mortgage Bond (Friday Nov 04, 2011) |
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Meals and Deals for Veterans Day! This Friday, November 11, 2011 is Veterans Day. That means it's the perfect opportunity to honor America's veterans for their patriotism, love of country, and commitment to serve and sacrifice for the common good of the USA. Need a few ideas of what to do? What if you could go out to eat…go to an amusement park… and much more for free or a special discount? Well, if you're a Veteran, you can! Don't Plan Your Day Until You Read This Believe it or not, hundreds of companies around the country offer special Veterans Day deals, including: - Applebee's
- Chili's
- Denny's
- Golden Corral
- McCormick & Schmick's
- Subway
- Lowe's
- Home Depot
- Anheuser-Busch Parks
- National Parks
- Amazon
- Seven-Eleven
- And many, many more!
Look No Further The best part is that you can find the details about all these deals in one place! Just visit The Military Wallet's listing for up-to-date Veterans Day free meals and discounts! And happy Veterans Day to all the men and women who have served our country in the past…and continue to guard our nation! Economic Calendar for the Week of November 07 - November 11 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | Thu. November 10 | 08:30 | Jobless Claims (Initial) | 11/5 | NA |
| NA | Moderate | Fri. November 11 | 10:00 | Consumer Sentiment Index (UoM) | Nov | NA |
| 60.9 | Moderate |
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The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.
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For the week of Oct 31, 2011 --- Vol. 9, Issue 44 |
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Last Week in Review: Historic news out of Europe, plus Stocks make history. Forecast for the Week: The Fed meets, and Friday brings big Job news-will the numbers give the markets a scare? View: Changes are coming to the Home Affordable Refinance Program. Find out what this means for homeowners. |
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Trick or treat? Last week, there was big news out of Europe, as an agreement was reached to help keep Greece from going into default. But will this deal mean a frightful time is ahead for Bonds and home loan rates? Read on for more details.  On Thursday, the world was cheering on the news that a deal in Europe was reached, with private banks and other holders of Greek debt accepting a 50% haircut on their principal investment. Once the write down takes place, Banks who are holding Greek debt will have to recapitalize themselves by year-end, and government support will be available to fill voids that private money won't fill. In addition, the Economic Financial Stability Facility (EFSF) rescue fund, which currently has $443 Billion in holdings, will be expanded and leveraged to $1 Trillion Euros or $1.4 Trillion US Dollars.
So the agreement is together…but like any effective plan, it now has to be put into action. And as this rolls out, the financial markets will be watching every step. When the sentiment is positive, like it was the day the plan was announced, Stock markets could benefit as investors would seek to take advantage of gains. In fact, the Stock markets are set to have their biggest monthly gains on record as October comes to an end. The closely watched S&P 500 Index is up 13.5% for the largest increase since October of 1974, while the Dow Jones advance of 12% is the biggest gain since January of 1987. Optimism surrounding the European crisis, positive economic data and better than expected earnings reports have fueled the rally. So what does all of this mean for Bonds and home loan rates? The deal that was reached in Europe is historic, and good news for the world's economies overall. However, the plan has yet to be put into action-and then it has to work. And if there are hiccups or issues along the way, Bonds and home loan rates could benefit with some renewed safe haven trading. We saw a little of that late last week, when Friday's less than stellar Italian Bond auction reminded the world that the European debt crisis is not yet entirely resolved. The most important thing to keep in mind is that now remains a great time to purchase or refinance a home, as home loan rates are still near historic lows. Let me know if I can answer any questions at all for you or your clients. |
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Major economic data is set to impact trading behavior this week…with manufacturing and employment leading the way: - Manufacturing headlines will be in the spotlight this week with the Chicago PMI on Monday, followed by the ISM Index on Tuesday. Worker Productivity is also set for release on Thursday.
- The ADP Employment Report will be the first of two key releases to gauge the labor markets. Watch for ADP to be released on Wednesday.
- As usual, Weekly Jobless Claims will be delivered on Thursday. Last week's report showed that people filing for first-time benefits still remain above the 400,000 level.
- Friday's Jobs Report data will garner the most attention as the Labor Department reveals how many new jobs were created in October. Last month's gain of 103,000 new workers was positive.
In addition to the reports above, the Fed Meeting begins on Tuesday and ends Wednesday with the Fed's monetary policy statement. The housing markets will be scrutinizing that statement for any rhetoric that involves possible new purchases of Mortgage Backed Securities to keep home loan rates near record lows. Recently, several Fed members have stated that the Fed needs to support the housing markets and not to see elevated borrowing costs. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates worsened in October as Stocks had one of their best months on record. But rates remain near historic levels, and I'll be watching closely to see what happens as we move into November. Chart: Fannie Mae 3.5% Mortgage Bond (Friday Oct 28, 2011) |
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The President's New Plan for Homeowners You may have heard that President Obama plans to open up refinancing to more homeowners who are underwater. If you've been hearing questions about this program or are just curious about what the plan involves, here are some of the major highlights: What's Really New? First, it's important to realize that the president's proposal is not a new program, but a revision to the current Home Affordable Refinance Program (HARP). However there are some big changes that you can let people know if they ask you. Refinance…No Matter How Underwater Now homeowners can refinance no matter how underwater they are! Before homeowners could only refinance if they were 25% or less underwater, and even then many banks only let people who were 5% or less underwater refinance. No Appraisal Necessary? With the program's revision, it's possible that an appraisal won't have to be performed. That's great news because it can help people save time and money. But this is only the case if Fannie Mae or Freddie Mac can electronically estimate the value through their valuation models. But Keep in Mind… These updates to HARP apply only to people whose mortgage is currently secured by Fannie Mae or Freddie Mac...and whose loan was securitized by Fannie Mae or Freddie Mac prior to May 31, 2009. So the chances are that people who have refinanced since May 2009 will not qualify to refinance under the HARP revision. What's Next? As of now, the revisions to HARP have been proposed by President Obama and the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac. This directive has been given to Fannie Mae and Freddie Mac, and they now have until November 15, 2011 to give guidance and details regarding how these changes will be run. If you or someone you know has a question about what these changes mean, call or email me anytime. I'm always happy to help. Economic Calendar for the Week of October 31 - November 04 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | Mon. October 31 | 09:45 | Chicago PMI | Oct | NA |
| 60.4 | HIGH | Tue. November 01 | 10:00 | ISM Index | Oct | NA |
| 51.6 | HIGH | Wed. November 02 | 08:15 | ADP National Employment Report | Oct | NA |
| 91K | HIGH | Wed. November 02 | 02:15 | FOMC Meeting | Nov | NA |
| NA | HIGH | Thu. November 03 | 08:30 | Productivity | Q3 | NA |
| -0.7% | Moderate | Thu. November 03 | 10:00 | ISM Services Index | Oct | NA |
| 53.0 | Moderate | Thu. November 03 | 08:30 | Jobless Claims (Initial) | 10/29 | NA |
| NA | Moderate | Fri. November 04 | 08:30 | Non-farm Payrolls | Oct | NA |
| 103K | HIGH | Fri. November 04 | 08:30 | Unemployment Rate | Oct | NA |
| 9.1% | HIGH | Fri. November 04 | 08:30 | Hourly Earnings | Oct | NA |
| 0.2% | HIGH | Fri. November 04 | 08:30 | Average Work Week | Oct | NA |
| 34.3 | HIGH |
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The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors. |
For the week of Oct 17, 2011 --- Vol. 9, Issue 42 |
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Last Week in Review: Good news at home and abroad impacted the markets and home loan rates last week. Find out how. Forecast for the Week: Earnings season is in full swing, plus look for big news on manufacturing, housing, and inflation. View: Wondering about the outlook for the housing and mortgage markets in 2012? Be sure to read the article below. |
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“It’s a small world after all.” And that proved especially true last week, as our markets were impacted by news at home and news from overseas. Here are the highlights.  First, there was some good news on the economic front in the U.S. as Retail Sales for September rose by 1.1%, above the 0.6% expected and the highest increase in seven months. Remember good economic news typically benefits Stocks at the expense of Bonds (including Mortgage Bonds, to which home loan rates are tied), as investors move their money from the safety of Bonds into Stocks to try and take advantage of gains.
And good news here wasn’t the only thing that pressured Bonds and home loan rates last week. The European Central Bank (ECB) said they will announce a plan by early November for addressing the Greek debt crisis and make recapitalizing their banks a priority. As part of this plan, the International Monetary Fund is going to dedicate more resources to help the European debt crisis. A lot of money is needed to make investors feel confident that the debt crisis will be contained, so investors saw this as positive news. So what does this mean for Bonds and home loan rates? Should the overall present optimistic tone continue, Bonds and home loan rates could face additional pressure. However, if there is pessimistic or uncertain news, investors may return to the safe haven of Bonds, meaning home loan rates could benefit. We did see a little of this trend last week when there was word that China's exports came in lower than expectations, which brought concern that global growth could continue to slow.
Either way, the volatility is sure to continue so the most important thing to remember is that now is still a great time to purchase or refinance a home, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.
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Manufacturing, inflation, and housing reports dominate the news this week: - The manufacturing sector accounts for one-quarter of the economy, so it’s especially important during the current economic situation. This week, the New York State Empire Manufacturing Index as well as Industrial Production and Capacity Utilization will be released on Monday. Later in the week, the Philadelphia Fed Index will be reported on Thursday.
- Inflation news from the Producer Price Index (PPI) and the Consumer Price Index (CPI) will be delivered on Tuesday and Wednesday respectively. The last report on consumer inflation was a bit hotter than expected, so Bond market players will be closely watching those reports.
- Housing Starts will be reported on Wednesday and on Thursday Existing Home Sales will be delivered.
- The weekly Initial Jobless Claims report will be released on Thursday. As of last week’s report, they continue to remain above the 400,000 level.
Plus, earnings season is in full swing this week. Some big names reporting earnings are Citigroup, Bank of America, Coca-Cola, Apple, and AT&T. If the reports come in better than expected, it could push investing dollars over to the Equity markets. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates faced pressure last week but remained above a key technical level. I’ll be watching the markets closely this week to see what happens. Chart: Fannie Mae 3.5% Mortgage Bond (Friday Oct 14, 2011) |
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The Housing and Mortgage Markets in 2012 Last week, the Mortgage Bankers Association (MBA) released its outlook for the housing and mortgage markets in 2012. Overall, the news is mixed, but there’s some good news to glean out of it. Here are three positive elements in the MBA forecast that you should know about: 1. Home Sales Steady Before Slight Increase The MBA expects total existing home sales will stay around the 4.9 million unit pace for 2011 and 2012. But in 2013, the MBA expects home sales to increase slightly to 5.2 million units, as the broader economy recovers. New home sales are expected to be similar to the overall trend. As the MBA stated in its release: “The recovery in the new home sales will have a comparably slow start…but will show some meaningful increases in 2013.” 2. Slight Growth in Home Purchases Despite an expected decrease in refinances, the MBA forecasts some slight growth in the number of mortgages for home purchases. Specifically, the MBA anticipates home loans for purchases to increase to $412 Billion in 2012, which would be up from the anticipated 2011 total of $400 Billion. Better still, the MBA expects home loans for purchases to jump significantly to $700 Billion in 2013 as the economy, home sales, and home prices are all anticipated to pick up. 3. Rates to Remain Low Overall, fixed home loan rates are expected to remain low by historical standards. The MBA expects rates to end 2011 around a 4.5 percent average, and then possibly dropping slightly to 4.4 percent at some point in 2012. But by 2013, the MBA expects rates to climb back up to 4.9 percent – which is still low by historical standards but does indicate a change in direction. As always, forecasts can change based on numerous factors not just in the U.S., but also in the global markets. And while the MBA forecast does contain some negative aspects for the markets, it does hold some slightly positive aspects as well. Economic Calendar for the Week of October 17 - October 21 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | Mon. October 17 | 08:30 | Empire State Index | Oct | NA |
| -8.82 | Moderate | Mon. October 17 | 09:15 | Industrial Production | Sept | NA |
| 0.2% | Moderate | Mon. October 17 | 09:15 | Capacity Utilization | Sept | NA |
| 77.4% | Moderate | Tue. October 18 | 08:30 | Producer Price Index (PPI) | Sept | NA |
| 0.0% | Moderate | Tue. October 18 | 08:30 | Core Producer Price Index (PPI) | Sept | NA |
| 0.1% | Moderate | Wed. October 19 | 02:00 | Beige Book |
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| Moderate | Wed. October 19 | 08:30 | Building Permits | Sept | NA |
| 620K | Moderate | Wed. October 19 | 08:30 | Housing Starts | Sept | NA |
| 571K | Moderate | Wed. October 19 | 08:30 | Core Consumer Price Index (CPI) | Sept | NA |
| 0.2% | HIGH | Wed. October 19 | 08:30 | Consumer Price Index (CPI) | Sept | NA |
| 0.4% | HIGH | Thu. October 20 | 08:30 | Jobless Claims (Initial) | 10/15 | NA |
| NA | Moderate | Thu. October 20 | 10:00 | Existing Home Sales | Sept | NA |
| 5.03M | Moderate | Thu. October 20 | 10:00 | Philadelphia Fed Index | Oct | NA |
| -17.5 | HIGH | Thu. October 20 | 10:00 | Index of Leading Econ Ind (LEI) | Sept | NA |
| 0.3% | Low |
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The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors. |
For the week of May 16, 2011 --- Vol. 9, Issue 20 |
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Last Week in Review: Inflation is heating up, but what does that mean for home loan rates? Forecast for the Week: Thursday will be an especially busy day when it comes to reports this week, with news on jobs, housing, and manufacturing. View: Ever experience "brain fog?" Check out three great tips for boosting your brainpower. |
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"Is the glass half empty... or half full?" That question is one many people are debating when it comes to our economy - yes, the economy is still sluggish... but the slow recovery has helped home loan rates improve. So what developed last week...and what was the impact on home loan rates? Let’s take a deeper look. First, on the inflation front: 6.8%...that's the current year-over-year rate of Producer or Wholesale inflation. And that is hot - very hot! And while Producer or Wholesale inflation doesn't always get passed onto the consumer as evidenced by the relatively benign Consumer Price Index (CPI) inflation readings, at some point one of two things must happen. - Businesses who are burdened with increased costs must pass the increase to the consumer by raising prices, thus boosting consumer inflation.
- If businesses aren’t in a position to raise prices because of weak consumer demand, they must absorb the increased costs...thereby lowering earnings and the ability to expand, thus furthering the present slow economic growth.
The takeaway here: One of the Fed's goals for their second round of Quantitative Easing (QE2) was to create inflation and avoid deflation in the hopes of strengthening our economic recovery. It appears that they have been somewhat successful in this goal, as the risks for deflation have somewhat abated. But remember, inflation is the arch enemy of Bonds and home loan rates. If inflation continues to heat up, this could hinder further improvement in home loan rates. It’s also important to note that inflation in China is also on the rise, and inflation abroad becomes inflation here in the US as we import so many items from China. China's buying of our debt has helped keep our home loan rates relatively low for a long time. Home loan rates would likely move higher if China not only slows buying, but were to start selling some of their near $900 Billion worth of U.S. government debt holdings.  And speaking of our debt, Republicans in the U.S. House of Representatives are increasingly dismissive of Treasury Secretary Tim Geithner's warnings that Congress must raise the debt limit prior to August 2nd or risk economic "catastrophe." This will be an important development to watch in the weeks to come. The bottom line is that, on the glass half full side of things, home loan rates still remain near some of the best levels we’ve seen this year. If you have been thinking about purchasing or refinancing a home, call or email me to learn more about why now is a great time to benefit from today’s historically low rates. Or forward this newsletter on to someone you know who may benefit. |
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This week, Thursday will be an especially busy day when it comes to economic reports. Be sure to look for: - A double dose of housing news, first with Tuesday’s news about Housing Starts and Building Permits for April, followed by the Existing Home Sales Report on Thursday.
- Job news with Thursday’s weekly Initial and Continuing Jobless Claims Report. Last week’s Initial Claims were 434,000, above expectations of 423,000 and solidly above the 400,000 mark. Staying below 400,000 is so important in order to put a dent in the stubbornly high unemployment rate.
- Manufacturing news with Thursday’s Philadelphia Fed Index, which is considered an important indicator of the manufacturing industry.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates were unable to improve past an important technical level and on the hot inflation news. I’ll be watching closely this week to see if Bonds and rates can break through this resistance and improve.
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Boost Your Brainpower - and Happiness - with 3 Simple Steps It's easy to believe that your intelligence is set, meaning there's no way to "boost" your brainpower. However, many scientific studies have proven the exact opposite. A combination of lifestyle adjustments and mental exercises has been shown to not only increase intelligence, but also to improve general brain health and help prevent disorders associated with aging, such as Alzheimer's disease. According to most neurologists, the key is to stay mentally active, despite your age. The brain is a complex organ, able to create new connections between nerve cells when it is properly stimulated. These connections lend themselves to optimal brain function and increased intelligence. Whether you're a Generation Xer, a baby boomer, or an octogenarian, the following tips can help boost your mental activity and increase your intelligence: 1. Keep Memorizing. There is no shortage of contemporary studies that show a powerful correlation between a strong working memory and overall intelligence. A good memory has also been shown to slow down mental aging. Ergo, memorizing almost anything is one of the best exercises you can give your brain. Start small by memorizing your shopping list or your daily schedule. Step it up a notch and memorize a poem or two. Take it to another level by learning a musical instrument or a new language. Doing any of these exercises can potentially lead to quick and substantial improvement in your mental sharpness. 2. Get a Hobby. Gardening, bird watching, collecting, flying model airplanes, etc.; taking on any new hobby is good for mental stimulation as well as your overall mood. Finding activities you really enjoy allows you to learn and have fun, simultaneously. It provides both an escape and a passion. All of these traits are components to living a happy and rewarding life, and remaining mentally sharp. 3. Challenge Yourself. One enemy of intelligence and mental sharpness is our propensity to fall into overly rigid, daily patterns. It is one thing to keep a schedule or to plan out the events of your day. What we're talking about is having the exact same routine, nearly every day. Falling into rigid patterns promotes mental passivity, or the opposite of stimulation. So try mixing things up a bit. Challenge yourself by participating in new activities. Join a softball league, a reading club, or even a theater group. At the very least, play around with your daily schedule. The point is that too much regimen can dull the senses. Start implementing these easy steps today to bring sharpness, clarity, and happiness into your life!
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Economic Calendar for the Week of May 16-20, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of May 16 - May 20 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. May 16 | 08:30 | Empire State Index | May | 18.0 | | 21.7 | HIGH | | Tue. May 17 | 08:30 | Housing Starts | Apr | 563K | | 549K | Moderate | | Tue. May 17 | 08:30 | Building Permits | Apr | 590K | | 594K | Moderate | | Tue. May 17 | 09:15 | Capacity Utilization | Apr | 77.7% | | 77.4% | Moderate | | Tue. May 17 | 09:15 | Industrial Production | Apr | 0.5% | | 0.8% | Moderate | | Thu. May 19 | 08:30 | Jobless Claims (Initial) | 5/14 | 420K | | 434K | Moderate | | Thu. May 19 | 10:00 | Existing Home Sales | Apr | 5.20M | | 5.10M | Moderate | | Thu. May 19 | 10:00 | Philadelphia Fed Index | May | 18.0 | | 18.5 | HIGH | | Thu. May 19 | 10:00 | Index of Leading Econ Ind (LEI) | Apr | 0.0% | | 0.4% | Low |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% -0- Points 15 Yr Fixed 4.000% -0- Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.000% -0- Points 5/1 Arm 3.875% -0- Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.500% -0- Points 5/1 ARM 3.500% -0- Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
NMLS# 404172
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
For the week of May 09, 2011 --- Vol. 9, Issue 19 |
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Last Week in Review: Find out the story behind the latest employment numbers - and what they mean to home loan rates. Forecast for the Week: Don’t let the slow start fool you! Find out why the second half of this week is so important. View: Thinking about a vacation or business trip? Read what Bin Laden’s death means to travelers! |
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"LIFE IS A MIXED BLESSING, WHICH WE VAINLY TRY TO UNMIX" - author and journalist Mignon McLaughlin. The labor market and the economy saw their own mixed blessings last week, when three different employment reports were released. Unlike Mignon McLaughlin’s quote above about life, these mixed job reports can actually be untangled. So let’s break down what we learned about employment last week...and, just as importantly, what’s going on with home loan rates.  After two disappointing employment reports earlier last week - in the form of the ADP National Employment Report and the Initial Jobless Claims Report - the labor market finally received some good news on Friday when the Labor Department released their official Jobs Report that showed 244,000 jobs were created in April. That was far above all expectations... and it was the biggest private job increase since 2006! But where did this number come from... and is it accurate? This headline number comes from the Current Population Survey, which uses the birth/death model to guesstimate the amount of jobs lost or gained in different industries - based on how many businesses were "born" or "died." And it isn't until we get revisions to the previous month's reports that we get a more accurate and final number. Furthermore, history has shown that the birth/death model used to estimate is lagging - and at the start of an improving labor market, like we are seeing, the future revisions will likely show more jobs created than previously reported. This dynamic was evident in this month's Jobs Report, as revisions to March showed that an additional 46,000 jobs were created. Despite the better-than-expected number of jobs created, the Unemployment Rate ticked up to 9% from 8.8%. The data for the Unemployment Rate comes from an entirely different survey - which is called the Household Survey - and is a bit contradictory to the headline news. This shows that the jobs being created simply aren't enough to have yet made a significant dent in the number of jobless Americans. Also in the Jobs Report, Average Hourly Earnings were reported up by 0.1% to $22.95 per hour. Hourly earnings have increased by 1.9% year over year, just not enough to create "wage-based inflation," which is where employers have to pump up the prices of their goods and services to cover increased wages. So this was somewhat Bond-friendly news. Although the Jobs Report was mixed, the overall positive tone does validate that the labor market is gradually improving. As the labor market improves, so will the economy and housing - and with that, interest rates will gradually rise as well. In the short run, the recent rise in Bonds is encouraging. However, after such a strong run higher, it would not be surprising to see more downside follow through in Bonds - which could mean higher home loan rates. The good news is that home loan rates recently reached some of the best levels so far in 2011 - and rumors on Friday that Greece may leave the European Union helped Bonds, as traders sought a safe haven. That means a window has opened up... but there’s one important point you should understand. It’s important to note that the last time rates hit this level, they jumped significantly higher from here. What’s more, signs of inflation are beginning to creep into our economy, which never bodes well for home loan rates. And if the rumors of Greece leaving the European Union turn out to be untrue (as Greece has stated), the safe haven bounce we saw last Friday could quickly be erased. That’s why it’s important to take action now. It doesn’t cost anything to check out your situation, and the choice of moving forward or not will be up to you. Don’t miss this window of opportunity to save significantly on your monthly budget. Call or email today to take a look. |
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This week starts out a little slow, but don’t let that fool you: - Heavy amounts of long-term debt will be issued this week in Treasury Auctions. Those auctions will equal $72 Billion with $24 Billion in 10-year Notes and $16 Billion in 30-year Bonds. With rates having moved to the best levels of 2011, we may see tepid buying interest for securities at these rates.
- Inflation reports will be in the news again this week, with the Producer Price Index (PPI) on Thursday and the Consumer Price Index (CPI) on Friday. Last month, these reports indicated that inflation is on the rise, but it remains somewhat tame for the moment in terms of what consumers are experiencing. With so much concern over the possibility of future inflation, you can bet the markets will be watching these reports closely - as will I.
- Retail sales will also be released on Thursday. This is the most timely indicator of broad consumer spending patterns.
- Thursday we’ll also see the weekly Initial and Continuing Jobless Claims Report. Last week, Initial Jobless Claims came in at 474,000 which, unfortunately, was well above the 400,000 that was expected, and also the highest level in 9 months.
- The Consumer Sentiment Index is due out on Friday. This index is important because the level of consumer sentiment is directly related to the strength of consumer spending, which accounts for two-thirds of the economy
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates improved to reach the best levels of 2011. But the last time they reached this level, they jumped significantly. That means now may be the perfect window to take advantage of low home loan rates. |
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What Bin Laden's Death Means for Travelers Take the proper precautions now that there is a heightened security risk. By Cameron Huddleston, Contributing Editor, Smart Traveler Enrollment Program. The free program provides travelers with current information about the country they're visiting, including warnings about long-term conditions that make a country dangerous and alerts about short-term conditions that pose risks to Americans traveling overseas. The information you provide about your trip when you enroll also will allow the State Department to better assist you in case of an emergency. To learn more about the type of assistance you can receive, see What the State Department Can and Can't Do in a Crisis. If you're booking travel overseas, consider paying a little extra for travel insurance. A standard trip-cancellation policy will cover nonrefundable, prepaid costs if you have to cancel or interrupt a trip because of a terror attack in any of the cities on your itinerary. To be reimbursed, the event must be declared a terrorist attack by the U.S. government and must occur within 30 to 90 days (depending on the policy) of your planned travel, says Vikki Corliss, a spokesperson for InsureMyTrip.com. Travel insurance does not cover civil unrest or foreseen events. Even though the State Department has issued a worldwide travel warning, travel insurance underwriters will not view terror attacks as foreseen events and will provide coverage as usual, Corliss says. To learn more about the cost and what is -- and is not -- covered, see The Case for Travel Insurance. And to compare plans, visit InsureMyTrip.com, TravelGuard.com or SquareMouth.com. Reprinted with permission. All Contents ©2011 The Kiplinger Washington Editors. www.kiplinger.com. Economic Calendar for the Week of May 9-13, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of May 09 - May 13 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Thu. May 12 | 08:30 | Jobless Claims (Initial) | 5/07 | 423K | | 474K | Moderate | | Thu. May 12 | 08:30 | Producer Price Index (PPI) | Apr | 0.5% | | 0.7% | Moderate | | Thu. May 12 | 08:30 | Core Producer Price Index (PPI) | Apr | 0.2% | | 0.3% | Moderate | | Thu. May 12 | 08:30 | Retail Sales | Apr | 0.6% | | 0.4% | HIGH | | Thu. May 12 | 08:30 | Retail Sales ex-auto | Apr | 0.4% | | 0.8% | HIGH | | Fri. May 13 | 08:30 | Consumer Price Index (CPI) | Apr | 0.4% | | 0.5% | HIGH | | Fri. May 13 | 08:30 | Core Consumer Price Index (CPI) | Apr | 0.1% | | 0.1% | HIGH | | Fri. May 13 | 10:00 | Consumer Sentiment Index (UoM) | May | 69.8 | | 69.8 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% -0- Points 15 Yr Fixed 4.000% -0- Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.000% -0- Points 5/1 Arm 3.875% -0- Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.500% -0- Points 5/1 ARM 3.500% -0- Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
NMLS# 404172
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
| For the week of May 02, 2011 --- Vol. 9, Issue 18 |
Last Week in Review: Fed Chairmen Ben Bernanke spoke...and I was listening. Learn what he said, and what this could mean for home loan rates. Forecast for the Week: The job market labors on, but will Friday’s Jobs Report for April be painful? View: Ever wondered how healthy your neighborhood is? There’s an easy way to find out! |
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"SLOW AND LOW, THAT IS THE TEMPO..." Just like these lyrics from the "Beasties Boys" song, slow and low have been the tune for the Bond market recently, as we’ve seen our slow economy cause home loan rates to move lower recently. What’s been happening, and where are the economy and rates headed? Read on to learn more.  The search for answers begins with last week’s regularly scheduled meeting of the Federal Open Market Committee (FOMC), which was followed on Wednesday by the historic, first-ever Fed Chairman's Press Conference. Here’s a summary of the main points that Fed Chairman Ben Bernanke shared: - Bernanke said the downtick expected in Gross Domestic Product (GDP) is "transitory," and that the economy's temporary sluggishness is somewhat a result of high Oil prices, which he believes is also temporary in nature.
- Inflation has picked up in recent months but long-term inflation remains subdued.
- Bernanke was also crystal clear in saying the Fed will complete the $600 Billion of Quantitative Easing 2 (QE2) purchases through June, as originally planned.
So what does all of this mean for home loan rates in the short and long term? An important factor to keep in mind is the US Dollar, which continues to decline. With QE2 and the dollar printing presses going full steam through the end of June - we should expect the "greenback" to erode further, and how the US Dollar performs after QE2 may have a meaningful effect on the Bond market and home loan rates. A persistent weak US Dollar is ultimately not good for Bonds or home loan rates, as a continued decline would make US dollar denominated assets like Treasuries and Mortgage Bonds (to which home loan rates are tied) less attractive. A weak Dollar is also inflationary, as it makes our exports more expensive. The bottom line is this: In the short term, Bond prices are close to a position to break out higher, which would lower home loan rates further still. However, in order for this to happen, the Bond must break above a tough level of technical resistance. Longer-term, how the economy performs post-QE2 will determine which way Bonds and rates are headed at that point, but it’s most likely they’ll trend higher. If the economy, which still has stubbornly high unemployment and millions out of work, doesn't pick up on its own post-QE2, then the Fed will continue its accommodative monetary policy as much as it can to avoid inflation. This is to support the economy and push Stocks higher still...but this would have a further negative effect on the US Dollar, as well as Bonds and home loan rates. If you have been thinking about purchasing or refinancing a home, call or email me to learn more about why now is a great time to benefit from today’s historically low rates. Or forward this newsletter on to someone you know who may benefit. |
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Job news is the heavy hitter this week, but whether the week is full of "labor pains" remains to be seen. Look for: - Thursday’s weekly Initial and Continuing Jobless Claims Report. Last week’s Initial Claims sadly climbed to 429,000 for the week, well above both expectations and that psychologically important 400,000 barrier. Unfortunately, the pain in the labor market has not been "transitory". And seeing Claims rise back above 400,000 is not a good thing, as Initial Jobless Claims are a leading indicator on the health of the economy.
- The Labor Department’s official Jobs Report for April on Friday.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates have improved due to the slowing in the economy. I’ll be watching closely to see if this trend continues.
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Know Thyself. And Thy Community! Whether you’re looking to make local business decisions, integrate into a new neighborhood, or find volunteering opportunities where there is a need, it’s important to be informed about the health of your community. Fortunately, finding that information is quick and convenient when you visit http://www.countyhealthrankings.org. This website brings together 50 reports through the collaboration of the Robert Wood Johnson Foundation and the University of Wisconsin Population Health Institute. The result is a health ranking of each state’s counties. How Does Your Community Rank? 1. Simply visit http://www.countyhealthrankings.org.
2. Hover your mouse of the map of the U.S. and click on your state.
3. Click on your county once the state map appears on your screen. It’s that easy. With just a few clicks, you can see your county’s overall ranking as well as important local statistics related to: - Unemployment
- Education
- Smoking and drinking
- Access to recreational facilities
- Air pollution
- Poverty
- Motor vehicle death rates
- Diabetes
- And much more!
Check out your county today - and share this information with friends, family members, and co-workers in your community!
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Economic Calendar for the Week of May 2-6, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of May 02 - May 06 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. May 02 | 10:00 | ISM Index | Apr | 59.7 | | 61.2 | HIGH | | Wed. May 04 | 08:15 | ADP National Employment Report | Apr | 200K | | 201K | HIGH | | Wed. May 04 | 10:00 | ISM Services Index | Apr | 57.3 | | 57.3 | Moderate | | Thu. May 05 | 08:30 | Jobless Claims (Initial) | 4/30 | 400K | | 429K | Moderate | | Thu. May 05 | 08:00 | Productivity | Q1 | 1.0% | | 2.6% | Moderate | | Fri. May 06 | 08:30 | Non-farm Payrolls | Apr | 183K | | 216K | HIGH | | Fri. May 06 | 08:30 | Unemployment Rate | Apr | 8.8% | | 8.8% | HIGH | | Fri. May 06 | 08:30 | Hourly Earnings | Apr | 0.2% | | 0.0% | HIGH | | Fri. May 06 | 08:30 | Average Work Week | Apr | 34.3 | | 34.3 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% .250% Point Credit 15 Yr Fixed 4.125% .250% Point Fee Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.125% -0- Points 5/1 Arm 4.000% -0- Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.625% .500% Point Fee 5/1 ARM 3.625% -0- Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
NMLS# 404172
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
| For the week of Apr 25, 2011 --- Vol. 9, Issue 17 |
Last Week in Review: The US credit outlook was cut from stable to negative... but what does it mean to the markets and you? Forecast for the Week: It’s hard to believe how many jam-packed economic reports are due out this week! View: Did you know you can track your tax refund? Check out the tips below to see how. |
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WHEN IT RAINS, IT POOR’S... With the US already facing tough decisions over its national debt, the credit rating firm Standard and Poor's last week cut its credit outlook on the US from stable to negative. Standard & Poor’s also said the US’s AAA credit rating could be cut within two years, if headway isn't made in closing the budget gap. This is important because countries have credit ratings, just like individuals.  But what does all this mean? Let's break it down... First of all, it’s important to note that the downgrade to the credit outlook was a long time coming, and Traders in the pits even joked that S&P is late to the party with this call. For more information about different countries credit ratings - as well as your own state’s credit ratings - check out this Credit Ratings Link. All joking aside, this is a serious issue, as the last thing the US wants to endure is an outright credit downgrade. That would make the interest expense on the US debt even more burdensome - and, remember, we are all on the hook for this debt and the carrying costs. But if this was a long time coming, what sparked the change in outlook? The S&P cited the wide political divide amongst Congress as a major hurdle to meaningfully lower the federal budget deficit. Both parties want to lower the deficit but there is stark disagreement on how to get there. Hopefully, the S&P's actions will spark a fire in Congress to get serious and get something done. How does this issue impact Bonds and home loan rates? The national debt concerns won’t be addressed easily, especially when you remember that the country is approaching the debt-ceiling limit on May 16th. So in the immediate future, this will make for more volatility in the markets as headlines gyrate both Stocks and Bonds. Bonds are in an even tougher spot in the long term - and here's why: First... if the US government is successful in taking action to lower the budget deficit and avoid an outright credit downgrade, then we should expect a longer duration of accommodative Fed monetary policy, as the Fed doesn't want an economic slowdown to recreate a "deflationary" environment. If things do slowdown significantly, we may start hearing debate for a QE3 (or a third round of Quantitative Easing), which would not be good for Bonds and home loan rates. Second... if the US debt received an outright downgrade, it would be really bad for Bonds. As it stands now, this doesn’t seem likely and you shouldn’t be overly alarmed. But, it’s important to understand what is at stake here. The bottom line is that with some extra belt tightening as a result of this issue, we could expect to see slower economic growth in the future, as government spending would have to slow immensely to help close the budget gap. That said... home loan rates remain historically low right now. However, there are a lot of headwinds for Bonds down the road and last week’s credit outlook downgrade was just another one. Now’s the time to learn more about these issues and see how you can take advantage of the current low home loan rates and affordable home prices. It only takes a few minutes to look at your specific situation. Call or email to get started. |
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This week will be jam-packed with economic reports that can have a big impact on the markets and home loan rates: - We’ll see more housing news this week with the New Home Sales report right away Monday morning, followed by the Pending Home Sales report on Thursday.
- Consumers are also in the news this week. First, we’ll see the Consumer Confidence report on Tuesday, followed by the Consumer Sentiment Index on Friday. Both those reports give us some insight into how confident consumers are in the economy. Second, we’ll get a look at Personal Spending and Personal Income on Friday - which provide insight into the financial picture of consumers.
- The Federal Reserve holds its FOMC meeting this Tuesday and Wednesday, with the release of its Policy Statement coming Wednesday afternoon. As always, what the Fed says could impact home loan rates.
- Speaking of the Fed, we’ll see the Fed’s favorite gauge of inflation this Friday in the Personal Consumption Expenditures report.
- We’ll also get a read on the economic recovery with Wednesday’s Durable Good Orders, which gives us an update on consumer and business buying behavior on big-ticket items that are designed to last for an extended period of time, like furniture, televisions, appliances, vehicles, copy machines, and so on.
- On Thursday, the markets will see the latest report on Gross Domestic Product (GDP) - which is the broadest measure of economic activity - as well as Friday's Chicago PMI, which is a good indicator of overall economic activity.
- The Jobless Claims report also comes out Thursday. In the latest week’s report, Initial Jobless Claims fell but still remained above that pesky 400,000 level as the job market continues to be a thorn in the side of the economy. Until we can see a pattern of unemployment claims well below 400,000, we will not see a significant fall in the Unemployment Rate.
- Finally, on Friday the Employment Cost Index (ECI) will be released. The ECI is one way to evaluate wage trends and the risk of wage inflation, as well as possible price pressures. This is important to the housing industry because if wage inflation threatens, it is possible home loan rates will rise through Bond prices dropping.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the parallel black lines on the right side of the chart below, Bonds hovered in a tight range and were unable to improve much last week due to rising Stocks and inflation concerns. Those two elements only add to the headwinds for Bonds and indicate that now may be the ideal time to take advantage of low home loan rates. Call or email to see how you can benefit by acting now. |
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Ways to Check on Your Tax Refund By Mary Beth Franklin, Kiplinger.com Some 75% of U.S. taxpayers are expecting a refund this year. If you’re wondering when you’ll get your money, you have several ways to check. Go to www.irs.gov and choose the "Where’s My Refund" tool. You’ll need to provide your Social Security number, your filing status -- single, married filing either jointly or separately, head of household, or qualifying widow or widower -- and the amount of your expected refund, as shown on your tax return, rounded to the nearest whole dollar. You can usually get information about the status of your refund 72 hours after the IRS acknowledges receipt of your e-filed return, or three to four weeks after you file a paper return. The tool is updated every Wednesday. Also, this year the IRS unveiled a new smart-phone app, IRS2Go, for iPhone and Android phone users. You can download the free app at the Apple App store or Android Marketplace. Input the same three pieces of information -- Social Security number, filing status and expected refund -- to find out when you’ll get your money. (Next year, be sure to choose direct deposit if you’re filing your return electronically; you may receive your refund in as little as ten days.) Start thinking about how you can put your refund to good use by paying down debt or building up savings. While you’re at it, file a new Form W-4 with your employer to increase your take-home pay immediately rather than waiting until next year for a tax refund. Tap our Easy-to-Use Withholding Calculator to help you fill in the values. Reprinted with permission. All Contents ©2011 The Kiplinger Washington Editors. www.kiplinger.com.
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Economic Calendar for the Week of April 25-29, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of April 25 - April 29 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. April 25 | 10:00 | New Home Sales | Mar | 280 k | | 250K | Moderate | | Tue. April 26 | 10:00 | Consumer Confidence | Apr | 64.4 | | 63.4 | Moderate | | Wed. April 27 | 08:30 | Durable Goods Orders | Mar | 3.0% | | -0.6% | Moderate | | Wed. April 27 | 02:15 | FOMC Meeting | Apr | NA | | 0.25% | HIGH | | Thu. April 28 | 08:30 | Jobless Claims (Initial) | 4/23 | 390K | | 403K | Moderate | | Thu. April 28 | 10:00 | Pending Home Sales | Mar | 1.5% | | 2.1% | Moderate | | Thu. April 28 | 08:30 | GDP Chain Deflator | Q1 | 2.3% | | 0.4% | HIGH | | Thu. April 28 | 08:30 | Gross Domestic Product (GDP) | Q1 | 1.7% | | 3.1% | Moderate | | Fri. April 29 | 10:00 | Consumer Sentiment Index (UoM) | Apr | 69.6 | | 69.6 | Moderate | | Fri. April 29 | 09:45 | Chicago PMI | Apr | 62.0 | | 70.6 | HIGH | | Fri. April 29 | 08:30 | Employment Cost Index (ECI) | Q1 | 0.5% | | 0.4% | HIGH | | Fri. April 29 | 08:30 | Personal Consumption Expenditures and Core PCE | Mar | 0.1% | | 0.2% | HIGH | | Fri. April 29 | 08:30 | Personal Consumption Expenditures and Core PCE | Mar | 0.2% | | 0.2% | HIGH | | Fri. April 29 | 08:30 | Personal Spending | Mar | 0.5% | | 0.7% | Moderate | | Fri. April 29 | 08:30 | Personal Income | Mar | 0.4% | | 0.3% | Moderate | | Fri. April 29 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 0.9% | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% .250% Point Fee 15 Yr Fixed 4.250% .500% Point Credit Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.500% -0- Points 5/1 Arm 3.875% .125% Point Credit FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .500% Point Credit 5/1 ARM 3.750% .625% Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
NMLS# 404172
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. For the week of Mar 28, 2011 --- Vol. 9, Issue 13 |
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Last Week in Review: Europe and the Treasury Department impacted Bonds. Find out what it all means to home loan rates. Forecast for the Week: This week will be busy from start to finish... but the biggest news will hit on Friday. Read below to learn why. View: Mobile phone banking is convenient. But is it safe? Read these tips to help lower your risk! |
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"It’s not a matter of IF, but WHEN!" That old adage proved true last week as the fiscal problems in Europe came back to roost as predicted - even after being overshadowed recently by news from Japan and the Middle East. Despite all the focus on government debt in Europe, it’s important to note that the problems are more than just financial; there is also a ton of political capital at risk. The stronger and more fiscally conservative Euro member countries like Germany and France do not want to pick up the tab for poor performing countries like Ireland, Greece, Portugal and many others standing in line behind them. And as news flows out of Europe - either good or bad - Mortgage Bonds and home loan rates here in the US will move in sympathy.  One news item that pressured Bonds lower last week was word that inflation in the United Kingdom (UK) jumped to the highest level in two years in February. Remember, inflation is the archenemy of Bonds, and inflation around the globe seeps into the US. In fact, we’re already seeing it as Producer Prices (which look at wholesale inflation) are running at very hot levels... with prices up 3.3% in just the last three months. If pricing pressures don't recede for producers of goods and services, companies will have one of two choices: Either: Absorb the higher cost of goods - and, thereby, hurt earnings growth Or: Pass those increased costs onto consumers - thereby, creating consumer inflation Both of those scenarios would be bad for Stocks and Bonds. And since home loan rates are tied to Mortgage Backed Securities - which are a type of Bond - those scenarios would also be bad for home loan rates. Speaking of Mortgage Backed Securities, last week the Treasury Department announced it is going to begin selling some of its massive Mortgage Backed Securities holdings. This is important to anyone looking to purchase or refinance a home. That’s because this announcement immediately pushed Bond prices significantly lower, as Traders tried to get their own positions sold. Think of it as a financial game of musical chairs... in which no one wants to be the last one standing with a mitt full of Mortgage Backed Securities. This isn’t the last we’ll hear about this - and since home loan rates are tied to Mortgage Backed Securities, this creates the potential for home loan rates to rise in the near future. Fortunately, home loan rates are still at very attractive levels for now, despite the Bond market taking a hit for most of last week. So if you’ve been thinking about purchasing or refinancing a home, this is the time to see how you can benefit before rates possibly move higher. Because as bad as it was to lose some Bond pricing in the last few days, prices could move significantly worse depending on how they hold on to technical support. For more information on what this means and how it may impact you or someone you know, call or email today. I’ll be happy to explain the situation and offer advice based on your unique situation. |
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This week will be busy from start to finish... but the biggest news will hit on Friday! - Right away Monday morning we’ll see the Personal Consumption Expenditures (PCE) Index, which is the Fed's favorite gauge of inflation. And as stated above, inflation is the archenemy of Bonds - which means it’s also bad for home loan rates.
- We’ll also see a new report Monday morning on Pending Home Sales, which comes after last week’s disappointing reports on Existing Home Sales and New Home Sales.
- This week, we’ll gain new insight on consumers - with the Personal Spending and Personal Income reports on Monday as well as the Consumer Confidence report on Tuesday.
- Manufacturing will also be in the news with Thursday’s release of the Chicago PMI, which reports on manufacturing in Chicago and is a good indicator of overall economic activity.
- But the big news to watch this week relates to employment, which kicks off Wednesday with the ADP National Employment Report on non-farm private employment.
- Next up is another round of Initial Jobless Claims on Thursday. Last week’s report indicated that Jobless Claims are improving on a weekly basis, but at a snail's pace and not enough to make a meaningful dent in our stubbornly high unemployment rate.
- Finally, the busy week culminates with the highly anticipated Jobs Report on Friday. This report features new data regarding job growth and the unemployment rate - needless to say, this report can be a big market mover!
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates took a negative turn last week, due in large part to pressure from inflation concerns and a rebound in the Stock market. However, rates are still attractive - making this an opportune time to take action for people looking to purchase or refinance a home before rates potentially worsen further. |
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Safe Ways to Bank With Your Smart Phone Follow these steps to lower the risk of having your personal information stolen. By Cameron Huddleston, Kiplinger.com Using your smart phone to check your bank account balance or deposit a check is convenient. But is it safe? Hackers are getting better at finding ways to tap into smart phones and capture people’s account numbers and other personal information. However, there are ways to lower your risk of becoming a victim, says Michael Gregg, a cyber security expert and founder of Superior Solutions. Here are his tips: Don’t use public Wi-Fi to access accounts online. Use your phone provider’s network, instead, because it’s more difficult for hackers to tap into it. Public Wi-Fi connections, on the other hand, are easily compromised not just by savvy cybercriminals but by anyone who downloads a free program, which allows users to see what others are doing online and log onto their accounts as them. Watch out for smishing (fake text messages). If you get a text message supposedly from your financial institution warning you that there may be a problem with your account, don’t click on any links or call a number in the message. The link could take you to a phony site with malicious software that will give criminals access to your phone. And the number could connect you with scammers who are trying to collect your account information. Go directly to your bank’s Web site to check your account or to get a customer service number. And if you get a text message asking you to download a security update for your phone, don’t be fooled. Smart phone makers don’t send out security updates by text message, Gregg says. Be careful where you browse. Go to sites you know to conduct financial transactions. And before downloading any banking applications, check your financial institution’s site to make sure it offers one. Apple puts all apps for the iPhone through serious scrutiny, but other smart phone makers do not. A year ago, more than 50 fraudulent mobile banking apps appeared in the Android marketplace and were removed once they were discovered -- after many had bought and downloaded the apps. Don’t jailbreak your iPhone. You’ll lose your security mechanisms, Gregg says, if you tamper with your iPhone so it can run on another service provider’s network or download additional apps. Reprinted with permission. All Content ©2011 The Kiplinger Washington Editors. www.kiplinger.com.
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Economic Calendar for the Week of March 28 - April 1, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 28 - April 01 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. March 28 | 08:30 | Personal Income | Feb | 0.4% | | 1.0% | Moderate | | Mon. March 28 | 08:30 | Personal Spending | Feb | 0.6% | | 0.2% | Moderate | | Mon. March 28 | 08:30 | Personal Consumption Expenditures and Core PCE | Feb | 0.2% | | 0.1% | HIGH | | Mon. March 28 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 0.8% | HIGH | | Mon. March 28 | 10:00 | Pending Home Sales | Jan | 0.3% | | -2.8% | Moderate | | Tue. March 29 | 10:00 | Consumer Confidence | Mar | 65.0 | | 70.4 | Moderate | | Wed. March 30 | 08:15 | ADP National Employment Report | Mar | 210K | | 217K | HIGH | | Thu. March 31 | 08:30 | Jobless Claims (Initial) | 3/26 | 383K | | 382K | Moderate | | Thu. March 31 | 09:45 | Chicago PMI | Mar | 69.5 | | 71.2 | HIGH | | Fri. April 01 | 08:30 | Non-farm Payrolls | Mar | 185K | | 192K | HIGH | | Fri. April 01 | 08:30 | Unemployment Rate | Mar | 8.9% | | 8.9% | HIGH | | Fri. April 01 | 08:30 | Hourly Earnings | Mar | 0.2% | | 0.0% | HIGH | | Fri. April 01 | 08:30 | Average Work Week | Mar | 34.3 | | 34.2 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% -0- Point 15 Yr Fixed 4.250% -0- Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.625% .125% Point Fee 5/1 Arm 4.250% -0- Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .375% Point Fee 5/1 ARM 3.750% .250% Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
NMLS# 404172
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Mar 21, 2011 --- Vol. 9, Issue 12 |
Last Week in Review: Our thoughts continue to go out to people suffering in both Japan and the Middle East. Read on to learn how world events impacted the markets. Forecast for the Week: The volatility is sure to continue, as will the barrage of news, including several reports that will tell us how our economic recovery is faring. View: Have a home equity line of credit? Know if it is impacting your credit score unfairly? Check out important details below! |
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"It’s a small world after all..." That notion was especially evident last week, with both the news in Japan and the Middle East impacting our markets. Here’s what happened, and what the impact was on home loan rates. The first thing to understand is the concept of "safe haven trading." At times of global unrest and uncertainty, like with last week’s nuclear crisis in Japan and the ongoing fighting in Libya, Traders will park their money in "safe" investments like our Bonds. And since Bonds such as Mortgage Backed Securities (MBS) are tied to home loan rates, when Bond pricing improves, our home loan rates can improve... which is what we saw last week.  But it’s also important to understand how incredibly volatile this situation is. A "safe haven trade" is just that... a trade, which is short-term. Should events around the world become more stable, this safe haven trade can unwind very quickly... with Bond prices and home loan rates worsening as a result. This is similar to how the market reacted at the end of last week, when Libya declared a cease fire to fighting after the United Nations declared a no-fly zone. Another thing to note is that Bonds and home loan rates are facing some additional headwinds that could hamper their improvement. First, if Japan sells some of their Treasury holdings to help finance the recovery and reconstruction, like they did in 1995 after the Kobe earthquake, this could spur a sell-off in Bonds overall, which would cause Bonds and home loan rates to worsen. Second, we cannot overlook the impact of inflation... which is the arch enemy of Bonds and home loan rates... both here and overseas. Not only is China struggling with inflation even though they have raised rates and tightened lending requirements multiple times over the past few months, but last week both our Producer Price Index (which measures inflation at the wholesale level) and our Consumer Price Index were hotter than expected. The bottom line: If inflation is allowed to grow, it can be very difficult to rein in and control... and this will hinder improvement in home loan rates. And, if the situations in Japan and the Middle East stabilize or improve, we could see further unwinding of the "safe-haven" buying of US Bonds... which will also hinder improvement in home loan rates. If you have been thinking about purchasing or refinancing a home, call or email me to learn more about how you can benefit. Or forward this newsletter on to someone you know who may benefit from today’s historically low rates. |
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Continuing developments in world events are sure to impact the markets this week, but there are some important US economic reports to look for, too, including: - Monday’s Existing Home Sales Report and Wednesday’s New Home Sales Report for February - will they show improvement in the housing market?
- We’ll get a read on the economic recovery with the Durable Goods Report on Thursday, which gives us an update on consumer and business buying behavior on big-ticket items that are designed to last for an extended period of time (i.e. televisions, appliances, vehicles, etc). It’s an interesting report, as people tend to hold back on these types of purchases when they are feeling a need to be extra conservative with their finances or feel insecure about their employment.
- We’ll also get a read on the labor market with Thursday’s weekly Initial and Continuing Jobless Claims Report. Last week’s Initial Jobless Claims were reported at 385,000, right smack at expectations, and show that the labor market is continuing to improve.
- Friday will bring two additional reads on our economic recovery: The Consumer Sentiment Index and the Gross Domestic Product Report, which is the broadest measure of economic activity.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates improved due to the turmoil around the world, but they were unable to improve above a key technical level. I’ll be watching to see which way the markets move this week.
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Home Equity Lines of Credit and Your Credit Score What You Need to Know and Do Credit reports have always been important, but they’ve grown even more important in recent years. Now more than ever, you need to make sure you understand what’s on your credit report - and you need to know what steps you can take to improve your score. For example, did you know that a Home Equity Line of Credit (HELOC) can impact your credit score quite dramatically... and sometimes unfairly... depending on how it is reported? Here’s What You Need to Know... and Do! First, you need to know that HELOC’s are commonly reported by the three credit bureaus as revolving accounts. In reality however, they do not fall under the typical revolving terms, even though they are set up in the same way as a revolving account. That’s because HELOC’s are secured by an asset. Here’s the Good News... The Fair Credit Reporting act requires reporting agencies to report true and accurate information. So when a HELOC is reported as a revolving account, you can actually send a letter to the three credit bureaus asking them to change the type of account from "Revolving" to "Line of Credit" or "Other." This way, the account will not be rated by the scoring system using the "Balance to Limit" ratio scenario - which can drop a credit score by as much as 75 points if the HELOC is maxed out to the limit of the available credit line. A Final Word of Advice If you do decide to send a letter, you should send it as a Certified Letter, along with a copy of the HELOC agreement. You may have to send the letters more than once, but persistence is the key to accomplishing a positive result with the bureaus. This article was adapted from information provided by national credit expert Linda Ferrari, author of "THE BIG SCORE: Getting It and Keeping It, Buying Power for Life." Learn more and check out her credit resources at www.lindaferrari.com
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Economic Calendar for the Week of March 21-25, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 21 - March 25 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. March 21 | 10:00 | Existing Home Sales | Feb | 5.05M | | 5.36M | Moderate | | Wed. March 23 | 10:00 | New Home Sales | Feb | 288K | | 284K | Moderate | | Thu. March 24 | 08:30 | Jobless Claims (Initial) | 3/19 | 384K | | 385K | Moderate | | Thu. March 24 | 08:30 | Durable Goods Orders | Feb | 0.9% | | 3.2% | Moderate | | Fri. March 25 | 08:30 | Gross Domestic Product (GDP) | Q4 | 2.9% | | 2.8% | Moderate | | Fri. March 25 | 08:30 | GDP Chain Deflator | Q4 | 0.4% | | 0.4% | Moderate | | Fri. March 25 | 10:00 | Consumer Sentiment Index (UoM) | Mar | 68.0 | | 68.2 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% .125% Point Credit 15 Yr Fixed 4.250% .750% Point Credit Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.375% .125% Point Fee 5/1 Arm 4.000% .250% Point Fee FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .875% Point Credit 5/1 ARM 3.750% .500% Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
NMLS# 404172
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
| For the week of Mar 14, 2011 --- Vol. 9, Issue 11 |
Last Week in Review: Our hearts and minds - as well as the markets - were moved by the tsunami in Japan and unrest in Saudi Arabia. Read how both impacted Bonds and home loan rates! Forecast for the Week: Double dose after double dose hits the news wires this week. Find out what to watch and why! View: Discover the pros, cons, and interesting tidbits about Daylight Saving Time, which begins this week. |
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"And now... the rest of the story" - Paul Harvey. With his famous line, Paul Harvey pointed out for years that there’s more to every story - and often those hidden details influence what happened. With that in mind, let’s look at the “rest of the story” behind last week’s news items, which had alternating impacts on Bond prices and home loan rates.  First, let us start by sending our thoughts and prayers to the families affected by last week’s earthquake and tsunami in Japan. The earthquake was a magnitude of 8.9 - the strongest in 140 years. The earthquake in Japan and its damage created some counterintuitive market reactions. One would think that US Treasuries and Mortgage Bonds would have traded much higher, as often is the case with devastating natural events that drive money into "safe haven" trades. But that wasn't the case. Why? The answer is that buying of Treasuries and Mortgage Bonds as a safe haven trade was offset by the Japanese selling some of their own massive holdings of Treasuries and Mortgage Bonds, in order to repatriate money back to their country during the time of emergency. Considering that Japan is the second largest holder of U.S. debt at $877 Billion, selling just a tiny position of their holdings has an impact on Bond prices. In addition, Bond prices traded in very volatile fashion last week after getting jockeyed around on news out of Saudi Arabia that police had opened fire on protesters with rubber bullets. Let’s look at how this influenced the markets in a different way than one might at first imagine. Like other recent uprisings in the Middle East, Saudi protesters are looking for more democracy, the right to elect public officials, greater civil rights, freedom of expression, more women's rights and a higher minimum wage. Interestingly, however, oil fell last week, despite the news. Why? Shouldn't unrest in Saudi Arabia - the world's largest oil producer, push prices higher? Yes, but that news was offset by the earthquake in Japan. That’s because Japan is a huge importer of oil... and the market senses that the earthquake and subsequent tsunami may create an economic slowdown and diminish the demand for oil. Seeing that Mortgage Bonds are lower - even in the face of weak Stocks and enormous uncertain global news - tells us that the gains in Bonds are not coming with a lot of conviction and Traders are selling into this strength. This is because a lot of headwinds remain for Bonds - like inflation abroad, rising government debt and continued QE2 purchases. This is a good example of why it is important to work with a mortgage professional that understands not only what was reported in the news, but also how the many cross currents may have alternating effects on everything from Bonds, Stocks, Oil to the US Dollar. |
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"Double dose!" is the phrase of the week, as we’ll see multiple reports this week focusing on the same segments of the economy: - We’ll start off with some big news Tuesday, when the Federal Reserve holds its FOMC meeting and releases its Policy Statement later that afternoon. As always, what the Fed says about the economy, inflation, and its Quantitative Easing program could have an impact on home loan rates.
- There’s a double dose of real estate news with Wednesday’s release of data on Housing Starts and Building Permits in February. Check back with me on Wednesday to get the breakdown of how the news actually arrived!
- There’s also a double dose of manufacturing news. Tuesday’s Empire State Index looks at New York State’s manufacturing sector and is a good gauge of manufacturing overall, while on Thursday we’ll also see another important manufacturing report in the Philadelphia Fed Index.
- A double dose of inflation news also comes our way this week with Wednesday’s Producer Price Index Report, which highlights inflation at the wholesale level, and Thursday’s Consumer Price Index Report, measuring inflation for consumers like you and me! Remember: The Fed is intent on creating inflation, which is unfriendly to home loan rates, and signs of inflation from these reports could be unfavorable for rates.
- Thursday we’ll get a read on employment with the weekly Initial Jobless Claims Report. Initial Jobless claims rose 26,000 in the latest week to 397,000, which was above expectations but still below that psychological barrier of 400,000.
- Finally, on Thursday we’ll see a double dose of manufacturing data with the release of reports on Capacity Utilization and Industrial Production in February. The capacity utilization rate provides an estimate of how much factory capacity is in use. If the utilization rate climbs too high it can lead to inflationary bottlenecks in production. The Federal Reserve watches this report closely and decides how to set interest rates on the basis of whether production constraints are threatening to cause inflation.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see by the arrows in the chart below, Bond prices experienced some up-and-down volatility last week, but ended the week near where they began - meaning home loan rates are still near historic lows. So what should you do if you or someone you know is in the market for a new home? The bottom line is that even if housing were to drop a little further in some areas, the affordability coming from today's rates serves as a backstop against any moderate price reduction. Remember, housing will likely be in a much better position in the second half of the year and at that time rates could be a bit higher. Now’s the time to take advantage of the combination of low rates and affordable housing. Call or email today to get started. |
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Daylight Saving Time (DST) begins on Sunday, March 13, 2011. The way we refer to time zones also changes. For example, Eastern Standard Time (EST) becomes Eastern Daylight Time (EDT). But remember, some areas of the United States don’t use DST, such as Arizona, Puerto Rico, Hawaii, the US Virgin Islands and American Samoa. Benefits of Daylight Saving Time Despite some concerns, Americans overwhelmingly like Daylight Saving Time. There is simply more sunlight in the evenings to enjoy the outdoors and get things done. Plus, additional hours of daylight can help save energy on a national scale - as much as 100,000 barrels of oil per day according to some estimates. And brighter is safer. Studies have shown that the DST shift reduces traffic accidents. Additionally, a study by the US Law Enforcement Admin also determined that crime is consistently lower during DST, with violent crimes down as much as 10% to 13%. For many crimes, like mugging, darkness is a factor--so more light in the evening hours reduces these types of crimes. Cons of Daylight Saving Time Not everyone benefits from DST. For example, many farmers say that DST has a negative impact on their livestock’s natural schedules. The airline industry also reports that it costs millions of dollars to adjust time schedules - and even then, airlines report numerous problems with international flight connections during the transition time since DST isn’t followed uniformly around the world. Interesting DST Facts - A man was actually able to avoid the draft for the Vietnam War using a Daylight Saving Time loophole. When he was born, it was just after midnight, DST. When he was drafted, he successfully argued that in his home state of Delaware, standard time - not DST - was the official time for recording births. So he was technically born on the previous date - which had a much higher draft lottery number - and he was able to avoid being drafted.
- In September 1999, the West Bank was on Daylight Saving Time, while Israel had switched back to standard time. A group of West Bank terrorists prepared some timed bombs. Unfortunately for them, they misunderstood the time change and the bombs exploded early - killing the terrorists themselves rather than the intended victims, two busloads of innocent citizens.
- In the 1950s and 60s, each state and locality was permitted to choose start and end DST dates as they desired. During 1965, Minneapolis and St. Paul - which are considered one metropolitan area - didn't agree on start dates, and for a period of time, these Twin Cities had a one hour time change between them. And on one Ohio to Virginia bus route, passengers technically had to change their watches seven times in 35 miles!
- To keep to their published timetables, Amtrak trains cannot leave a station before the scheduled time. So when the clocks "fall back" in the fall, all trains that are running on time actually stop at 2 am - the official time of DST change - and wait one hour before resuming their routes. In the spring, the routes instantaneously become one hour behind schedule, but they just keep going and do their best to make up the time.
Finally, since many electronic devices and computer programs are set to adjust to DST based on the old dates, they may not change automatically on March 13. So, you’ll want to double-check all of your devices and confirm that the time is correct.
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Economic Calendar for the Week of March 14-18, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 14 - March 18 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. March 15 | 08:30 | Empire State Index | Mar | 17.0 | | 15.43 | Moderate | | Tue. March 15 | 02:15 | FOMC Meeting | Mar | | | | HIGH | | Wed. March 16 | 08:30 | Housing Starts | Feb | 551K | | 596K | Moderate | | Wed. March 16 | 08:30 | Building Permits | Feb | 570K | | 562K | Moderate | | Wed. March 16 | 08:30 | Producer Price Index (PPI) | Feb | 0.6% | | 0.8% | Moderate | | Wed. March 16 | 08:30 | Core Producer Price Index (PPI) | Feb | 0.2% | | 0.5% | Moderate | | Thu. March 17 | 10:00 | Index of Leading Econ Ind (LEI) | Feb | 0.9% | | 0.1% | Low | | Thu. March 17 | 09:15 | Capacity Utilization | Feb | 76.5% | | 76.10% | Moderate | | Thu. March 17 | 09:15 | Industrial Production | Feb | 0.6% | | -0.1% | Moderate | | Thu. March 17 | 08:30 | Core Consumer Price Index (CPI) | Feb | 0.1% | | 0.2% | HIGH | | Thu. March 17 | 08:30 | Consumer Price Index (CPI) | Feb | 0.4% | | 0.4% | HIGH | | Thu. March 17 | 08:30 | Jobless Claims (Initial) | 3/12 | 387K | | 397K | Moderate | | Thu. March 17 | 10:00 | Philadelphia Fed Index | Mar | 28.0 | | 35.9 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% .250% Point Fee 15 Yr Fixed 4.125% .500% Point Fee Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.500% -0- Points 5/1 Arm 4.000% .125% Point Fee FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .625% Point Credit 5/1 ARM 3.750% .625% Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. For the week of Mar 14, 2011 --- Vol. 9, Issue 11 |
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Last Week in Review: Our hearts and minds - as well as the markets - were moved by the tsunami in Japan and unrest in Saudi Arabia. Read how both impacted Bonds and home loan rates! Forecast for the Week: Double dose after double dose hits the news wires this week. Find out what to watch and why! View: Discover the pros, cons, and interesting tidbits about Daylight Saving Time, which begins this week. |
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"And now... the rest of the story" - Paul Harvey. With his famous line, Paul Harvey pointed out for years that there’s more to every story - and often those hidden details influence what happened. With that in mind, let’s look at the “rest of the story” behind last week’s news items, which had alternating impacts on Bond prices and home loan rates. First, let us start by sending our thoughts and prayers to the families affected by last week’s earthquake and tsunami in Japan. The earthquake was a magnitude of 8.9 - the strongest in 140 years. The earthquake in Japan and its damage created some counterintuitive market reactions. One would think that US Treasuries and Mortgage Bonds would have traded much higher, as often is the case with devastating natural events that drive money into "safe haven" trades. But that wasn't the case. Why? The answer is that buying of Treasuries and Mortgage Bonds as a safe haven trade was offset by the Japanese selling some of their own massive holdings of Treasuries and Mortgage Bonds, in order to repatriate money back to their country during the time of emergency. Considering that Japan is the second largest holder of U.S. debt at $877 Billion, selling just a tiny position of their holdings has an impact on Bond prices. In addition, Bond prices traded in very volatile fashion last week after getting jockeyed around on news out of Saudi Arabia that police had opened fire on protesters with rubber bullets. Let’s look at how this influenced the markets in a different way than one might at first imagine. Like other recent uprisings in the Middle East, Saudi protesters are looking for more democracy, the right to elect public officials, greater civil rights, freedom of expression, more women's rights and a higher minimum wage. Interestingly, however, oil fell last week, despite the news. Why? Shouldn't unrest in Saudi Arabia - the world's largest oil producer, push prices higher? Yes, but that news was offset by the earthquake in Japan. That’s because Japan is a huge importer of oil... and the market senses that the earthquake and subsequent tsunami may create an economic slowdown and diminish the demand for oil. Seeing that Mortgage Bonds are lower - even in the face of weak Stocks and enormous uncertain global news - tells us that the gains in Bonds are not coming with a lot of conviction and Traders are selling into this strength. This is because a lot of headwinds remain for Bonds - like inflation abroad, rising government debt and continued QE2 purchases. This is a good example of why it is important to work with a mortgage professional that understands not only what was reported in the news, but also how the many cross currents may have alternating effects on everything from Bonds, Stocks, Oil to the US Dollar. |
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"Double dose!" is the phrase of the week, as we’ll see multiple reports this week focusing on the same segments of the economy: - We’ll start off with some big news Tuesday, when the Federal Reserve holds its FOMC meeting and releases its Policy Statement later that afternoon. As always, what the Fed says about the economy, inflation, and its Quantitative Easing program could have an impact on home loan rates.
- There’s a double dose of real estate news with Wednesday’s release of data on Housing Starts and Building Permits in February. Check back with me on Wednesday to get the breakdown of how the news actually arrived!
- There’s also a double dose of manufacturing news. Tuesday’s Empire State Index looks at New York State’s manufacturing sector and is a good gauge of manufacturing overall, while on Thursday we’ll also see another important manufacturing report in the Philadelphia Fed Index.
- A double dose of inflation news also comes our way this week with Wednesday’s Producer Price Index Report, which highlights inflation at the wholesale level, and Thursday’s Consumer Price Index Report, measuring inflation for consumers like you and me! Remember: The Fed is intent on creating inflation, which is unfriendly to home loan rates, and signs of inflation from these reports could be unfavorable for rates.
- Thursday we’ll get a read on employment with the weekly Initial Jobless Claims Report. Initial Jobless claims rose 26,000 in the latest week to 397,000, which was above expectations but still below that psychological barrier of 400,000.
- Finally, on Thursday we’ll see a double dose of manufacturing data with the release of reports on Capacity Utilization and Industrial Production in February. The capacity utilization rate provides an estimate of how much factory capacity is in use. If the utilization rate climbs too high it can lead to inflationary bottlenecks in production. The Federal Reserve watches this report closely and decides how to set interest rates on the basis of whether production constraints are threatening to cause inflation.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see by the arrows in the chart below, Bond prices experienced some up-and-down volatility last week, but ended the week near where they began - meaning home loan rates are still near historic lows. So what should you do if you or someone you know is in the market for a new home? The bottom line is that even if housing were to drop a little further in some areas, the affordability coming from today's rates serves as a backstop against any moderate price reduction. Remember, housing will likely be in a much better position in the second half of the year and at that time rates could be a bit higher. Now’s the time to take advantage of the combination of low rates and affordable housing. Call or email today to get started. |
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Daylight Saving Time (DST) begins on Sunday, March 13, 2011. The way we refer to time zones also changes. For example, Eastern Standard Time (EST) becomes Eastern Daylight Time (EDT). But remember, some areas of the United States don’t use DST, such as Arizona, Puerto Rico, Hawaii, the US Virgin Islands and American Samoa. Benefits of Daylight Saving Time Despite some concerns, Americans overwhelmingly like Daylight Saving Time. There is simply more sunlight in the evenings to enjoy the outdoors and get things done. Plus, additional hours of daylight can help save energy on a national scale - as much as 100,000 barrels of oil per day according to some estimates. And brighter is safer. Studies have shown that the DST shift reduces traffic accidents. Additionally, a study by the US Law Enforcement Admin also determined that crime is consistently lower during DST, with violent crimes down as much as 10% to 13%. For many crimes, like mugging, darkness is a factor--so more light in the evening hours reduces these types of crimes. Cons of Daylight Saving Time Not everyone benefits from DST. For example, many farmers say that DST has a negative impact on their livestock’s natural schedules. The airline industry also reports that it costs millions of dollars to adjust time schedules - and even then, airlines report numerous problems with international flight connections during the transition time since DST isn’t followed uniformly around the world. Interesting DST Facts - A man was actually able to avoid the draft for the Vietnam War using a Daylight Saving Time loophole. When he was born, it was just after midnight, DST. When he was drafted, he successfully argued that in his home state of Delaware, standard time - not DST - was the official time for recording births. So he was technically born on the previous date - which had a much higher draft lottery number - and he was able to avoid being drafted.
- In September 1999, the West Bank was on Daylight Saving Time, while Israel had switched back to standard time. A group of West Bank terrorists prepared some timed bombs. Unfortunately for them, they misunderstood the time change and the bombs exploded early - killing the terrorists themselves rather than the intended victims, two busloads of innocent citizens.
- In the 1950s and 60s, each state and locality was permitted to choose start and end DST dates as they desired. During 1965, Minneapolis and St. Paul - which are considered one metropolitan area - didn't agree on start dates, and for a period of time, these Twin Cities had a one hour time change between them. And on one Ohio to Virginia bus route, passengers technically had to change their watches seven times in 35 miles!
- To keep to their published timetables, Amtrak trains cannot leave a station before the scheduled time. So when the clocks "fall back" in the fall, all trains that are running on time actually stop at 2 am - the official time of DST change - and wait one hour before resuming their routes. In the spring, the routes instantaneously become one hour behind schedule, but they just keep going and do their best to make up the time.
Finally, since many electronic devices and computer programs are set to adjust to DST based on the old dates, they may not change automatically on March 13. So, you’ll want to double-check all of your devices and confirm that the time is correct.
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Economic Calendar for the Week of March 14-18, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 14 - March 18 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. March 15 | 08:30 | Empire State Index | Mar | 17.0 | | 15.43 | Moderate | | Tue. March 15 | 02:15 | FOMC Meeting | Mar | | | | HIGH | | Wed. March 16 | 08:30 | Housing Starts | Feb | 551K | | 596K | Moderate | | Wed. March 16 | 08:30 | Building Permits | Feb | 570K | | 562K | Moderate | | Wed. March 16 | 08:30 | Producer Price Index (PPI) | Feb | 0.6% | | 0.8% | Moderate | | Wed. March 16 | 08:30 | Core Producer Price Index (PPI) | Feb | 0.2% | | 0.5% | Moderate | | Thu. March 17 | 10:00 | Index of Leading Econ Ind (LEI) | Feb | 0.9% | | 0.1% | Low | | Thu. March 17 | 09:15 | Capacity Utilization | Feb | 76.5% | | 76.10% | Moderate | | Thu. March 17 | 09:15 | Industrial Production | Feb | 0.6% | | -0.1% | Moderate | | Thu. March 17 | 08:30 | Core Consumer Price Index (CPI) | Feb | 0.1% | | 0.2% | HIGH | | Thu. March 17 | 08:30 | Consumer Price Index (CPI) | Feb | 0.4% | | 0.4% | HIGH | | Thu. March 17 | 08:30 | Jobless Claims (Initial) | 3/12 | 387K | | 397K | Moderate | | Thu. March 17 | 10:00 | Philadelphia Fed Index | Mar | 28.0 | | 35.9 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% .250% Point Fee 15 Yr Fixed 4.125% .500% Point Fee Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.500% -0- Points 5/1 Arm 4.000% .125% Point Fee FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .625% Point Credit 5/1 ARM 3.750% .625% Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. | For the week of Mar 14, 2011 --- Vol. 9, Issue 11 |
Last Week in Review: Our hearts and minds - as well as the markets - were moved by the tsunami in Japan and unrest in Saudi Arabia. Read how both impacted Bonds and home loan rates! Forecast for the Week: Double dose after double dose hits the news wires this week. Find out what to watch and why! View: Discover the pros, cons, and interesting tidbits about Daylight Saving Time, which begins this week. |
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"And now... the rest of the story" - Paul Harvey. With his famous line, Paul Harvey pointed out for years that there’s more to every story - and often those hidden details influence what happened. With that in mind, let’s look at the “rest of the story” behind last week’s news items, which had alternating impacts on Bond prices and home loan rates. First, let us start by sending our thoughts and prayers to the families affected by last week’s earthquake and tsunami in Japan. The earthquake was a magnitude of 8.9 - the strongest in 140 years. The earthquake in Japan and its damage created some counterintuitive market reactions. One would think that US Treasuries and Mortgage Bonds would have traded much higher, as often is the case with devastating natural events that drive money into "safe haven" trades. But that wasn't the case. Why? The answer is that buying of Treasuries and Mortgage Bonds as a safe haven trade was offset by the Japanese selling some of their own massive holdings of Treasuries and Mortgage Bonds, in order to repatriate money back to their country during the time of emergency. Considering that Japan is the second largest holder of U.S. debt at $877 Billion, selling just a tiny position of their holdings has an impact on Bond prices. In addition, Bond prices traded in very volatile fashion last week after getting jockeyed around on news out of Saudi Arabia that police had opened fire on protesters with rubber bullets. Let’s look at how this influenced the markets in a different way than one might at first imagine. Like other recent uprisings in the Middle East, Saudi protesters are looking for more democracy, the right to elect public officials, greater civil rights, freedom of expression, more women's rights and a higher minimum wage. Interestingly, however, oil fell last week, despite the news. Why? Shouldn't unrest in Saudi Arabia - the world's largest oil producer, push prices higher? Yes, but that news was offset by the earthquake in Japan. That’s because Japan is a huge importer of oil... and the market senses that the earthquake and subsequent tsunami may create an economic slowdown and diminish the demand for oil. Seeing that Mortgage Bonds are lower - even in the face of weak Stocks and enormous uncertain global news - tells us that the gains in Bonds are not coming with a lot of conviction and Traders are selling into this strength. This is because a lot of headwinds remain for Bonds - like inflation abroad, rising government debt and continued QE2 purchases. This is a good example of why it is important to work with a mortgage professional that understands not only what was reported in the news, but also how the many cross currents may have alternating effects on everything from Bonds, Stocks, Oil to the US Dollar. |
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"Double dose!" is the phrase of the week, as we’ll see multiple reports this week focusing on the same segments of the economy: - We’ll start off with some big news Tuesday, when the Federal Reserve holds its FOMC meeting and releases its Policy Statement later that afternoon. As always, what the Fed says about the economy, inflation, and its Quantitative Easing program could have an impact on home loan rates.
- There’s a double dose of real estate news with Wednesday’s release of data on Housing Starts and Building Permits in February. Check back with me on Wednesday to get the breakdown of how the news actually arrived!
- There’s also a double dose of manufacturing news. Tuesday’s Empire State Index looks at New York State’s manufacturing sector and is a good gauge of manufacturing overall, while on Thursday we’ll also see another important manufacturing report in the Philadelphia Fed Index.
- A double dose of inflation news also comes our way this week with Wednesday’s Producer Price Index Report, which highlights inflation at the wholesale level, and Thursday’s Consumer Price Index Report, measuring inflation for consumers like you and me! Remember: The Fed is intent on creating inflation, which is unfriendly to home loan rates, and signs of inflation from these reports could be unfavorable for rates.
- Thursday we’ll get a read on employment with the weekly Initial Jobless Claims Report. Initial Jobless claims rose 26,000 in the latest week to 397,000, which was above expectations but still below that psychological barrier of 400,000.
- Finally, on Thursday we’ll see a double dose of manufacturing data with the release of reports on Capacity Utilization and Industrial Production in February. The capacity utilization rate provides an estimate of how much factory capacity is in use. If the utilization rate climbs too high it can lead to inflationary bottlenecks in production. The Federal Reserve watches this report closely and decides how to set interest rates on the basis of whether production constraints are threatening to cause inflation.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see by the arrows in the chart below, Bond prices experienced some up-and-down volatility last week, but ended the week near where they began - meaning home loan rates are still near historic lows. So what should you do if you or someone you know is in the market for a new home? The bottom line is that even if housing were to drop a little further in some areas, the affordability coming from today's rates serves as a backstop against any moderate price reduction. Remember, housing will likely be in a much better position in the second half of the year and at that time rates could be a bit higher. Now’s the time to take advantage of the combination of low rates and affordable housing. Call or email today to get started. |
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Daylight Saving Time (DST) begins on Sunday, March 13, 2011. The way we refer to time zones also changes. For example, Eastern Standard Time (EST) becomes Eastern Daylight Time (EDT). But remember, some areas of the United States don’t use DST, such as Arizona, Puerto Rico, Hawaii, the US Virgin Islands and American Samoa. Benefits of Daylight Saving Time Despite some concerns, Americans overwhelmingly like Daylight Saving Time. There is simply more sunlight in the evenings to enjoy the outdoors and get things done. Plus, additional hours of daylight can help save energy on a national scale - as much as 100,000 barrels of oil per day according to some estimates. And brighter is safer. Studies have shown that the DST shift reduces traffic accidents. Additionally, a study by the US Law Enforcement Admin also determined that crime is consistently lower during DST, with violent crimes down as much as 10% to 13%. For many crimes, like mugging, darkness is a factor--so more light in the evening hours reduces these types of crimes. Cons of Daylight Saving Time Not everyone benefits from DST. For example, many farmers say that DST has a negative impact on their livestock’s natural schedules. The airline industry also reports that it costs millions of dollars to adjust time schedules - and even then, airlines report numerous problems with international flight connections during the transition time since DST isn’t followed uniformly around the world. Interesting DST Facts - A man was actually able to avoid the draft for the Vietnam War using a Daylight Saving Time loophole. When he was born, it was just after midnight, DST. When he was drafted, he successfully argued that in his home state of Delaware, standard time - not DST - was the official time for recording births. So he was technically born on the previous date - which had a much higher draft lottery number - and he was able to avoid being drafted.
- In September 1999, the West Bank was on Daylight Saving Time, while Israel had switched back to standard time. A group of West Bank terrorists prepared some timed bombs. Unfortunately for them, they misunderstood the time change and the bombs exploded early - killing the terrorists themselves rather than the intended victims, two busloads of innocent citizens.
- In the 1950s and 60s, each state and locality was permitted to choose start and end DST dates as they desired. During 1965, Minneapolis and St. Paul - which are considered one metropolitan area - didn't agree on start dates, and for a period of time, these Twin Cities had a one hour time change between them. And on one Ohio to Virginia bus route, passengers technically had to change their watches seven times in 35 miles!
- To keep to their published timetables, Amtrak trains cannot leave a station before the scheduled time. So when the clocks "fall back" in the fall, all trains that are running on time actually stop at 2 am - the official time of DST change - and wait one hour before resuming their routes. In the spring, the routes instantaneously become one hour behind schedule, but they just keep going and do their best to make up the time.
Finally, since many electronic devices and computer programs are set to adjust to DST based on the old dates, they may not change automatically on March 13. So, you’ll want to double-check all of your devices and confirm that the time is correct.
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Economic Calendar for the Week of March 14-18, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 14 - March 18 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. March 15 | 08:30 | Empire State Index | Mar | 17.0 | | 15.43 | Moderate | | Tue. March 15 | 02:15 | FOMC Meeting | Mar | | | | HIGH | | Wed. March 16 | 08:30 | Housing Starts | Feb | 551K | | 596K | Moderate | | Wed. March 16 | 08:30 | Building Permits | Feb | 570K | | 562K | Moderate | | Wed. March 16 | 08:30 | Producer Price Index (PPI) | Feb | 0.6% | | 0.8% | Moderate | | Wed. March 16 | 08:30 | Core Producer Price Index (PPI) | Feb | 0.2% | | 0.5% | Moderate | | Thu. March 17 | 10:00 | Index of Leading Econ Ind (LEI) | Feb | 0.9% | | 0.1% | Low | | Thu. March 17 | 09:15 | Capacity Utilization | Feb | 76.5% | | 76.10% | Moderate | | Thu. March 17 | 09:15 | Industrial Production | Feb | 0.6% | | -0.1% | Moderate | | Thu. March 17 | 08:30 | Core Consumer Price Index (CPI) | Feb | 0.1% | | 0.2% | HIGH | | Thu. March 17 | 08:30 | Consumer Price Index (CPI) | Feb | 0.4% | | 0.4% | HIGH | | Thu. March 17 | 08:30 | Jobless Claims (Initial) | 3/12 | 387K | | 397K | Moderate | | Thu. March 17 | 10:00 | Philadelphia Fed Index | Mar | 28.0 | | 35.9 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% .250% Point Fee 15 Yr Fixed 4.125% .500% Point Fee Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.500% -0- Points 5/1 Arm 4.000% .125% Point Fee FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .625% Point Credit 5/1 ARM 3.750% .625% Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. For the Month of March 2011 --- Vol. 6, Issue 3 | |
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| | | | | | "Push past the boundary lines that I have drawn." Those lyrics by singer Andrew McKnight remind us that boundaries are often just imaginary lines, so it’s no surprise when things spill over. This issue is all about pushing past boundaries and the impact on your finances: - The Impact of Global Unrest?– The recent rise in Stocks may be good news for businesses and retirement accounts, but what does it mean for other aspects of the economy, including housing? Read the article below to find out.
- Need More Time? –The filing deadline is approaching quickly. Here’s what you should do if you need to go beyond the deadline for preparing – or paying – your taxes!
- Q&A: Different Tax Deadline?– The deadline to file your taxes was pushed back a few days this year. Find out why.
As always, feel free to forward this newsletter to friends, family members and coworkers who may find the information helpful. And if you have any questions or would like to discuss your unique situation, call or email today. | |
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| | | | | |  The tax deadline is still more than a month away, but it's approaching quickly. If you think you'll have trouble completing and filing your taxes on time, remember that it's crucial that you request and extension rather than not filing and hoping the government doesn't notice. If you need more time to file your taxes, you can submit Form 4868 for a six-month extension. You can learn more about extensions on the IRS website.
Problems Paying? What do you do if you've completed your tax returns only to find out that you owe way more to Uncle Sam than you were expecting - or worse, that your tax bill is more than you can possibly afford to pay right now? Don't worry. If this is the case, you're not alone... especially in today's economy. And, more importantly, you're not going to jail just for being a little short on cash. Rest assured, the IRS only seeks criminal charges for those who the agency can prove intentionally chose not to file and pay taxes. So, even if you can't pay your bill right away, file your return on time, and not only will you stay off the IRS's bad side, you'll avoid some hefty financial penalties in the process. Penalties and Interest Charges According to the IRS, the penalty for filing late is generally 5% per month, or up to 25% of the total tax amount due. Not to mention interest charges, which the IRS changes quarterly. This interest applies to the unpaid balance, penalties, and to any interest that has been charged to the account as well. If no effort is made to pay back-taxes, the IRS can impose stricter penalties, including levying bank accounts, wages, other income, or taking other assets like houses and cars. A Federal Tax Lien could also be filed, which could ruin your credit history for years to come. The penalty for filing on time but paying late, however, is much lower. If you choose an installment plan to pay your debt, interest will accrue on the unpaid debt amount only. Therefore, when you file your return, pay as much as you can to help cut down the penalties. Delayed Collection If you absolutely cannot pay any part of your tax bill, the IRS may temporarily delay collection until your financial situation improves, although interest and penalties will accrue throughout this time. But this extension is reserved for what the IRS calls "significant hardship." Your best bet is to talk to a CPA or tax professional if you cannot pay any part of your tax bill. Whatever you do, DON'T just ignore the bill and assume the government will forget about it. Assess the situation, seek help from a tax professional, and make a plan to address the situation. | |
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| | | | | | QUESTION: This year, instead of your taxes being due on Friday, April 15, you’ll have a few extra days to complete and file your taxes. That means your tax filing isn’t due until Monday, April 18, 2011. But why was it changed? ANSWER: The three extra days have been added because of Emancipation Day, which is a little-known Washington, D.C. holiday that celebrates the freeing of slaves in the district. The holiday actually falls on Saturday, April 16 this year, but will officially be observed on Friday, April 15. As a result, the IRS pushed the filing deadline to Monday, April 18 - since the tax code states that filing deadlines can’t fall on Saturdays, Sundays or holidays. Despite this short extension, the filing deadline is approaching quickly. Don’t wait until the last minute to get your paper work in order. And remember to ask a tax professional for help on complex rules or deductions. | |
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Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. | For the week of Feb 28, 2011 --- Vol. 9, Issue 9 |
Last Week in Review: Mortgage Bonds were pushed and pulled by fear and uncertainty. Read what it means to home loan rates. Forecast for the Week: It doesn’t get much bigger than this! Here’s a sneak peek of the high-impact reports due out this week. View: You could slash your tax bill by up to $1,000 for each qualifying child! Read below to find out how. |
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"Fear comes from uncertainty," wrote the poet William Congreve. Last week, however, the markets were moved by fear and by uncertainty that were unrelated. On the one hand, unrest in the Middle East drove up Oil prices and pushed investors into the safety of Bonds - while on the other hand, fear of inflation limited the gains that Bonds experienced. To see how those elements impacted home loan rates, let’s take a deeper look at each.  First, the global unrest in the Middle East continues to impact the markets. The protests that started a few weeks ago in Tunisia and Egypt have now spread to Bahrain, Yemen and Libya. Libya is of particular concern to the markets, since it is the largest holder of oil reserves in Africa. With the thought of Oil fields at risk and with no foreseeable resolution in the near term, Oil spiked as much as $12 a barrel higher last week - climbing over the mark of $100 per barrel. Remember, high oil prices aren't good for anything; they’re tough on the economic recovery, and they’re inflationary. And in terms of your wallet, the recent spike in oil has only just begun to translate to pumps across the country, so you can expect to see higher prices in the coming weeks. In addition to higher Oil prices, the unrest is creating fear and doubt in Traders’ minds about what might happen. And when Traders are uncertain, they tend to move money into the relative safety of Bonds, which offer lower returns but also lower risks. This flood of money into Bonds - including Mortgage Bonds - helps prices and home loan rates improve. And sure enough, last week Mortgage Bonds traded higher, as protests and uncertainty permeated throughout the Middle East. On the other hand, those gains in Bonds have been limited by fears of inflation down the road. That’s because investors demand a higher yield now to offset their concerns that future inflation will eat into their returns. That was evidenced by the tepid buying demand in last week's Treasury auctions. And as the economy continues to slowly expand and inflation fears grow, rates will gradually move higher over time. The bottom line is that global unrest has been a driving force behind improvement in the Bond market... and that it may continue to do so in the coming weeks. But at the same time, it’s important to remember that those gains are fleeting and have even been limited by inflation fears - so the positive picture for Mortgage Bonds and home loan rates won’t last long. Now’s the time to look at your unique situation and take action. It only takes a few moments to sit down and see how the national and international news may help you benefit from a refinance or the purchase of a new home. Call or email today to get started. Or forward this newsletter on to someone you know who may benefit from today’s historically low rates. |
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In addition to monitoring the unrest in the Middle East, we have a big week of economic reports on our hands - with the big news coming on Friday! Here’s a highlight of what to watch: - The week starts off Monday morning with reports on Personal Spending and Personal Income, as well as Pending Home Sales. The Pending Home Sales report comes after last week’s Existing Home Sales release, which came in better than anticipated... but the National Association of Realtors who reports all these numbers is under fire for possible overestimation in the past few years.
- On Monday, we’ll also see the Personal Consumption Expenditures (PCE) Index, which is the Fed's favorite gauge of inflation. Remember, inflation fears have grown and have been limiting the gains that Bonds experience. In fact, the inflation reading in last week’s GDP release was hotter than previously reported - and that coincides with the recent Consumer Price Index trend, which saw a hot 0.4% month-over-month gain during each of the past two months. So the markets and the Fed will definitely be keeping a close eye out for the PCE report this week!
- Manufacturing reports will also hit the newswires this week. On Monday, we’ll see the Chicago PMI, which reports on manufacturing in Chicago and is a good indicator of overall economic activity. Then on Tuesday, we’ll see the ISM Index, which is the king of all manufacturing indices and is considered the single best snapshot of the factory sector.
- The big topic of the week will be employment. First up is the ADP National Employment Report on Wednesday, which measures non-farm private employment, followed by another round of Initial Jobless Claims on Thursday. In last week’s report, Initial Jobless Claims were reported lower than the expectations. Normally, this would have applied pressure on the Bond market, but again the unrest in the Middle East is trumping this data.
- Finally, the busy week culminates with the highly anticipated monthly Jobs Report on Friday. This report features new data regarding job growth and the unemployment rate - needless to say, this report can be a big market mover!
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The important thing to notice in the chart below is the direction on the right side of the chart. As you can see, Bond prices moved upward, which is good news for home loan rates. One of the major reasons for this movement was the ongoing unrest and uncertainty in the Middle East, which prompted Traders to move money into the relative safety of Bonds. As a result, now is an ideal time to take advantage of the historically low home loan rates. If you or someone you know is looking to refinance or purchase a home, call or email to find out how you can benefit. |
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Take Credit for Your Kids Each qualifying child could slash your tax bill by up to $1,000. By Mary Beth Franklin, Kiplinger.com Thanks to a flurry of year-end tax legislation, eligible families will continue to benefit from a $1,000 tax credit for each child under age 17 when they file their 2010 taxes -- and for each of the next two years. (A tax credit, which reduces your tax bill dollar-for-dollar, is more valuable than a tax deduction, which merely reduces the amount of income that is taxed.) In these tough economic times, when many families have seen their income slashed, some taxpayers also may qualify for an expanded Additional Child Tax Credit, which could trigger a refund even if no tax is due. Basic child credit You can claim a tax credit of up to $1,000 for each of your children under age 17 as long as you meet the income eligibility requirements. The qualifying child must satisfy the relationship and residency test and not have provided more than half of his or her own support. Barring further congressional action, the child tax credit is scheduled to revert to $500 per qualifying child on January 1, 2013. The child credit phases out in $50 increments for each $1,000 (or fraction thereof) by which your adjusted gross income (AGI) exceeds $75,000 for individuals or $110,000 for married couples filing jointly ($55,000 for married filing separately). The income level at which the credit completely disappears depends on the number of qualifying children. For example, a married couple filing jointly with one child would lose the credit completely when their income topped $129,001. But with two children, they could claim at least part of the child credit until their income exceeded $149,001, and with three children, the credit would disappear once their AGI topped $169,001. Use Form 8812 to claim the child tax credit. Refundable credit Some low-income families qualify for a refundable child tax credit, which was increased significantly as a result of the economic stimulus package passed in 2009. Lowering the income threshold to $3,000 boosts the size of the refund available to qualifying taxpayers. It’s designed to put cash in the hands of Americans who may have lost their jobs or had their hours cut back during this recession. For example, a single mother of two children with $10,000 of earned income would owe no tax after claiming a standard deduction and personal exemptions for each member of her household. So the $2,000 child credit normally would go to waste because she owes no tax. But under the revised law, she is able to claim a refundable tax credit worth the lesser of the unused child tax credit - in this case $2,000 - or 15% of her earned income that exceeds the $3,000 threshold. In this example, her $7,000 of income over the threshold would translate into a refund of $1,050. Child-Care credit If you pay someone to watch your child while you and your spouse work - or while you are looking for work - you may be able to write off some of your expenses for children up to age 13 or older children who are physically or mentally disabled. You can claim a tax credit for a portion of your expenses or use a flexible spending account at work, which allows you to pay your child-care costs with pretax dollars. The child-care tax credit covers 20% to 35% of what you spend, depending on income. Taxpayers with AGIs of $15,000 or less get the top credit of 35%, and the rate gradually declines until it bottoms out at 20% for taxpayers with income above $43,000. The maximum credit is $3,000 for one child and $6,000 for two or more children. The flex plan is often a better deal for higher-income workers because the money set aside for child-care costs not only escapes income tax, it also avoids the 7.65% Social Security and Medicare tax. So if you’re in the 25% federal tax bracket, running the maximum $5,000 of child-care expenses through your flex plan avoids a 32.65% tax hit, lowering your tax bill by $1,633. You'll save even more if your FSA contribution escapes state income taxes, too. If the flex plan is better for you, note this twist: Although you can’t shelter more than $5,000 in a flex plan, the maximum child-care credit for two or more children is $6,000. So even if you max out your flex plan, you may be able to claim up to $1,000 of additional expenses through the child-care credit. That could lower your tax bill by $200 or more. Reprinted with permission. All Contents ©2011 The Kiplinger Washington Editors. www.kiplinger.com.
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Economic Calendar for the Week of February 28 - March 4, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of February 28 - March 04 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. February 28 | 08:30 | Personal Income | Jan | 0.1% | | 0.4% | Moderate | | Mon. February 28 | 08:30 | Personal Spending | Jan | 0.4% | | 0.7% | Moderate | | Mon. February 28 | 08:30 | Personal Consumption Expenditures and Core PCE | Jan | 0.1% | | 0.0% | HIGH | | Mon. February 28 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 0.7% | HIGH | | Mon. February 28 | 09:45 | Chicago PMI | Feb | 67.5 | | 68.8 | HIGH | | Mon. February 28 | 10:00 | Pending Home Sales | Dec | -3.2% | | 2.0% | Moderate | | Tue. March 01 | 10:00 | ISM Index | Feb | 60.5 | | 60.8 | HIGH | | Wed. March 02 | 02:00 | Beige Book | | | | | Moderate | | Wed. March 02 | 08:15 | ADP National Employment Report | Feb | 163K | | 187K | HIGH | | Thu. March 03 | 08:30 | Jobless Claims (Initial) | 2/26 | 400K | | 391K | Moderate | | Thu. March 03 | 08:30 | Productivity | Q4 | 2.7% | | 2.6% | Moderate | | Thu. March 03 | 10:00 | ISM Services Index | Feb | 59.0 | | 59.4 | Moderate | | Fri. March 04 | 08:30 | Non-farm Payrolls | Feb | 172K | | 36K | HIGH | | Fri. March 04 | 08:30 | Unemployment Rate | Feb | 9.1% | | 9.0% | HIGH | | Fri. March 04 | 08:30 | Average Work Week | Feb | 34.2 | | 34.2 | HIGH | | Fri. March 04 | 08:30 | Hourly Earnings | Feb | 0.2% | | 0.4% | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.000% .125% Point Fee 15 Yr Fixed 4.250% .125% Point Credit Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.625% -0- Points 5/1 Arm 4.125% .125% Point Fee FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .250% Point Credit 5/1 ARM 3.625% .375% Point Fee As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. | For the week of Feb 14, 2011 --- Vol. 9, Issue 7 |
Last Week in Review: Uncertainty in Egypt and in the Bond market make for a back-and-forth week! Read below to see how Bonds and home loan rates fared. Forecast for the Week: This week’s schedule picks up with big reports on sales, manufacturing, and inflation. Find out what you need to watch! View: If you don't live close enough to an elderly parent to help with daily money tasks, what can you do to help them? Here’s your answer! |
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"Should I stay or should I go now? If I go there will be trouble, and if I stay there will be double!" - The Clash. The unrest in Egypt has been boiling for the past few weeks, as protestors took to the streets and Egyptian President Hosni Mubarak contemplated whether to stay in power... or step down.  And any time there’s uncertainty, there is sure to be movement in the markets. For example, oil prices rose Thursday morning after rumors spread through the media that Mubarek would step down later that night. In the end, Mubarek didn’t officially step down until Friday morning, at which point the streets of Cairo erupted in celebration, oil moved lower again, and the Stock market ticked up in hopes that the uncertainty in Egypt would soon be a memory. Of course, Cairo wasn’t the only place that has been reacting to uncertainty lately - and we don’t have to look any further than Mortgage Bonds and home loan rates as an example. To say that Bonds have had a rough time lately would be a bit of an understatement, as Bond pricing and home loan rates worsened very significantly over the past week and a half. By the end of last week, however, Bonds looked like they were beginning to stabilize... at least for now. Impacting Bonds last week were a number of remarks by Fed members, including Fed Chairman Ben Bernanke who spoke on Capitol Hill, saying it will take several more years before the unemployment rate returns to a more normal level, and that lawmakers need to act to reduce the country’s deficit. The recent tough times for Bonds and home loan rates underscores the current opportunity... rates are still relatively low, but gradually creeping higher. This makes now an ideal time for consumers to take advantage of the still historically low rates. If you or someone you know is in the market for a new home or to review your home loan, now’s the time to act. |
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After last week’s slow schedule of economic reports, we’ll see some influential reports this week... that have the potential to really move the markets. - We’ll start off Tuesday morning with the January report of Retail Sales, which is considered a timely indicator of broad consumer spending patterns.
- We’ll also see manufacturing news this week with Tuesday’s Empire State Index, which looks at New York State’s manufacturing sector and is a good gauge of manufacturing overall. Then on Thursday, we’ll see the Philadelphia Fed Index, which is another important manufacturing report. Those two indices have the potential to impact the market, since they indicate the health of the manufacturing sector in the U.S.
- More news is headed our way on Wednesday with the Producer Price Index (PPI), which measures inflation at the wholesale level. Then, the very next day on Thursday morning, we’ll see the Consumer Price Index (CPI) with a look at inflation at the consumer level. In light of last week’s news about inflation concerns around the globe - including in China and Brazil - it will be important to see what these reports reveal. Remember, inflation is important to keep an eye on because it is the archenemy of Bonds and home loan rates.
- Wednesday will also bring more housing industry news with reports on the number of Housing Starts and Building Permits in January.
- Finally, the busy week of reports caps off Thursday with the Initial Jobless Claims report. Last week’s report showed that Initial Jobless Claims hit the lowest weekly reading since July 2008. Overall, the labor market appears to be slowly gaining positive traction... and further improvement will lead to an improvement in the housing market, but also higher rates over time.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates have had a tough time recently, but were able to stabilize at the end of last week. In the end, Bonds and home loan rates finished the week just slightly below where they started, but home loan rates are still near historic lows for now. |
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Help Elderly Parents From a Distance If you don't live close enough to mom and dad to help them with daily money tasks, there are professionals who can. By Cameron Huddleston, Kiplinger.com Regular readers of the Kip Tips column know that I've written a lot about helping parents with their finances because I have had to help my mother, who is diagnosed with Alzheimer's disease, with hers. In the March issue of Kiplinger's Personal Finance magazine, I write in detail about how to manage your parents' money when they no longer can. What do you do, though, if you're three states away from Mom or Dad and can't be there every day to help? Children who don't live near their parents and can't be there to monitor the mail or take over the bills may be able to hire a geriatric-care manager or daily money manager. Check the Web sites of the National Association of Professional Geriatric Care Managers and American Association of Daily Money Managers to locate one of these professionals. The adult-protective-services office where your parents live should have a list of nonprofit organizations that offer these services at little or no cost. Make sure the organization is bonded and insured (ask for proof), and speak with others who have used its services. For more about helping your parents with their finances, see all my columns on the topic: Reprinted with permission. All Contents ©2011 The Kiplinger Washington Editors. www.kiplinger.com.
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Economic Calendar for the Week of February 14-18, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of February 14 - February 18 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. February 15 | 08:30 | Retail Sales | Jan | 0.5% | | 0.6% | HIGH | | Tue. February 15 | 08:30 | Retail Sales ex-auto | Jan | 0.6% | | 0.5% | HIGH | | Tue. February 15 | 08:30 | The Empire Manufacturing Survey - New York State | Fed | 16.0 | | 11.92 | HIGH | | Wed. February 16 | 08:30 | Producer Price Index (PPI) | Jan | 0.7% | | 1.1% | Moderate | | Wed. February 16 | 08:30 | Building Permits | Jan | 580K | | 635K | Moderate | | Wed. February 16 | 08:30 | Housing Starts | Jan | 540K | | 529K | Moderate | | Wed. February 16 | 08:30 | Core Producer Price Index (PPI) | Jan | 0.2% | | 0.2% | Moderate | | Wed. February 16 | 09:15 | Capacity Utilization | Jan | 76.2% | | 76.0% | Moderate | | Wed. February 16 | 09:15 | Industrial Production | Jan | 0.6% | | 0.8% | Moderate | | Thu. February 17 | 08:30 | Core Consumer Price Index (CPI) | Jan | 0.1% | | 0.1% | HIGH | | Thu. February 17 | 10:00 | Index of Leading Econ Ind (LEI) | Jan | 0.2% | | 1.0% | Low | | Thu. February 17 | 10:00 | Philadelphia Fed Index | Feb | 21.9 | | 19.3 | HIGH | | Thu. February 17 | 08:30 | Consumer Price Index (CPI) | Jan | 0.3% | | 0.5% | HIGH | | Thu. February 17 | 08:30 | Jobless Claims (Initial) | 2/12 | 410K | | 383K | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% .125% Point Credit 15 Yr Fixed 4.625% .250% Point Credit Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% -0- Points 5/1 Arm 4.375% .125% Point Fee FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% .250% Point Credit 5/1 ARM 3.750% .500% Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(970) 759-2671 Cell
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
| For the week of Jan 31, 2011 --- Vol. 9, Issue 5 |
Last Week in Review: Food and fire for the housing market. Read below to discover what happened. Forecast for the Week: High-impact reports hit the markets...with the big news coming this Friday! Special Video View: Don’t pay more than you have to in taxes. Watch this special video now! |
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"A house is not a home unless it contains food and fire for the mind as well as the body." - Benjamin Franklin. Last week, the housing market received some food and fire for the mind, but not everyone was at home with the news.  First, the good news. The housing market received a serving of good news last week, as New Home Sales reportedly rose 17.5% in December to come in better than expectations. Overall, the report demonstrated that housing continues to recover - albeit slowly. Despite that good news though, the markets were keyed in on another more important event last week: the release of the Fed’s Interest Rate Decision and Monetary Policy Statement. As expected, the Fed made no change to the Fed Funds Rate and even the Policy Statement was pretty much the same. But that didn’t stop the markets from getting a little fired up about the release. Let’s take a look at why. It’s important to understand that the Fed has to be very careful with how bullish their economic comments are, as they don't want to see long-term rates move higher. Well, the Fed's comments certainly were not bullish as they said "employers remain reluctant to add to payrolls" and "the housing sector remains depressed." So why did Bonds initially improve nicely on the news and then crumble later in the day? The answer is, not everyone in the trading pits is buying what the Fed is saying. Instead, some people believe the Fed is talking down the true underlying strength of the economy, so that it can justify injecting the full $600 Billion of Quantitative Easing into the economy. Speaking of comments that impacted the markets... President Obama delivered his State of the Union Address to members of Congress last week. Although the President’s call for a freeze on discretionary spending for 5 years may appear to be Bond bullish in that any reduction in the deficit would be good for Bonds, the reality is that so much more has to be done to really get our long-term debt in check. And some of last week’s weakness in Bonds was likely attributed to the feeling that the speech came and went without any real sense that the deficit is going to be reduced in a meaningful way, especially in the near term. The Bond market probably would have liked the word "cut" in spending rather than "freeze," since a "freeze" suggests only a temporary halt in spending at current levels. In the end, the news last week demonstrated that economic conditions are improving, but they are doing so gradually. As a result, the market remains volatile, as Bonds and home loan rates move up and down depending on what reports or speeches hit the news wires. The good news is that despite the volatility, home loan rates remain extremely low for now and present a tremendous opportunity for buyers who lock in at the opportune moment. To learn more about the volatility and how you or someone you know can benefit from a knowledgeable advisor like myself, please call or email today. I’ll be happy to discuss the current economic climate and what it means to your unique situation. |
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The markets will continue to watch the political unrest in Egypt closely this week. In addition, a number of high-impact reports will hit this week with the big news coming this Friday! - We start off right away Monday morning with reports on Personal Spending and Personal Income, as well as the Personal Consumption Expenditures (PCE) Index, which is the Fed's favorite gauge of inflation.
- Manufacturing will also be in the news this week. On Monday, we’ll see the Chicago PMI, which surveys more than 200 Chicago purchasing managers about the manufacturing industry and is a good indicator of overall economic activity. Then on Tuesday, the ISM Index will be released. This is the king of all manufacturing indices and is considered the single best snapshot of the factory sector.
- The big topic of the week will be employment. First up is the ADP National Employment Report on Wednesday, which measures non-farm private employment.
- The ADP report will be followed by another round of Initial Jobless Claims on Thursday. In last week’s report, Initial Jobless Claims came in well above expectations. We shouldn’t read too much into that spike, since weather could have played a sizable role in the jump. However, if readings over the next couple weeks don't settle back down closer to the 400,000 level, there may be reason for concern.
- Finally, the busy week culminates in the all-important Jobs Report on Friday. This report features new data regarding Non-Farm Payrolls, the Average Work Week, Hourly Earnings and the Unemployment Rate. Needless to say, this report can be a big market mover!
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds received a bit of a bump at the end of last week, helping home loan rates recover from losses earlier in the week. This boost was prompted by political turmoil in Egypt that had investors seeking the safety of Bonds. As a result, home loan rates are still near historic lows, making this a perfect time to see how you or someone you know can benefit! Call or email today to get started. |
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 The Power of Tax Planning No one wants to pay more in taxes then they have to. And believe it or not, the tax code actually contains plenty of opportunity to save...but you must plan correctly. Check out this video from Kiplinger.com to put the power of tax planning to work for you.
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Economic Calendar for the Week of January 31 - February 4, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of January 31 - February 04 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. January 31 | 08:30 | Personal Income | Dec | 0.5% | | 0.3% | Moderate | | Mon. January 31 | 08:30 | Personal Spending | Dec | 0.6% | | 0.4% | Moderate | | Mon. January 31 | 08:30 | Personal Consumption Expenditures and Core PCE | Dec | 0.1% | | 0.1% | HIGH | | Mon. January 31 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 0.8% | HIGH | | Mon. January 31 | 10:00 | Chicago PMI | Jan | 65.0 | | 68.6 | HIGH | | Tue. February 01 | 10:00 | ISM Index | Jan | 58.2 | | 57.0 | HIGH | | Wed. February 02 | 08:15 | ADP National Employment Report | Jan | 150K | | 297K | HIGH | | Thu. February 03 | 10:00 | ISM Services Index | Jan | 57.0 | | 63.5 | Moderate | | Thu. February 03 | 08:30 | Jobless Claims (Initial) | 1/29 | 425K | | 454K | Moderate | | Thu. February 03 | 08:30 | Productivity | Q4 | 2.2% | | 2.3% | Moderate | | Fri. February 04 | 08:30 | Non-farm Payrolls | Jan | 150K | | 103K | HIGH | | Fri. February 04 | 08:30 | Unemployment Rate | Jan | 9.6% | | 9.4% | HIGH | | Fri. February 04 | 08:30 | Average Work Week | Jan | 34.3 | | 34.3 | HIGH | | Fri. February 04 | 08:30 | Hourly Earnings | Jan | 0.2% | | 0.1% | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% .250% Points 15 Yr Fixed 4.250% .250% Points Credit Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.500% -0- Points 5/1 Arm 4.250% -0- Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .375% Point Credit 5/1 ARM 3.250% -0- Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
| For the week of Jan 24, 2011 --- Vol. 9, Issue 4 |
Last Week in Review: The US Dollar has dropped. Find out why and what it could mean to home loan rates! Forecast for the Week: A full load of economic reports hits the markets. Read what they are and why they matter. View: How much can you deduct for driving? Discover what’s changed...and how you can benefit! |
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"Bet your bottom Dollar?" These days the more appropriate question is: Where is the bottom of the Dollar? That’s because the US Dollar is starting 2011 in very poor fashion, with its value dropping relative to other currencies.  Let’s take a look at why... and what this could mean for home loan rates! 1. Some of the Dollar’s drop is attributed to the recent strength in the Euro, which has gotten a boost from some positive stories of late, like Spain and Portugal's ability to sell debt in the Bond market without crisis. But the question is...have Europe's problems gone away? No - there will be more problems ahead for the region and as they emerge, we should see a reversal in the Euro's strength along with improvement in the US Dollar. 2. Another reason for the Dollar's weakness is the Fed’s Quantitative Easing (known as QE2). Remember, while it would never be officially stated, one of the implicit aims of QE2 is to devalue the US Dollar in order to boost our exports and thus GDP. At this point, the weakening US Dollar hasn't had a big negative effect on the US Bond market, but should the Dollar materially weaken, it could make US denominated assets like US Bonds less valuable and desirable amongst global investors...and it has been these foreign investors, like China, who have supported the US Bond market for years by purchasing our debt. Remember, home loan rates are tied to Mortgage Backed Securities, which are a type of Bond. So negative news for Bonds would also be bad news for home loan rates. In housing news last week, Existing Home Sales for December were reported much better than expected. The jump in sales is likely attributed in part to the recent trend of rising home loan rates, which has prompted many homebuyers to take advantage of the still low home loan rates. Building Permits - which signal future construction - also came in better than expected last week, surging 17% in December. Relatively speaking, 2011 looks to be a good year for the housing industry. There will still be some areas that suffer price declines and those will be where foreclosure backlogs overhang and where unemployment rates are even higher than the national average. But housing has bottomed out in many areas and should see more of a pick up in the second half of 2011. And although home loan rates will likely rise slightly as the year progresses, they are still near all-time lows right now. That means homebuyers still have a tremendous opportunity in front of them. If you or someone you know is considering purchasing a home, the combination of low home loan rates and affordable home prices make this an ideal time. Call or email today to discuss how you can benefit from the current situation. |
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This week includes a full load of economic reports ranging from housing and the economy - but the big event will be the Fed Meeting. - We’ll start the week with a read on consumer attitudes with the Consumer Confidence report on Tuesday. That report will be followed by the Consumer Sentiment Index on Friday.
- We’ll also see additional housing news this week, with a report on New Home Sales in December due out Wednesday and the Pending Home Sales report for December due out Thursday.
- The Federal Reserve will also hold its FOMC meeting this Tuesday and Wednesday, with the Fed’s Policy Statement due for release Wednesday afternoon. There’s no chance for an interest rate hike at this meeting - but what the Fed says about the economy, inflation, and its Quantitative Easing program could have an impact on rates.
- Thursday’s weekly Initial and Continuing Jobless Claims Report will be important, as always. Last week Initial Jobless Claims came in below expectations and the 4-week moving average fell from the previous week. Those readings tell us the trend in the labor market is continuing to improve...albeit at a slower pace than historically seen at this stage within an economic recovery.
- We’ll also get a read on the economic recovery with Durable Good Orders on Thursday. This report gives us an update on consumer and business buying behavior on big-ticket items that are designed to last for an extended period of time, like furniture, televisions, appliances, vehicles, copy machines, and so on. It’s an interesting report, as people tend to hold back on these types of purchases when they are feeling a need to be extra conservative with their finances or feel insecure about their employment.
- The GDP report will be followed on Friday with reports on Gross Domestic Product (GDP) - which is the broadest measure of economic activity - and the Employment Cost Index (ECI). The ECI is one way to evaluate wage trends and the risk of wage inflation, as well as possible price pressures. This is important to the housing industry because if wage inflation threatens, it is possible home loan rates will rise through Bond prices dropping.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates continued their negative trend to end the week worse than where they started. |
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Mileage Rates for 2011 If you drive a car, truck or van for work, you’ll want to make sure you know the standard mileage rates that the Internal Revenue Service (IRS) has set for 2011. These mileage rates are used to calculate deductible costs for driving an automobile for business, charitable, medical and moving purposes. New for 2011 As of January 1, 2011, the standard mileage rates are as follows: - Businesses = 51 cents per mile driven
- Medical or moving = 19 cents per mile driven
- Charitable organizations = 14 cents per mile driven
You’ll notice that the 2011 rates for medical, moving, and business driving went up slightly, while miles driven for charitable organizations remained the same. For-Hire Now Qualifies! Beginning in 2011, taxpayers are allowed to use the business standard mileage rate for vehicles used for hire, such as taxicabs. Make Sure You Qualify Before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. However, the IRS is accepting public comments on this policy. Additional Option Although the IRS provides the standard mileage rate for ease and convenience, you're not required to use it. If you prefer, you can calculate the actual costs of using your vehicle instead of using the standard mileage rates. Remember, if you have questions are concerns, talk to a tax consultant or accountant to discuss your options and unique situation.
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Economic Calendar for the Week of January 24-28, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of January 24 - January 28 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. January 25 | 10:00 | Consumer Confidence | Jan | NA | | 52.5 | Moderate | | Wed. January 26 | 10:00 | New Home Sales | Dec | 300K | | 290K | Moderate | | Wed. January 26 | 02:15 | FOMC Meeting | Jan | unch | | 0.25% | HIGH | | Thu. January 27 | 10:00 | Pending Home Sales | Dec | NA | | 3.5% | Moderate | | Thu. January 27 | 08:30 | Durable Goods Orders | Dec | 1.9% | | -1.3% | Moderate | | Thu. January 27 | 08:30 | Jobless Claims (Initial) | 1/22 | NA | | 404K | Moderate | | Fri. January 28 | 08:30 | Gross Domestic Product (GDP) | Q4 | 3.8% | | 2.6% | Moderate | | Fri. January 28 | 08:30 | GDP Chain Deflator | Q4 | NA | | 2.1% | HIGH | | Fri. January 28 | 08:30 | Employment Cost Index (ECI) | Q4 | 0.4% | | 0.4% | HIGH | | Fri. January 28 | 10:00 | Consumer Sentiment Index (UoM) | Jan | NA | | 72.7 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.000% -0- Points 15 Yr Fixed 4.250% .125% Points Credit Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.500% .250% Points 5/1 Arm 4.250% -0- Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .250% Point Credit 5/1 ARM 3.375% -0- Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. | For the week of Jan 03, 2011 --- Vol. 9, Issue 1 |
Last Week in Review: Traders were singing one minute only to scream the next. Read below to see why! Forecast for the Week: How many high-impact reports can you fit in a week? Find out below. Video View: Which credit card is right for you? Discover how to decide... plus learn about new rules that impact you! |
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"Wild thing! You make my heart sing!" - By The Troggs. Traders found themselves singing one minute only to be screaming the next, as Bonds saw huge swings up and down of 100 basis points on multiple days last week. Remember, home loan rates are based on Mortgage Bond prices, so huge swings in Bonds causes home loan rates to shift as well. This underscores why it’s so important to work with a knowledgeable professional who understands how interconnected the market is and can help homeowners lock in at the most opportune times. To help make sense of the volatility, here’s a montage of the top 5 hits last week that Traders and Bond investors appeared to be singing... and why.  #1 "Monday, Monday... so good to me." - By The Mammas and the Papas Last week started out with Bond prices receiving a nice bump on Monday thanks to strong demand for the Treasury Department’s auction of $35 Billion in 2-Year Notes. #2 "Bonds in low places." - To paraphrase Garth Brooks On Tuesday, the Treasury Department auctioned off another $35 Billion... this time in 5-Year Notes, which carry more inflation risk. That auction wasn’t received nearly as well and sparked a sell off of Bonds. To make matters worse, the sell off was exacerbated by the ultra-thin holiday trading volume. In other words, with many Traders out of the office for the holidays, there simply weren’t enough buyers in the market to offset the selling. So when prices dropped on Tuesday, the selling pressure gained momentum with each sale and the losses grew more dramatic. The end result was a drop of 100 basis points in Bond prices! #3 "I’m Back. Bonds have lifted. And raised the gifted." - To paraphrase Kid Rock What a difference a day makes! Just one day after Bonds dropped 100 basis points, the opposite happened and Bonds saw a huge upswing. How was that even possible? Bargain hunting and a strong performance by the Treasury Department’s 7-Year Note auction were the catalysts behind the move, as buyers came out in droves and pushed Bonds up 119 basis points! #4 "Home sweet home!" - By Mötley Crüe Volatility wasn’t the only story that hit home last week. The final S&P Case-Shiller Home Price Index for the year was also released last week. According to the report, home prices in 20 metropolitan cities fell 0.8%, which was below the 0.1% improvement that was expected and the sharpest year-over-year decline in a year. This was not a good report, and when you consider more foreclosures coming to the market, it is likely that home prices could remain under pressure for part of 2011. Stubbornly high unemployment has played a role in seeing meaningful improvement in housing. #5 "You’re unbelievable!" - By EMF The volatility continued throughout the week, swinging another 54 basis points on Thursday alone. But in the end - through all the ups and downs - Bonds and home loan rates were able to finish the week strong. That means home loan rates are still unbelievably low as we start the new year. That means you still have something to sing about. Despite the overall negative trend, home loan rates are still near historic lows... at least for the time being. That may not be the case in the weeks and months ahead. Call or email today to start the process - it only takes a few minutes. |
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The new year kicks off with a bang, as nearly all of the reports due out this week are rated as having the potential for a high impact on the markets! - We start off right away Monday morning with the ISM Index. This is the king of all manufacturing indices and is considered the single best snapshot of the factory sector, so it has the potential to move the markets if it doesn’t meet expectations that it will come in better than the prior reading.
- Tuesday brings us the first release of FOMC Minutes of the year. Although the Fed has already released its policy statement, the markets will be examining the minutes closely for indications of the Fed’s thinking regarding important topics like inflation, rates, and the overall economy.
- We’ll also see some important employment news this week. First up is the ADP National Employment Report on Wednesday, which measures non-farm private employment. The report is expected to show fewer jobs created in December than the previous reading of 93,000 jobs created in November.
- The ADP Report will be followed the next day with another round of Initial Jobless Claims on Thursday. In last week’s report, Initial Jobless Claims was reported at the lowest level since July 2008. That was good news for the labor market, but we still need to see if this report was skewed by the holidays or if it was the start of a trend lower in new unemployment claims.
- The big news of the week will be the release of the all-important Jobs Report this Friday. The Average Work Week and Unemployment Rate are expected to hold steady, while Hourly Earnings and Non-Farm Payrolls are expected to rise.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The important thing to note in the chart below is that the overall trend for Bond prices has been downward, which is not good for home loan rates. But last week, Bonds were able to finish strong, which demonstrates that there are opportunities to benefit from positive shifts in the market and low home loan rates despite the overall negative trend. If you or someone you know has been thinking about purchasing or refinancing a home, call or email today to discuss your goals and how you can take advantage of these nice bumps in the Bond market.
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Chart: Fannie Mae 4.0% Mortgage Bond (Friday, December 31, 2010)  |
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Which Card is Right for You? These days, most people use at least one credit card and many of us use more than one. And while it's certainly important to avoid amassing large amounts of debt, it's also important to make sure you pick the right credit card for you. The following video from Kiplinger.com contains tips that can help you do just that.
// -------------------------- Economic Calendar for the Week of January 3-7, 2011 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of January 03 - January 07 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. January 03 | 10:00 | ISM Index | Dec | 58.0 | | 56.6 | HIGH | | Tue. January 04 | 02:00 | FOMC Minutes | 12/14 | | | | HIGH | | Wed. January 05 | 08:15 | ADP National Employment Report | Dec | 100K | | 93K | HIGH | | Wed. January 05 | 10:00 | ISM Services Index | Dec | 55.6 | | 55.0 | Moderate | | Thu. January 06 | 08:30 | Jobless Claims (Initial) | 01/01 | 405K | | 388K | Moderate | | Fri. January 07 | 08:30 | Non-farm Payrolls | Dec | 132K | | 39K | HIGH | | Fri. January 07 | 08:30 | Unemployment Rate | Dec | 9.8% | | 9.8% | HIGH | | Fri. January 07 | 08:30 | Hourly Earnings | Dec | 0.1% | | 0.0% | HIGH | | Fri. January 07 | 08:30 | Average Work Week | Dec | 34.3 | | 34.3 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% -0- Points 15 Yr Fixed 4.250% 0.125% Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.500% -0- Points 5/1 Arm 4.375% -0- Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .500% Point Credit 5/1 ARM 3.250% .125% Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
| For the week of Dec 27, 2010 --- Vol. 8, Issue 52 |
Happy Holidays - I wish you and yours all the very best during this season! As your Trusted Advisor, I sincerely hope you're enjoying your complimentary subscription to The Mortgage Market Guide Weekly. Since the Christmas holiday is being observed this week, your next full issue will arrive on Monday, January 3, 2011. In the meantime, please enjoy the article below which contains fun facts about the holiday season. Season's greetings to you. And if I may be of any assistance to you at this time, please feel free to contact me. |
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Fun Facts about the Holiday Season Santa Claus may live in the North Pole according to all those holiday stories, but did you also know that there’s a Santa Claus, Ind. (population 2,303) and a Santa Claus, Ga. (247)? And we can’t forget about Noel, Mo. (1,615); Snowflake, Ariz. (5,686); and, for those reindeer lovers, both the village of Rudolph, Wis. (418) and Dasher, Ga. (821). Here are some other fun facts to share with your family and friends this season, courtesy of the U.S. Census Bureau: - Potato latkes are a staple of Hanukkah celebrations, and in 2009 50.9% of potatoes in the U.S. were produced in Idaho and Washington.
- Last year, 14 percent of sales for department stores in all of 2009 occurred in December (the figure was 21 percent for jewelry stores).
- Book store sales jumped 98 percent from November to December, 2009.
- $1.2 billion of candles were shipped in 2008 by U.S. manufactures, and candles play a big part in a variety of holiday celebrations.
- Holly Springs, Miss., and Mount Holly, N.C. are just two of a dozen places named Holly in the United States.
- The U.S. is expected to have a population of more than 311 million once 2011 arrives.
May the rest of your holiday season be safe and joyful, and wishing you a very happy new year!
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Economic Calendar for the Week of December 27-31, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of December 27 - December 31 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. December 28 | 10:00 | Consumer Confidence | Dec | 56.1 | | 54.1 | Moderate | | Thu. December 30 | 08:30 | Jobless Claims (Initial) | 12/25 | NA | | NA | Moderate | | Thu. December 30 | 09:45 | Chicago PMI | Dec | 61.6 | | 62.5 | HIGH | | Thu. December 30 | 10:00 | Pending Home Sales | Nov | NA | | 10.4% | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.000% -0- Points 15 Yr Fixed 4.250% 0.375% Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.625% -0- Points 5/1 Arm 4.500% -0- Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .125% Point Credit 5/1 ARM 3.375% .250% Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
| For the week of Dec 13, 2010 --- Vol. 8, Issue 50 |
Last Week in Review: Are rates going to come back? Here’s a break down of possible scenarios! Forecast for the Week: Get ready for a busy week. Find out what you should watch. View: Know someone in college or headed there soon? Watch the video below for tips to avoid unexpected college costs. |
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"Where do we go from here?" That question from Alicia Keys’ song is on the minds of many Americans, as they wonder where home loan rates are headed after the recent negative news for Bonds.  Last week, Congress was busy at work on negotiations to extend the Bush-era tax cuts. That news kept a lid on any improvement for Bonds and home loan rates, due to the prospect of an ever-increasing deficit. And adding to the troubles for Bonds and home loan rates last week was news that inflation is growing in China... and growing fast. How does that impact us? Remember, it's a global economy, so Bond prices all over the world worsen on news of inflation, which is bad for home loan rates. So the big question is: Will home loan rates go back down? Although rates are still near historic lows, they have been headed up... and indications are that those unbelievably low home loan rates may be behind us. In fact, there are only a few things that would bring back the lows that we saw in early November: - If the tax cut package doesn't get passed, it would be very bad news for the economy and Stock market - but it would help interest rates.
- If the Fed’s recent round of Quantitative Easing falls on its face and doesn't meet its mission of creating inflation, boosting Stock prices, lowering unemployment and creating consumer demand - Bond prices could make some gains as the threat of deflation reemerges. But this is a long shot.
- If the financial problems in Europe worsen significantly - which would drive investors into the safe haven of the US Bond market - it could help Bond prices, but probably only modestly.
Realistically, the chances of these events happening are unlikely - and in the end, rates may see some brief and fleeting improvements, but many experts believe they will likely continue to creep up over time. And when you include the stimulative action of extending the present tax rates and adding further cuts, it’s tough to see Bonds or home loan rates improving much. The good news is that home loan rates are still extremely attractive and are still near historic lows for now. If you or someone you know has been thinking about purchasing or refinancing a home, NOW is the time to call or email to get started. |
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Get ready for a busy week of economic reports and news that could impact home loan rates! - We’ll start off Tuesday morning with the Retail Sales report for November, as well as the Fed’s final FOMC Meeting and Policy Statement of the year coming on Wednesday.
- We’ll also see new inflation reports starting on Tuesday with the Producer Price Index (PPI), which measures inflation at the wholesale level. The very next day, we’ll see the Consumer Price Index (CPI) with a look at inflation on the consumer level. With all of the recent talk over inflation concerns in the future, it will be important to see what these reports reveal - since inflation is the archenemy of Bonds and home loan rates.
- We’ll also get a dose of manufacturing news in the Empire State Index, which looks at New York State’s manufacturing sector, and is a good gauge of manufacturing overall. On Thursday, we’ll also see the Philadelphia Fed Index, which is another important manufacturing report. Those two indices have the potential to impact the market, since they indicate the health of the manufacturing sector in the US.
- Thursday brings the Initial and Continuing Jobless Claims Report. Last week, Initial Jobless Claims came in at 421,000, which was below expectations. That was encouraging news, but we still need to see consistent readings below 400,000 before real confidence in the labor market can take hold.
- Finally, we’ll see more housing news this week, when reports on Housing Starts and Building Permits in November are released on Thursday.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows the recent direction of Bonds - and, therefore, home loan rates. The important thing to note is the downward trend, which shows how Bond pricing and therefore home loan rates continued to worsen last week. Fortunately, there’s still time to lock in at near historic lows. It only takes a few minutes to see if this makes sense for you, or one of your friends, family members, neighbors, clients or coworkers. Call or email today, and I’ll be happy to help right away.
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Chart: Fannie Mae 4.0% Mortgage Bond (Friday, December 10, 2010)  |
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Surprise: More College Expenses! Here’s How to Avoid Them... College tuition costs are staggering these days - and so are some of the college-related expenses that you may not be expecting. Watch this video from Kiplinger.com on unexpected college expenses to come up with ways to avoid those indirect costs. Whether you’re planning to send a child to college soon or you know a student in college this year that has already experienced some of these unexpected costs, this video is invaluable!
// -------------------------- Economic Calendar for the Week of December 13-17, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of December 13 - December 17 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. December 14 | 08:30 | Producer Price Index (PPI) | Nov | 0.5% | | 0.4% | Moderate | | Tue. December 14 | 08:30 | Core Producer Price Index (PPI) | Nov | 0.2% | | -0.6% | Moderate | | Tue. December 14 | 08:30 | Retail Sales | Nov | 0.8% | | 1.2% | HIGH | | Tue. December 14 | 08:30 | Retail Sales ex-auto | Nov | 0.6% | | 0.4% | HIGH | | Tue. December 14 | 02:15 | FOMC Meeting | 12/14 | Unch | | 0.25% | HIGH | | Wed. December 15 | 09:15 | Capacity Utilization | Nov | 75.0% | | 74.8% | Moderate | | Wed. December 15 | 09:15 | Industrial Production | Nov | 0.3% | | 0.0% | Moderate | | Wed. December 15 | 08:30 | Empire State Index | Dec | 3.0 | | -11.14 | Moderate | | Wed. December 15 | 08:30 | Core Consumer Price Index (CPI) | Nov | 0.1% | | 0.0% | HIGH | | Wed. December 15 | 08:30 | Consumer Price Index (CPI) | Nov | 0.2% | | 0.2% | HIGH | | Thu. December 16 | 08:30 | Jobless Claims (Initial) | 12/11 | 425K | | 421K | Moderate | | Thu. December 16 | 08:30 | Housing Starts | Nov | 545K | | 519K | Moderate | | Thu. December 16 | 08:30 | Building Permits | Nov | 558K | | 550K | Moderate | | Thu. December 16 | 10:00 | Philadelphia Fed Index | Dec | 12.5 | | 22.5 | Moderate | | Thu. December 16 | 10:00 | Index of Leading Econ Ind (LEI) | Nov | 1.2% | | 0.5% | Low |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% -0- Points 15 Yr Fixed 4.250% -0- Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.500% -0- Points 5/1 Arm 4.125% -0- Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% .750% Point Credit (2 points for 1/8 in rate – always take credit) 5/1 ARM 3.250% .375% Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. | For the week of Dec 06, 2010 --- Vol. 8, Issue 49 |
Last Week in Review: The Jobs Report numbers for November are in. Find out what you need to know about the numbers behind the headline! Forecast for the Week: Volatility in the markets is sure to continue. Read the forecast below to see why. View: Want to "penalty-proof" your 2010 tax return? Read the View article below to act now. |
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"Don’t believe the hype." Unfortunately, the lyrics from Public Enemy’s hit song came true last week when the official Jobs Report for November was released.  Overall, Traders were caught by surprise last Friday when the Jobs Report came in way below estimates. The private sector numbers also disappointed. But let’s look at some important information behind the headline number. First, on a positive note, last week’s report included upward revisions to the past two months. Those revisions showed that the economy produced 38,000 more jobs than previously reported. What caused these revisions? The headline number of jobs lost or created comes from the Business Survey or CES (Current Employment Statistics) Survey, which surveys about 140,000 businesses and government agencies - and uses the birth/death ratio to help calculate or guesstimate the monthly number. Because there are often inaccuracies with that guesstimate, the real final numbers show up in future monthly revisions. Second, on a grim note, the Unemployment Rate ticked up to 9.8%, from the prior month's 9.6%. It’s important to note that the unemployment rate is derived from a survey from the Labor Department called the Household Survey or Current Population Survey (CPS) - and this survey is more accurate than the business survey as the information comes from actual phone calls to 50,000-60,000 households. So when all is said and done, last week’s Jobs Report begs the following questions going forward: - Was the recent string of economic reports more hype than actual signs that the economy was improving?
- Will future reports coincide with last Friday's weak Jobs Report?
- Or was the Jobs Report’s weak reading just a small bump on the road to recovery, with potential future upward revisions tempering November’s numbers like we saw happen with the last two months?
Time will tell, but one thing is for sure: The Fed was watching the Jobs Report closely and will likely use the weak report as evidence to pump the full dose of Quantitative Easing 2 (QE2) into the economy. Remember, Quantitative Easing is the concept of the Fed becoming a buyer of Treasuries and Bonds to try and stimulate the economy. While QE2 may be good for the economy, it is likely to be unfriendly to Bonds and home loan rates, as we saw last week when Bonds and home loan rates ended the week worse than where they began. |
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Compared to last week’s busy economic report calendar, this week is light on scheduled reports. But between QE2, Treasury auctions, and the uncertainty in Europe, the volatility in our markets is sure to continue... and that’s certainly no hype. Thursday brings the Initial and Continuing Jobless Claims Report. Last week, Initial Claims were reported above expectations at 436,000. However the 4-week moving average did decline to the lowest reading since August 2, 2008. While this was good news, it was tempered by the weaker-than-expected Jobs Report data last Friday. Remember, we need to see Initial Claims make a sustained movement below 400,000 for the market to feel confident that labor is recovering. Also, the Treasury will sell $32 Billion in 3-Year Notes on Tuesday, $21 Billion in 10-Years on Wednesday and $13 Billion in 30-Year Bonds on Thursday. It will be interesting to see how these auctions perform in light of the recent spike higher in yields. Ending the week will be the Consumer Sentiment Index on Friday. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates have worsened over the last month since the start of QE2. Despite this, an opportunity still exists, as home loan rates are still at historically low levels for now. Give me a call if you want to review your situation, or forward this email to a friend, family member or colleague who might benefit. I'm always happy to talk to your referrals and provide a complimentary consultation.
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Chart: Fannie Mae 4.0% Mortgage Bond (Friday, December 3, 2010)  |
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Penalty-Proof Your Tax Return Adjust your tax withholding now to boost your take-home pay or to avoid underpayment penalties when you file your 2010 tax return. By Mary Beth Franklin, Kiplinger.com When you file your tax return each year, the amount of tax withheld from your paycheck or submitted through estimated quarterly tax payments ideally should match the amount of tax you owe. In reality, that seldom happens. Most Americans are addicted to tax refunds, as evidenced by the fact that the average income-tax refund rose again this year to a record of nearly $2,900. In essence, more than 75% of U.S. taxpayers gave Uncle Sam an interest-free loan. Many of the remaining taxpayers ended up owing money, and some had to fork over an extra 10% penalty for having too little tax withheld throughout the year. Both situations are easy to remedy, but you have to act before the end of the year. Just file a revised Form W-4 with your employer. The more "allowances" you claim on the W-4, the less tax will be withheld; the fewer you claim, the more tax will be withheld. You can also ask your employer to withhold a flat amount from your paycheck. If you regularly get a refund, you’ve already banked most of it and will still get a refund next spring. But you can stop the leakage from your last few paychecks of the year by adjusting your W-4 now. Worksheets that come with the W-4 will help, or you can struggle through the IRS’s online withholding calculator. But we've got a better idea. If your current financial situation is similar to last year’s, just use our Tax Withholding Calculator. Answer three simple questions (you’ll find the answers on your 2009 tax return) and we'll estimate how many additional allowances you deserve -- and even show you how much your take-home pay will rise starting next payday, if you claim the allowances on a new W-4. (However, this shortcut won’t be much help if your tax situation has changed since last year because, for example, you have a new baby or got a new job). On the other hand, if you expect that you’ll owe money when you file your 2010 tax return next spring, you can avoid an underpayment penalty by boosting your withholding now. You needn’t pay every penny of the tax you expect to owe. As long as you prepay 90% of this year’s tax bill, you’re off the hook for the penalty. Or, you can escape its reach, in most cases, by prepaying 100% of your 2009 tax liability. (But if your 2009 adjusted gross income topped $150,000, you’ll have to prepay 110% of last year’s tax liability to avoid a penalty, even if your 2010 tax far exceeds your pay-ins.) If you have both wage and consulting income and expect to owe money on your tax return, boost the taxes withheld from your last few paychecks rather than trying to make up the shortfall with your final estimated quarterly payment due January 18, 2011 (because January 15 is a Saturday and the following Monday is a federal holiday). Taxes that are withheld are treated as if they were spread out evenly throughout the year, sidestepping an underpayment penalty; the estimated-tax-payment approach does not. Reprinted with permission. All Contents ©2010 The Kiplinger Washington Editors. www.kiplinger.com.
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Economic Calendar for the Week of December 6-10, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of December 06 - December 10 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Thu. December 09 | 08:30 | Jobless Claims (Initial) | 12/4 | 430K | | 436K | Moderate | | Fri. December 10 | 08:30 | Balance of Trade | Oct | -$44.0B | | -$44.0B | Moderate | | Fri. December 10 | 10:00 | Consumer Sentiment Index (UoM) | Dec | 72.2 | | 71.6 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.625% .625% Points 15 Yr Fixed 4.125% -0- Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.250% -0- Point 5/1 Arm 4.000% .125% Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.625% .125% Point Credit 5/1 ARM 2.875% -0- Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. | For the week of Nov 15, 2010 --- Vol. 8, Issue 46 |
Last Week in Review: Recent economic events are giving a strong indication of where rates are headed. Read on to find out where and why. Forecast for the Week: Here’s a quick rundown of reports we need to watch this week... and there are some big ones on the docket! View: Read below to find out how decluttering your home can help you financially! |
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"INFLATION IS WHEN YOU PAY $15 FOR THE $10 HAIRCUT YOU USED TO GET FOR $5 WHEN YOU HAD HAIR." - Sam Ewing. And regardless of how much hair you have these days... one thing we can watch to help a get sense of where rates are going is inflation. Right now, the headline numbers in the US show little inflation overall... but we are already seeing significant inflation in particular items like commodities, food, and oil - which are being driven by a weak US Dollar, and increasing demand from emerging countries like China and India. In addition, the global market reacted late last week to higher-than-expected inflation in China. This is important to us because Bonds and home loan rates hate inflation, no matter where the whiff of it comes from. Here’s why. Think of inflation as a hot air balloon and rates as the basket under that balloon. As the balloon (or inflation) rises, the basket (or rates) must rise as well.  So, if inflation moves higher in China, their government has to raise rates to fight inflation. And if rates move higher in China, global investors seeking the highest yield will move away from the relatively meager returns seen in US Bonds - and move their Bond buying money into juicier yields found abroad. There are so many opinions by so many smart people on both sides of the inflation argument, but right now it is all about what the Bond market thinks. And the recent market action shows just how quickly sentiment in the market can change. Remember, it was just a few weeks ago that fears and whispers of deflation helped the Bond market - and home loan rates - improve. But now with the Fed intent on avoiding deflation and in fact creating inflation through another round of Quantitative Easing (or QE2), the entire Bond market - including Mortgage Bonds - have began to react negatively. Remember, Quantitative Easing is the concept of the Fed becoming a buyer of Treasuries and Bonds, in a bid to stimulate the economy by: Creating inflation - Lowering the unemployment rate
- Raising Stock prices
While those goals may be good for the overall economy, we need to remember that all three are very unfriendly to Mortgage Bonds and home loan rates. The good news is, despite ending the week worse than where they started, home loan rates are still near historic lows for the time being. If you or someone you know is looking to take advantage of low rates, now is the time. Please call or email me today to get started. |
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After a relatively slow schedule of economic reports last week, we’ll see some big reports over the next few days with the potential to really move the markets. We’ll start off right away Monday morning with the Retail Sales report for October as well as a dose of manufacturing news in the Empire State Index, which looks at New York State’s manufacturing sector, and is a good gauge of manufacturing overall. On Thursday, we’ll also see the Philadelphia Fed Index, which is another important manufacturing report. Those two indices have the potential to impact the market, since they indicate the health of the manufacturing sector in the US. Even more big news is headed our way on Tuesday with the Producer Price Index (PPI), which measures inflation at the wholesale level. Then, the very next day on Wednesday morning, we’ll see the Consumer Price Index (CPI) with a look at inflation at the consumer level. In light of last week’s news and the information described above, it will be important to see what these reports reveal - since inflation is the archenemy of Bonds and home loan rates. Wednesday will also bring more housing industry news with reports on the number of Housing Starts and Building Permits in October. The week of reports caps off on Thursday with the Initial Jobless Claims report. Last week’s report indicated that Initial Jobless Claims fell in the latest week to the lowest reading since July. Continuing Jobless Claims also moved lower. While those numbers showed modest improvements and are steps in the right direction, there is still a lot of wood to chop where jobs are concerned. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. Some of the charts that monitor Bond activity can look complex - but they tell quite a story! In the chart below, pay attention to the downward trend for Bond prices (which means an upward trend for home loan rates) since November 3rd, which was when the Fed announced their QE2 plans. This chart shows us that Mortgage Bonds have traded sharply lower since the Fed Meeting and official QE2 announcement. Again, home loan rates are still at historically low levels for the time being, which means there’s still time to purchase or refinance a home and take advantage of the great rates. And it only takes a few minutes to get the process started – please feel free to get in touch with me, and pass on this newsletter to friends, family members, neighbors or coworkers that might benefit as well! Chart: Fannie Mae 3.5% Mortgage Bond (Friday, November 12, 2010)  |
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Financial Benefits of Decluttering It pays off to unload items you no longer need (or never really needed at all) By Cameron Huddleston, Kiplinger.com I have been in a decluttering mode lately. It was sparked by moving my mom from her three-bedroom home to a one-bedroom apartment in my house -- and having to pare down her belongings. Spending weeks going through all her stuff to figure out what she did and didn't need (then selling and donating the unnecessary items) made me want to remove all the clutter from my life, too. A few articles I recently read fueled this desire even more. My husband and I usually go through our closet once a year to clear out clothes we no longer wear. But an article in the New York Times about people who decided to wear only six items for a month made me aware that there still is a lot in my closet that I don't need. We occasionally go through other closets, cabinets and drawers to rid them of items that don't get used and just take up space. After reading G.E. Miller's 3 Guerilla Tactics to Get Rid of Clutter on 20somethingfinance, I realized my haphazard keep-or-toss tactics weren't cutting it. What resonated with me most, though, was a reader comment on the Opinionator blog post How to Lose a Legacy. The reader wrote about cleaning out his (or her) parents' home after his mother died and father moved out: "I wonder why we (me) hang on to stuff that really just takes up physical and emotional "room" in our lives; I s'pose it's because the "stuff" (as George Carlin so aptly and comically put it) signifies a longing to hang on to, or dare I say, cling, to memories using physical things... even if we actually wish we could just throw a lot of it in the trash." It feels good to get rid of the clutter. This is a personal finance column, so I won't advocate just throwing your stuff in the trash because you'd miss out on the financial benefits of decluttering. Here's what getting rid of things you don't need can do for your finances. 1. Lower your tax bill. If you itemize on your tax return, take all that stuff to Goodwill or any other charitable organization and claim a deduction for your contribution. Goodwill has a list of price ranges for items sold in its stores that can help you figure out the market value of items you donate. If your noncash contributions total more than $500, you must complete Form 8283 and attach it to your tax return. Single items valued at $5,000 or more, regardless of condition, require a written appraisal. 2. Put money in your pocket. You've heard it before: One man's trash is another man's treasure. Have a yard sale (see these tips) or sell your wares on eBay, Craigslist and other sites (watch this video). 3. Eliminate financial mess. While you're decluttering, take the time to get rid of documents you no longer need and go digital with the rest. See Paper Records: What to Toss, What to Keep and Create a Digital Archive of Tax Records for help. This exercise can help you get your remaining documents organized, save you time as you prepare your next tax return and perhaps prompt you to find ways to streamline more of your financial responsibilities (by setting up automatic bill pay, for example, and eliminating all those monthly paper bills). Reprinted with permission. All Contents ©2010 The Kiplinger Washington Editors. www.kiplinger.com.
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Economic Calendar for the Week of November 15-19, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of November 15 - November 19 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. November 15 | 08:30 | Retail Sales | Oct | 0.7% | | 0.6% | HIGH | | Mon. November 15 | 08:30 | Retail Sales ex-auto | Oct | 0.4% | | 0.4% | HIGH | | Mon. November 15 | 08:30 | Empire State Index | Nov | 11.3 | | 15.73 | Moderate | | Tue. November 16 | 08:30 | Producer Price Index (PPI) | Oct | 0.8% | | 0.4% | Moderate | | Tue. November 16 | 08:30 | Core Producer Price Index (PPI) | Oct | 0.1% | | 0.1% | Moderate | | Tue. November 16 | 09:15 | Industrial Production | Oct | 0.3% | | -0.2% | Moderate | | Tue. November 16 | 09:15 | Capacity Utilization | Oct | 74.8 | | 74.7 | Moderate | | Wed. November 17 | 08:30 | Building Permits | Oct | 565K | | 539K | Moderate | | Wed. November 17 | 08:30 | Housing Starts | Oct | 600K | | 610K | Moderate | | Wed. November 17 | 08:30 | Consumer Price Index (CPI) | Oct | 0.3% | | 0.1% | HIGH | | Wed. November 17 | 08:30 | Core Consumer Price Index (CPI) | Oct | 0.1% | | 0.0% | HIGH | | Thu. November 18 | 08:30 | Jobless Claims (Initial) | 11/13 | 442K | | 435K | Moderate | | Thu. November 18 | 10:00 | Index of Leading Econ Ind (LEI) | Oct | 0.5% | | 0.3% | Moderate | | Thu. November 18 | 10:00 | Philadelphia Fed Index | Nov | 4.5 | | 1.0 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.375% -.375- Point 15 Yr Fixed 3.750% -.125- Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.125% -0- Point 5/1 Arm 4.000% -0- Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.250% -0- Point 5/1 ARM 2.750% -.125- Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. | For the week of Nov 08, 2010 --- Vol. 8, Issue 45 |
Last Week in Review: Election results, the Fed’s announcement, and the Jobs Report - what a full week it was! So what was the impact on home loan rates? Forecast for the Week: It’s a quiet week on the economic report front, but don’t expect the volatility to die down as the markets continue to digest last week’s news. View: Leasing a car may be easy, but getting out of a car lease is another story. Luckily, this week’s View article has some ideas that can help. |
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 "TOMORROW IS OFTEN THE BUSIEST DAY OF THE WEEK." Spanish Proverb. And it sure seemed that way every day of last week, with one of the busiest economic calendars seen in years. Friday’s Jobs Report capped off a week filled with election results and a big announcement from the Fed regarding the next round of Quantitative Easing (QE2). So what impact did all of this news have on Bonds and home loan rates? Let’s break it down. On Friday, the Labor Department reported that 151,000 jobs were created in October, all in the private sector. This was much higher than the 60,000 job creations that were expected - and while the economy needs a lot more job creations to put a dent in the unemployment rate, this is a great start to a recovery in the labor market. Adding to the positive tone of the report, there were upward revisions to both August and September's numbers, and the Unemployment Rate held steady at 9.6%. The Average Hourly Wage increased as well - and across the board, the numbers were stronger than anticipated. Should this trend continue in the coming months, it would support the notion that labor has not only stabilized - but is perhaps even expanding, which would be welcome news indeed. And while this is great news for the economy, remember that when good economic news arrives, investors move money into Stocks... and this pulls money out of all types of Bonds, including Mortgage Backed Securities, which home loan rates are based on. When money moves out of Bonds, it causes Bond pricing and home loan rates to worsen - and that’s exactly what happened, following the better than expected Jobs Report. Although we all like to hear good news for the economy - any strong, positive economic news is bad news for Bond pricing and home loan rates. Home loan rates were exceptionally volatile all last week - and likely to remain so ahead. While rates are still at very low, affordable levels - they won’t last forever, so please get in touch if you have questions about how the current rate climate might benefit your situation. In other big news last week, the Federal Reserve Board made their much anticipated announcement regarding another round of "Quantitative Easing" or QE2, where the Fed will participate in purchasing Treasury Securities in a bid to keep the economic recovery on track. On Wednesday, the Fed announced that they intend to purchase $600 Billion in Treasuries, starting now and continuing through mid-2011, which equates to about $75 Billion in purchases per month. So how will this impact home loan rates ahead? We need to be mindful that the Fed initiated QE2 for three reasons. One, to help lower interest rates in order to spur consumer and business spending... which in turn will create inflation. Two, to help lower the unemployment rate via an economic boost. And three, to help push Stock prices higher. And all three of these factors will cause headwinds for Bonds and home loan rates down the road. As the Fed gets to work on putting their latest plan into effect - we can be sure that inflation readings in various economic reports will likely be more highly scrutinized by the markets. Upcoming reports will reveal whether the Fed will be successful in their quest to fight deflation, and create a level of Goldilocks inflation that is not too hot, not too cool... but juuuust right. Ultimately, if inflation expectations creep higher, interest rates for long-term Bonds - like Mortgage Bonds - will rise as well. One thing is certain, the volatility we saw in the markets last week is sure to continue. If you have any questions about how you can take advantage of today’s historic low rates, please contact me, and let’s evaluate your current situation. And feel free to forward this email to any friends, family members, or colleagues who may have questions as well - I’m always pleased to talk with anyone you’d refer my way. THINK YOU’RE STUCK IN YOUR VEHICLE LEASE? THINK AGAIN. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR SOME TIPS THAT COULD MAKE GETTING OUT OF IT EASIER THAN YOU THINK. |
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After all last week’s big news, Traders will continue to digest all the happenings... and will have a somewhat quiet economic news week ahead, including the Bond Market being closed on Thursday in honor of Veteran's Day There are no major economic reports until Wednesday, which will bring another look at employment with the Initial and Continuing Jobless Claims Report. Last week’s Initial Jobless Claims were 457,000, above the 445,000 that was expected, while Continuing Jobless Claims fell 42,000 to 4.34 Million. Initial Jobless Claims have been stuck to that mid-400’s level like a magnet for a very long time - and a real, sustained movement below 400,000 is needed in order for the market to feel confident that labor is recovering. Also this week we’ll get a read on Consumer Sentiment on Friday - always an important number, but particularly of note for retailers, especially as we head into the holiday shopping season. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates had some ups and downs last week in response to the QE2 announcement and the Jobs Report. I’ll be keeping a close eye on the volatility as this week progresses.
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Chart: Fannie Mae 3.5% Mortgage Bond (Friday, November 5, 2010)  |
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Getting Out of a Car Lease Car leases can pose many advantages for consumers. Typically speaking, lease payments are less than payments on a car loan, thus allowing a consumer to lease a vehicle that he or she couldn't afford to actually buy. Many people also like the idea of avoiding major repairs by handing back their car after a predetermined amount of years. However, being tied into a lease can be a negative burden at times - especially in today’s uncertain economic climate. Let's say that after signing on the dotted line to lease a car, your financial situation changes for the worse and you can no longer afford it. Just turning the car into the dealership and walking away from the lease could impact your credit dramatically, even to the point of a "repossession" showing up on your credit report. But what option do you have? It may surprise you to find out that you actually have a few options. One option is something known as an "early termination" of the lease. The problem with early termination, however, is that it can be costly, very costly. Aside from paying off the amount owed on the lease, there can also be penalty fees and other miscellaneous charges padded into the contract. Another option is to sell your leased car privately. The problems with this option are that it requires a lot of hard work on your part and it only benefits consumers with cars that have an equal or greater value than their current "buy out" price. But there is another option for getting out of your car lease, and it can prove to be the best one for many people. It is something known as a "lease transfer" and the process is just as it sounds. A leaseholder finds someone who is not only credit-worthy, but also willing to assume his or her car lease. Once the terms are negotiated and ratified the remainder of the lease is transferred into the new leaseholder's name. If a lease transfer sounds like a complicated process, it's because it can be. The good news, however, is that thanks to websites like www.leasetrader.com and www.swapalease.com the lease transfer process has been fully explained and streamlined. These companies basically act as middlemen between the buyer and the seller, providing a forum for listings, as well as hands-on help with expediting the process. It is important to know that the aforementioned websites - as well as most car leasing companies - will charge a fee for a car lease transfer. But... those fees can be negotiated between the buyer and the seller, and they are also much less costly than the fees associated with terminating your lease early.
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Economic Calendar for the Week of November 8-12, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of November 08 - November 12 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Wed. November 10 | 08:30 | Jobless Claims (Initial) | 11/06 | 450K | | 457K | Moderate | | Wed. November 10 | 08:30 | Balance of Trade | Sept | -$46.2B | | -$46.3B | Moderate | | Fri. November 12 | 10:00 | Consumer Sentiment Index (UoM) | Nov | 69.0 | | 67.7 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.125% 1/2 Point 15 Yr Fixed 3.500% 1/8 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.125% 0 Point 5/1 Arm 4.000% 1/8 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.250% 1.375 Point credit 5/1 ARM 2.750% 1.25 Point credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. | For the week of Oct 18, 2010 --- Vol. 8, Issue 42 |
Last Week in Review: Quantitative Easing is heading our way, but when, why, what will it mean? Many questions remain... Forecast for the Week: What kind of outlook will the economic reports of the week create? View: 5 Facebook posts that put you at risk! Do you know what they are? |
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"EVERYTHING’S COMING OUR WAY..." Those words from Carlos Santana’s song come to mind following last week’s release of the Fed’s September Meeting Minutes, as well as a speech from Fed Chairman Ben Bernanke. The message was pretty clear - another round of Quantitative Easing (QE2) is coming our way! Remember that QE is the concept of the Fed becoming a buyer of Treasuries and Bonds, in a bid to keep interest rates low and therefore stimulate the economy. And while all the talk had Bonds behaving in a volatile fashion - ultimately causing home loan rates to worsen for the week overall - what was said specifically... and what does it mean? First, let’s take a look at a few notes from the Fed Meeting Minutes: "Although participants considered it unlikely that the economy would re-enter a recession, many expressed concern that output growth, and the associated progress in reducing the level of unemployment, could be slow for some time." Stating that "many" Fed members expressed concern likely means that more voting Fed members are onboard with the concept of more QE. Then there was this comment, which didn’t require much reading between the lines: "Many participants noted that if economic growth remained too slow to make satisfactory progress toward reducing the unemployment rate, or if inflation continued to come in below levels consistent with the FOMC's dual mandate, it would be appropriate to provide additional monetary policy accommodation." This is clearly telling the markets that the Fed will be stepping in with the money printing presses if the economy doesn't pick up. And with just a few weeks remaining before the next Fed Meeting, and recent economic reports being weak at best... rest assured, more QE is coming. And this was underscored as Fed Chairman Ben Bernanke delivered a highly anticipated speech on Friday, also making a strong case in support of more Quantitative Easing. He stated "there would appear - all else being equal - to be a case for further action" and additionally, that the "FOMC is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate." OK - so it seems clear - more QE is coming. But is this a good thing? In Bernanke’s comments on Friday, he noted that the Fed has much less experience in judging the economic effects of more QE versus their more traditional monetary policy actions - and said that this "makes it challenging to determine the appropriate quantity and pace of purchases and to communicate this policy response to the public." True - this amount of money-printing is unprecedented... and begs the question of if more QE really makes sense. The idea is to strengthen the economy by helping make interest rates lower... but the questions remain - will it work, and what consequences may result?
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QE2 is Coming, But Questions of Its Effectiveness Still Remain  Interestingly enough - one result that is likely is that the US Dollar would weaken... and is already weakening following all the talk of QE. And remember, a weaker Dollar helps make our exports more attractive to foreign buyers, due to the weakened US currency making our products less expensive to purchase by foreigners. And while the government will never say it - as the US has been accusing China of very similar tactics - this Dollar devaluation may be exactly what the government has in mind. Think about it... the "cover story" is all on how QE will help interest rates improve - but realistically, are slightly lower rates even what is truly needed to boost consumer demand and create jobs? Rates are pretty low as they stand right now...so why do more QE? Hmm... might just be to devalue the Dollar, and boost our economy through making our exports relatively cheaper for foreign buyers. And this is not a bad thing - but we have to be aware that while QE2 might provide an initial decline for interest rates - the devaluation of the Dollar will ultimately drive rates higher. This story is far from over - so stay tuned as it continues to unfold in the coming weeks, I will be keeping you informed. THE IMPACT OF QE2 ISN’T THE ONLY THING ON THE MINDS OF CONSUMERS THESE DAYS. A NUMBER OF PEOPLE ARE QUESTIONING THE RISKS OF SHARING INFORMATION ON SOCIAL NETWORKING SITES LIKE FACEBOOK – AND FOR GOOD REASON. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW FOR INFORMATION ABOUT 5 POSTS THAT COULD PUT YOU AT RISK! |
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This week’s economic calendar brings us new insight into the health of the manufacturing and housing sectors of the economy. We’ll start off with reports on Capacity Utilization and Industrial Production on Monday. The capacity utilization rate provides an estimate of how much factory capacity is in use. If the utilization rate climbs too high it can lead to inflationary bottlenecks in production. The Federal Reserve watches this report closely and decides how to set interest rates on the basis of whether production constraints are threatening to cause inflation. Tuesday brings us more housing news with the latest reports on Housing Starts and Building Permits for September. That news will be followed by the release of the Fed’s Beige Book on Wednesday. The Beige Book - which is officially known as the Survey on Current Economic Conditions - contains anecdotal information on the current economic and business conditions. Thursday we’ll see another round of Initial Jobless Claims. In last week’s report, Initial Jobless Claims rose to 462,000, which was above the 450,000 that was expected. That was a disappointment, as it seems that the economy is unable to string together a couple of solid weeks with Jobless Claims below 450,000. Finally, the week wraps up on Friday with the Philadelphia Fed Index, which is one of the most important regional manufacturing indices. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see from the chart below, Mortgage Bonds experienced volatility last week, due in large part to the ongoing comments about Quantitative Easing.
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Chart: Fannie Mae 3.5% Mortgage Bond (Friday, October 15, 2010)  |
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5 Facebook Posts That Put You at Risk Be sure you're not sharing too much information with friends, family and others online. By Cameron Huddleston, Kiplinger.com There was a big outcry recently when it was revealed that personal data of Facebook users had been posted to a database open to everyone. (See Congress to Crack Down on Facebook.) Facebook users, naturally, were concerned about their privacy. Yet, every day Facebook and other social network users publish personal information that could put them at risk without thinking twice. "An awful lot of people think when they get online and communicate with their friends that they are invincible," says Adam Levin, chairman of Identity Theft 911. A seemingly benign post or piece of information could make you a target of identity thieves and traditional crooks. To protect yourself, here are five things you should avoid posting online. 1. Date of birth. Almost 60% of social networkers post their date of birth, according to a survey by Identity Theft 911. After all, most of us like to be wished a happy birthday. But resist the urge to post your complete birth date -- including the year -- on your Facebook profile just to get a lot of messages on your big day. This is valuable information for identity thieves. I know you're thinking only your friends see what you post. But if someone does a search for your name, that person will see your birth date if it's listed in your profile. 2. Child's date of birth. When you post "Happy Birthday to my sweet Susie, who turns 5 today," you're giving identity thieves valuable information about your child. When it comes to your kids, resist the urge to post any information about them (see Protect Your Kids From ID Theft). 3. Travel plans. Surely you've seen Facebook posts like this: "We're going to the beach next week. Can't wait." In fact, you may be guilty of it yourself -- 18% of social network users post travel times, according to the Identity Theft 911 survey. Guess what? You've just extended an invitation for people to burglarize your home. Three men in New Hampshire burglarized more than 18 homes by checking Facebook status updates to see when people wouldn't be home (see Burglars Said to Have Picked Houses Based on Facebook Updates). 4. Address. If your address is on your profile AND you let people know when you're going out of town, well, you know where I'm going with this. Nonetheless, 21% of social network users post their address, according to the Identity Theft 911 Survey. 5. Mother's maiden name. It may seem like common sense not to post your mother's maiden name on a social networking site, but about 11% of the people who responded to the Identity Theft 911 survey said they did. Identity thieves will hit the jackpot if you reveal this bit of information online. Not only should you avoid posting any of this information, but also you should fix your Facebook settings to control who sees what on your page. Use different passwords for social media sites than you use for financial sites, such as your bank or credit card site. Be careful about clicking on links on Facebook or similar sites because they could contain viruses that will secretly track your passwords, account numbers and other things. Reprinted with permission. All Contents ©2010 The Kiplinger Washington Editors. www.kiplinger.com.
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Economic Calendar for the Week of October 18-22, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of October 18 - October 22 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. October 18 | 09:15 | Industrial Production | Sept | 0.3% | | 0.2% | Moderate | | Mon. October 18 | 09:15 | Capacity Utilization | Sept | 75.0 | | 74.7 | Moderate | | Tue. October 19 | 08:30 | Housing Starts | Sept | 585K | | 598K | Moderate | | Tue. October 19 | 08:30 | Building Permits | Sept | 565K | | 569K | Moderate | | Wed. October 20 | 02:00 | Beige Book | Oct | | | | Moderate | | Thu. October 21 | 08:30 | Jobless Claims (Initial) | 10/16 | 455K | | 462K | Moderate | | Thu. October 21 | 10:00 | Index of Leading Econ Ind (LEI) | Sept | 0.3% | | 0.3% | Low | | Thu. October 21 | 10:00 | Philadelphia Fed Index | Oct | 0.2 | | -0.7 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.250% 0 Point 15 Yr Fixed 3.625% 1/8 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.125% 0 Point 5/1 Arm 4.000% 0 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.250% 1/2 Point Credit 5/1 ARM 2.750% 1 Point Credit As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
| For the week of Oct 11, 2010 --- Vol. 8, Issue 41 |
Last Week in Review: The highly anticipated Jobs Report for September is in. What was the news... and what does it mean for home loan rates? Forecast for the Week: With the Meeting Minutes from the Fed’s last get together coming - as well as Retail Sales numbers, two inflation reports, and more Third Quarter earnings season ahead, a busy news week is in store! View: Texting while driving has become a hot issue... but it doesn’t have to worry you anymore. Find out why below. |
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"EVERYBODY’S WORKING FOR THE WEEKEND...." (Loverboy, 1981) Or... are they? Unfortunately, many folks out there these days sure wish they were working at all... and the Labor Department reported last Friday that the US lost 95,000 jobs in September. What else did the Jobs Report say and what could the news mean for home loan rates? Read on for details. A closer look at the Jobs Report for September shows that 159,000 of the jobs lost were government workers, many of which are the unwinding of the temporary census hires. The more important private sector added 64,000 jobs - but still not great, and also below the 74,000 expected. But this number confirms the thought that the economy, or the Job market, is stabilizing and perhaps even improving, albeit it at a very gradual pace. More on why this is so important in a minute.  The Jobs Report also showed that the Unemployment Rate remained at 9.6%, just below the 9.7% anticipated. However, it’s likely the actual rate of unemployment is higher. Why? Because if an unemployed individual does not seek employment for four weeks, they are removed from the count of the "officially unemployed." And with unemployment benefits available for about 2 years, it increases an unemployed individual's chances of becoming less motivated to look for a job, until the benefits are close to running out. This can skew the headline Unemployment Rate, and is evidenced by the sharp rise in the overall unemployment rate or "U6" measurement of unemployment, which stands at 17.1%. The U6 rate accounts for these discouraged workers who have not sought employment for the past four weeks, as well as those who have accepted part-time employment but would prefer to be working full-time. Now, back to the question of why signs of good - or bad - economic news are particularly important of late. The Fed will be watching the various economic reports very closely over the next few weeks in advance of their next regularly scheduled meeting on November 2-3, as they are considering a second round of Quantitative Easing (QE2) to ensure that our slowing economy does not slow even further. If the economic reports that are ahead are more negative than positive, this will increase the likelihood of more QE... but it’s not a foregone conclusion at this point in the least. So what does all this have to do with home loan rates? If the economic news continues to be soft and the Fed does go through with another round of QE, Bond prices and home loan rates may initially improve for two reasons. First, if the economic data is weak leading up to an announcement - that soft economic news tends to be bad for Stocks, but good for Bonds and therefore home loan rates. Additionally, Bonds would improve simply because the announcement of QE would include large Bond purchases. But keep in mind that the key word is "initially." Even though Bonds and home loan rates could initially improve, the eventual softening of the Dollar, rising commodity prices, and rise in Stock prices would become a drag on Bonds, which would negatively impact home loan rates. We’ll see what happens in the coming weeks leading up to the Fed’s next meeting on November 2-3. But last week, meanwhile, the news had a positive impact on Bonds and home loan rates, as they ended the week about .125 to .25 percent better than where they began. If you or anyone you know would like to learn more about taking advantage of historically low home loan rates, please don’t hesitate to call or email me as soon as possible. Or forward this newsletter on to anyone you think may benefit and I’d be happy to talk to them free of charge. FINDING IT HARD NOT TO TEXT AND DRIVE? YOU CAN DO IT SAFELY…THANKS TO THIS GREAT NEW APP. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR DETAILS. |
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It may be a short week in the Bond Market, with the market closed Monday for the Columbus Day holiday (the Stock Market will be opened), but there will still be plenty of news to work through. On Tuesday, we’ll get a look at the Minutes from the Fed’s September 21st Meeting, and these may give us even more information about which way the Fed is leaning in the QE department. A double dose of inflation news ends the week, with the Producer Price Index on Thursday (which measures inflation at the wholesale level) and the Consumer Price Index on Friday. Remember, inflation is the archenemy of Bonds and home loan rates, so any hint that inflation is increasing could cause home loan rates to worsen. Two other reports to note include Thursday’s Initial and Continuing Jobless Claims (last week’s report, while not great, was slightly better than expected) and Friday’s Retail Sales Report. In addition, third quarter earnings season kicks into full gear this week. Some reports to look for include JP Morgan Chase and General Electric, reporting respectively Wednesday and Friday before the markets open. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates hit record levels as the talk of QE2 continued. I’ll be listening closely for the latest developments on that front this week.
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Chart: Fannie Mae 3.5% Mortgage Bond (Friday, October 8, 2010)  |
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Safer Driving... There’s an App for That! A recent study by the National Highway Traffic Safety Administration found that distracted driving was the leading cause in 448,000 accidents and 5,474 highway deaths in 2009. That represents a 16% increase from 2008. That increase is one reason why U.S. Transportation Secretary Ray Lahood has proposed mandatory warnings in automobiles about distracted driving. Lahood, like many parents today, is concerned about the growing increase of technology use in automobiles - including distractions that are being added to new cars that allow "drivers to update Facebook, surf the Web or do any number of other things instead of driving safely," Lahood said. Even without such built-in technology, drivers today are often distracted by incoming text messages on their cell phones. The good news is that technology can also help solve this problem. New services - like DriveSafe.ly - have sprung up that eliminate the need to read text messages AND eliminate the need to respond. Here’s how it works... You download an application to your phone. Then, when you get in your car to drive, you simply turn the application on. When you receive a text message, the application actually reads it to you... automatically... and out loud. So there’s no need to take your eyes off the road. Better still... the application automatically sends a reply message stating that you are driving and will respond as soon as you reach a destination that allows you to safely reply. The application can be used on a variety of phones and there are even different plans - including a free version of DriveSafe.ly as well as family and business plans. If you receive a lot of text messages while driving or if you have a teenager of driving age, this could be one of the most important safety steps you do this year. Take a few minutes to check it out. After all, this simple application could save your life or the life of someone you know.
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Economic Calendar for the Week of October 11-15, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of October 11 - October 15 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. October 12 | 02:00 | FOMC Minutes | 9/21 | | | | HIGH | | Thu. October 14 | 08:30 | Jobless Claims (Initial) | 10/9 | 449K | | 445K | Moderate | | Thu. October 14 | 08:30 | Producer Price Index (PPI) | Sept | 0.2% | | 0.4% | Moderate | | Thu. October 14 | 08:30 | Core Producer Price Index (PPI) | Sept | 0.1% | | 0.1% | Moderate | | Thu. October 14 | 08:30 | Balance of Trade | Aug | -$44.5B | | -$42.8B | Moderate | | Fri. October 15 | 08:30 | Empire State Index | Oct | 6.0 | | 4.10 | Moderate | | Fri. October 15 | 08:30 | Retail Sales ex-auto | Sept | 0.4% | | 0.6% | HIGH | | Fri. October 15 | 08:30 | Retail Sales | Sept | 0.4% | | 0.4% | HIGH | | Fri. October 15 | 08:30 | Core Consumer Price Index (CPI) | Sept | 0.1% | | 0.1% | HIGH | | Fri. October 15 | 08:30 | Consumer Price Index (CPI) | Sept | 0.2% | | 0.3% | HIGH | | Fri. October 15 | 10:00 | Consumer Sentiment Index (UoM) | Oct | 68.6 | | 68.2 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.250% 1/8 Point Credit 15 Yr Fixed 3.625% 1/8 Point Credit Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.125% 0 Point 5/1 Arm 4.125% 1/8 Point Credit FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.250% 5/8 Point Credit 5/1 ARM 2.625% 1/2 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
| For the week of Oct 04, 2010 --- Vol. 8, Issue 40 |
Last Week in Review: The Fed faces a tough decision, but what could it mean for Bonds and home loan rates? Forecast for the Week: This is a huge week, despite the limited number of reports due out... find out why. View: Before you plan your next trip or a winter vacation, consider this surprising tip! |
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"I CAN NO LONGER STAND HERE WAITING FOR YOU TO DECIDE..." Those lyrics from the band Chicago’s 1980’s hit sum up the sentiments of many market analysts and traders after last week’s back and forth statements from Fed officials about the possibility of another round of Quantitative Easing... otherwise known as "QE2". As we stated last week, many analysts have been feeling that QE2 was very likely, if we continue to see weak economic reports. But comments made by a number of Fed officials throughout the week indicated that QE2 may still be up in the air. For example, Atlanta Federal Reserve President Dennis Lockhart stated, "there is growing sentiment that further accommodation through large asset purchases is coming... but at this point in time, it's not a foregone conclusion that we need to go there." Those comments were followed by other similar comments from other Fed officials, including Philadelphia Fed President Charles Plosser, who doesn't support any further Bond buying. Additionally, Boston Fed President Eric Rosengren said that monetary stimulus will depend on economic data, while Minnesota Fed President Narayana Kocherlakota says new asset buying would have a more muted impact than prior purchases. This would indicate that at least a few Fed members are hesitant ab out a big QE2 package. On the flip side, however, New York Fed President William Dudley said on Friday that the Fed is almost certain to lend support through Quantitative Easing in order to ensure that a slowing economy does not fall further. He gave an example of how a $500 Billion purchase plan might impact interest rates, stating that it would have a similar impact to a Fed rate cut of .50 to .75%... and although this was just an example, the fact that he mentioned a specific number was not lost on Traders. Mr. Dudley went on to say that he feels a double dip recession is not an issue, but rather the focus is on how the economy can grow faster than its current pace. Those comments are important because the markets figured that QE2 would be a lock, unless the Fed sees stronger-than-expected economic data before its November 3rd meeting... specifically, employment data. But last week the analysts and investors were faced with uncertainty around the issue and were left sifting through comments to try to predict what the Fed will do. And that uncertainty caused traders to shift money back out of Bonds at different times last week.
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The Fed and Chairman Bernanke Face a Tough Decision with QE2  But what would another round of Quantitative Easing mean to Bonds and home loan rates? Let’s break it down into four important aspects: (1) When would it happen? (2) How much money would it involve? (3) Why is this being contemplated? (4) And what does it mean to home loan rates? First, as stated above, whether QE2 happens will be dependent upon the upcoming data releases. Many experts agree that if the Fed does make a move, it will most likely happen at the next Fed meeting, which is scheduled for November 3rd. Second, the question of "how much" is still up in the air. As stated above, New York Fed President William Dudley gave an example of a $500 Billion purchase - but estimates are all over the board at this point, from $200 Billion to $2 Trillion. Yet the big question is whether QE2 will even do any good. Recently, former Fed Governor Larry Meyer felt that even $2 Trillion would hardly move the needle on GDP growth or reduce unemployment rates. In fact, he likens it to pushing on a string. Mr. Meyer's sentiments were also echoed last week by former Fed official Joe Gagnon, who estimated that the Fed is indeed likely to do at least $1 Trillion in additional QE, but that it would have little impact. That brings us to the third question: Why even contemplate QE2? Think about this: a large round of QE2 would almost assuredly hurt the US Dollar. And by hurting the US Dollar, our exports become more affordable abroad, as well as making imports appear relatively more expensive. This helps large multi-national companies, which have a large influence on the economy, as well as the major Stock market indices. This could be the goal of the Fed. Ahh...but you can't outright say you are trying to weaken your currency. After all - haven't many members of Congress and the Administration been bashing China for currency manipulation? The US may be trying to do exactly what it has both denigrated and admonished other nations of doing. In other words, even if QE2 didn’t have a direct impact on the economy, the drop in currency value - which, if you've been paying attention to the Dollar-Euro relationship, has already been happening - would be very beneficial. But at what cost? While Stocks should benefit, Bonds may have a different reaction. And that brings us to the heart of what you need to know: What would QE2 mean to Bonds and home loan rates? If the Fed does go through with another round of Quantitative Easing, Bond prices should - initially - improve for two reasons. First, Bonds would likely improve due to the soft economic data causing QE2. Second, Bonds would improve simply because the announcement of QE2 would include large Bond purchases. The key word is "initially." That’s because, even though Bonds would initially improve, the eventual softening of the Dollar, rising commodity prices, and rise in Stock prices could become a drag on Bonds, which would negatively impact home loan rates. AS YOU CAN SEE FROM THIS DISCUSSION, THINGS AREN’T ALWAYS WHAT THEY SEEM. THE SAME IS TRUE FOR MANY FINANCIAL MATTERS. TAKE, FOR EXAMPLE, THE COST OF CHECKING YOUR LUGGAGE WHEN YOU FLY. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW FOR SOME SURPRISING INFORMATION ON HOW YOU CAN SEND YOUR LUGGAGE FOR LESS! |
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This week’s economic calendar may be light in terms of the number of reports, but don’t let that fool you for one second. The reports that are due out may have a huge impact not only on the economy this week, but also on decisions that will shape the economy for months to come. We’ll start off with an update on the health of the housing industry, with the Pending Home Sales report on Monday morning. After that, things start to heat up with the ADP National Employment Index on Wednesday and Initial Jobless Claims on Thursday. But the big enchilada comes on Friday, when the all-important Jobs Report will be released. This report includes official labor statistics on non-farm payrolls and the unemployment rate, as well as average hourly earnings and changes in the average work week. These reports on employment are always important, but they take on even more significance in the current climate. That’s because the question of whether the Fed will move forward with another round of Quantitative Easing as we’ve been discussing, depends heavily on the employment data that is released before the Fed’s upcoming meeting on November 3rd. And since the release of the November Jobs Report on October data is due out November 5th - two days after the Fed meeting - this coming Friday’s report is the last chance for the Fed members to see the official labor statistics before they meet to discuss QE2 and other financial policies. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see from the chart below, Mortgage Bonds experienced some volatility throughout last week. Overall, Bonds and home loan rates ended the week worse than where they began, despite the volatility. With home loan rates still at historically good levels, homebuyers - and homeowners looking to refinance - still have a tremendous opportunity. But it won’t last forever... which means now is a good time to act.
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Chart: Fannie Mae 3.5% Mortgage Bond (Friday, October 1, 2010)  |
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Save Money by Shipping Your Luggage You may spend less by using a shipping company - rather than the airlines - to get your bags to your destination. By Cameron Huddleston, Kiplinger.com You may be able to save money by shipping your luggage rather than checking it in the next time you fly. The idea might sound absurd. But if you do the math - as Airfarewatchdog.com has done for you in this chart - you’ll see that it would cost you less in some cases to send your bags to your destination by FedEx, UPS or U.S. Postal Service ground shipping. Passengers who have luggage that exceeds airlines’ size and weight limits will score the biggest savings. They’ll spend about $50 less by shipping one overweight suitcase than checking it in - and up to $200 by shipping two overweight bags. Even if the cost is the same for shipping and checking bags, you get so much more from FedEx and UPS, says Airfarewatchdog.com founder George Hobica, who ships his luggage. They have better delivery records than the airlines, they provide tracking numbers so you can follow your shipment online and they let you insure items that the airlines don’t, he says. Plus, you’re more likely to get a refund from a shipping company than an airline if your luggage is damaged or lost. Another benefit: You won’t have to wait in long lines at the airport to check your bags. And if you have small children, you’ll be a lot less stressed if you don’t have to lug your kids and luggage from the parking lot to the terminal. The key is to ship your luggage a few days BEFORE your flight so that it arrives at your destination when you do. If you’re visiting a relative, the shipping logistics are easy. But if you’re going to be staying in a hotel or condo, you should consider having the shipping company hold your items so you can pick them up. Otherwise, you might have to pay a fee to have the hotel or rental office hold your luggage until you arrive. Reprinted with permission. All Contents ©2010 The Kiplinger Washington Editors. www.kiplinger.com.
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Economic Calendar for the Week of October 4-8, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of October 04 - October 08 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. October 04 | 10:00 | Pending Home Sales | Aug | 1.0% | | 5.2% | Moderate | | Tue. October 05 | 08:15 | ISM Services Index | Sept | 51.8 | | 51.5 | Moderate | | Wed. October 06 | 08:15 | ADP National Employment Report | Sept | 18K | | -10K | HIGH | | Thu. October 07 | 01:00 | Jobless Claims (Initial) | 10/02 | 455K | | 453K | Moderate | | Fri. October 08 | 08:30 | Non-farm Payrolls | Sept | 0 | | -54K | HIGH | | Fri. October 08 | 08:30 | Unemployment Rate | Sept | 9.7% | | 9.6% | HIGH | | Fri. October 08 | 08:30 | Hourly Earnings | Sept | 0.1% | | 0.3% | HIGH | | Fri. October 08 | 08:30 | Average Work Week | Sept | 34.2 | | 34.2 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.250% 1/8 Point 15 Yr Fixed 3.625% 3/8 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.125% 0 Point 5/1 Arm 4.250% 1/8 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.250% 0 Point 5/1 ARM 2.750% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. | For the week of Sep 27, 2010 --- Vol. 8, Issue 39 |
Last Week in Review: The Fed met, but did their statement "charm" the markets? Forecast for the Week: The Fed’s favorite gauge of inflation, a read on the consumer perspective of the economy and more are in store, but what will be in store for home loan rates? View: Fall just started, which means now is the perfect time to make sure your house is ready for winter. Do you know what you need to do? |
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It’s been said there’s a pot of gold at the end of every rainbow. Yet, after last week’s regularly scheduled meeting of the Federal Open Market Committee, the Fed helped gold seem more "charmed" than ever. What happened, and what does this mean for home loan rates? Read on for details. As expected, last week the Fed decided to keep the Fed Funds Rate (which is the lending rate banks charge each other for the use of overnight funds, and it is used as a base rate that many other lending rates are based on) at 0.25%. The Fed also reiterated that economic conditions warrant keeping the Fed Funds Rate low for an "extended period".  But the Fed’s Policy Statement was clearly more downbeat on the economy and showed greater deflationary concerns than the previous Fed Statement. It also gave the feeling that the Fed will jump in with more Quantitative Easing (QE) if necessary. QE means the Fed is prepared to create Dollars through Treasury purchases, which in turn causes the Dollar to weaken. And last week, in response to the Fed’s statement, we saw precious metals like Gold and Silver move higher as a hedge against a weaker US Dollar. But, the Fed’s Statement is also significant because another round of QE by the Fed could mean continued good news for Bonds and home loan rates. What’s more, last Friday, respected hedge fund manager, David Tepper, noted that the shift in the Fed’s statement also puts Stocks in an almost "no lose" position. Why is this? Should the economy improve, Stocks go up. But should the economy weaken, and the Fed jumps in with more QE, Stocks could also benefit because more QE alongside a weaker economy brings the Dollar index down, making our exports more attractive. This will greatly help large US multi-national corporations, which have a high influence on the major US Stock indices. The Fed clearly has some big decisions to make in the coming weeks and months to help ensure our continued recovery, and I’ll be watching closely to see how Bonds and home rates are affected. Last week, for instance, Bonds and home loan rates ended the week about .125 percent better than where they began. Another thing to note - there was a mix of housing news last week. Housing Starts rose 10.5% in August from July, which was above expectations and was the highest level in 4 months. Building Permits, a sign of future construction, gained 1.8% and were also better than anticipated. In addition, New Home Sales came in near expectations, while Existing Home Sales were slightly above expectations - but still 19% below the sales pace of a year ago. Also, the inventory of unsold homes was reported at an 11.6 month supply for existing homes and an 8.6 month supply for new homes. Remember: The level of improvement in housing is a big indication of the strength of our economic recovery. If you or anyone you know would like to learn more about taking advantage of historically low home loan rates and a great supply of available homes, please don’t hesitate to call or email me as soon as possible. Or forward this newsletter on to anyone you think may benefit and I’d be happy to talk to them free of charge. IT’S OFFICIALLY FALL, WHICH MEANS IT’S THE PERFECT TIME TO MAKE SURE YOUR HOUSE IS READY FOR WINTER. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR IMPORTANT TIPS THAT CAN HELP... BEFORE THE COLD WEATHER ARRIVES. |
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Will any of this week’s reports be good luck charms for home loan rates? Wednesday’s Gross Domestic Product (GDP) Report is an important one to watch, since GDP is the broadest measure of economic activity. Information about the Labor Market is also important these days, which is why the Labor Department has decided to delay the Jobs Report for September one week, until Friday, October 8. However, this Thursday does bring another Initial and Continuing Jobless Claims Report. Last week’s report was disappointing, as Initial Jobless Claims were above expectations and represented the first rise in 5 weeks. Friday we’ll get a read on the consumer perspective of the economy with reports on Personal Income and Personal Spending as well as the Personal Consumption Expenditure (PCE) Index, which is the Fed's favorite gauge of inflation. Given the deflationary concerns in the Fed’s Policy Statement last week that we discussed above, the Fed will certainly be watching this report closely. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, while Bonds and home loan rates ended the week better than where they began, they were unable to improve above a key resistance level. I’ll be watching to see if they can break through this level this week.
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Chart: Fannie Mae 3.5% Mortgage Bond (Friday, September 24, 2010)  |
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Winter’s Just Around the Corner. Are You Ready? We’ve past the point of no return. The Autumnal Equinox occurred last week, and we’re now headed into the shorter, colder days of fall and eventually winter. Whether you live in a cold northern climate or a moderate southern climate, there are a number of steps you need to take to make sure your house and yard are ready for the impending winter season. By following the advice below, you can make sure your home is ready... inside and out! What should you do outside your home? If you live in an area with high moisture, you'll want to apply an additional coat of sealant to wooden decks. Chances are the summer sun has caused deterioration to the deck's protective layer, and re-sealing it will ensure that the wood won't absorb an excessive amount of water. If your area experiences extremely low temperatures, sealing any cracks in your driveway or sidewalk is also a good idea. If you have outdoor furniture or a barbecue, you'll want to cover them up or store them in the garage. In terms of the shrubbery around the outside of your home, two precautionary steps will greatly improve the way it will look once winter has lifted. First, prune away any weeds or dead foliage from the base of each shrub. Next, add a layer of mulch to the surrounding ground, especially to any perennial flower beds. Once you've tended to the greenery, you may want to winterize your power equipment. Fall is the perfect time for draining gas from lawn mowers and oiling any power tools. You'll also want to drain garden hoses, roll them up, and store them in the garage. If you want to take extra precautions, drain your outdoor faucets and cut off the water. This will keep pipes from freezing and eventually bursting. If you live in an area where it snows, do yourself a favor and make sure your snow removal equipment is in proper working order. In terms of a home's exterior, the key word to keep in mind is "leaks." Leaks not only allow cold air to enter your home but water as well. Start by inspecting the home's foundation and exterior walls. Minor cracks can usually be sealed by using a caulk that's appropriate for the temperature of your region. Special attention should be paid to the wall area around windows and outdoor faucets. Also, if you have storm windows, now is the time to install them. The Great Indoors It's time to make our way inside the home, and take another look at the topic of leaks. Preventing air leaks will not only ensure a cozier home, it will also help you save on your energy bill. Start by weather-stripping all windows and doors. It sounds like a big job, but in most homes this can be accomplished in one day. Also, look for leaks around wall outlets. Once again, the appropriate caulk will do the trick when it comes to creating a proper seal. Don't forget to check the attic or cellar for leaks as well. Regardless of the type of heating system you have, it's a good idea to have it checked and maintained by a professional. Clean ducts and filter replacements can go a long way when it comes to improving efficiency. Also, be sure to clean and vacuum any heating vents, and keep the flue or damper closed when your fireplace is not in use. As far as plumbing is concerned, every homeowner should periodically check their hot water heater for leaks, no matter where they live. This is the last thing you'll want to repair during the cold months. You may also want to consider purchasing a hot water heater blanket. It's a $15 investment that will increase the heater's efficiency. If you live in an area known for very cold weather, you may have a problem with pipes freezing. This can be alleviated by wrapping the pipes that are most prone to freezing with heat tape, which can be purchased at any hardware store. Lastly, if you've experienced serious weather issues in past years, you may want to prepare a comprehensive emergency kit for your home. It never hurts to be prepared. Good luck on your projects... and have a happy and safe winter!
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Economic Calendar for the Week of September 27 - October 1, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of September 27 - October 01 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. September 28 | 10:00 | Consumer Confidence | Sept | 52.9 | | 53.5 | Moderate | | Wed. September 29 | 10:30 | Gross Domestic Product (GDP) | Q2 | 1.6% | | 1.6% | Moderate | | Thu. September 30 | 08:30 | GDP Chain Deflator | Q2 | 1.9% | | 1.9% | HIGH | | Thu. September 30 | 08:30 | Jobless Claims (Initial) | 9/25 | 457K | | 465K | Moderate | | Thu. September 30 | 09:45 | Chicago PMI | Sept | 56.0 | | 56.7 | HIGH | | Fri. October 01 | 10:00 | Consumer Sentiment Index (UoM) | Sept | 67.0 | | 66.6 | Moderate | | Fri. October 01 | 08:30 | Personal Consumption Expenditures and Core PCE | Aug | NA | | 1.4% | HIGH | | Fri. October 01 | 08:30 | Personal Consumption Expenditures and Core PCE | Aug | 0.1% | | 01% | HIGH | | Fri. October 01 | 08:30 | Personal Spending | Aug | 0.3% | | 0.4% | Moderate | | Fri. October 01 | 08:30 | Personal Income | Aug | 0.2% | | 0.2% | Moderate | | Fri. October 01 | 10:00 | ISM Index | Sept | 54.5 | | 56.3 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.375% 0 Point 15 Yr Fixed 3.750% 1/8 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.125% 0 Point 5/1 Arm 4.375% 0 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.375% 0 Point 5/1 ARM 2.750% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Sep 20, 2010 --- Vol. 8, Issue 38 |
Last Week in Review: Bonds may sink or swim on the value of the Chinese Yuan. Here’s why. Forecast for the Week: Why are the markets watching the Autumnal Equinox? View: How to handle fundraisers and donation requests as the new school year starts. |
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"NOT ONLY CAN WATER FLOAT A BOAT - IT CAN SINK IT ALSO." Wise words, but you don’t need to know that Chinese proverb to know that a knife can cut both ways. The same is true with the strong ties between the Chinese and US economies. For example, news came out last week that Chinese factories stepped up production in August, which helped ease concerns of a double-dip recession in US and, as a result, helped move Stocks higher earlier in the week. But additional news regarding China is also impacting the Bond market - and could impact home loan rates in the future, depending on how the events unfold. Here’s what’s happening. There have been numerous accusations that China has kept their currency artificially low, in an effort to fuel their exports. Some American businesses remark that this is an unfair competitive advantage, and call for tariffs to be levied against Chinese goods. It would appear that a stronger Chinese Yuan would help to resolve this problem... but remember there can be some nasty unintended consequences, due to the relationship between Chinese currency and our Bond prices. The way that the Chinese keep their currency weak against the Dollar is by buying massive amounts of our Bonds, including Mortgage Backed Securities. And their heavy buying has helped keep home loan rates low. So strengthening the Yuan would require fewer purchases of our Bonds and Mortgage Backed Securities - and that would be negative for home loan rates. To paraphrase the Chinese proverb above, the value of the Chinese Yuan may help determine whether Bonds sink or swim in the near future. That makes this a complicated situation... but you can count on me to continue to monitor it closely.
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The Chinese Yuan May Help Bonds Sink or Swim  Bonds saw a nice rally earlier last week, due to speculation about the Fed making additional purchases of Bonds in the future. Last week, Goldman Sachs said the Fed may announce another $1 Trillion asset purchase at the November meeting. And while this is just speculation, many Bond traders bid prices higher on the chatter. Adding fuel to this story was an article in the Wall Street Journal, suggesting the same thing. On the other side of the debate, however, is Richmond Fed President Jeffrey Lacker, who stated that the US is far from needing more Bond purchasing by the Fed. In other economic news, the Labor Department reported the inflation measuring Consumer Price Index (CPI) for August at 0.3%. That reading was just slightly above the 0.2% that was expected, but it was still a relatively tame reading. When stripping out volatile food and fuel, Core CPI was flat at 0.0%. This rather benign read on inflation allowed traders to breathe a sigh of relief and push Bonds higher. Prior to receiving the news, many traders were worried the CPI reading would be higher than expected. That’s because the Producer Price Index (PPI) was reported the day before and showed wholesale inflation rose by 0.4% in August. That was above the 0.3% expected and the biggest gain in 5 months! Remember, inflation is the archenemy of Bonds and home loan rates, so any indication that inflation is increasing could cause home loan rates to worsen. IT’S THAT TIME OF YEAR AGAIN! THE START OF THE NEW SCHOOL YEAR MEANS THE BEGINNING OF SCHOOL FUNDRAISERS AND DONATION REQUESTS. ALTHOUGH THE INTENTIONS ARE GOOD, THEY CAN BE TOUGH ON YOUR BUDGET. FOR TIPS ON HOW TO HANDLE ALL THOSE REQUESTS, CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW. |
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The seasons are changing... but watching the calendar can also help us prepare for changes in the market, especially with Stocks now nearing a very important trading date. September 22 - which is the day of the Autumnal Equinox - has often marked an apex and turning point lower for market prices and events. Keep this in mind as we approach this date this Wednesday, especially with Stocks trading near tough technical resistance. If this trend holds, Stocks may head lower and help Bonds and home loan rates improve. But since traders are aware of this potential problem period for Stocks, an avoidance of the trend would likely have Stocks’ players move into the Stock market with more gusto towards the end of next week, prompting a Bond sell off. The Fed will hold their Federal Open Market Committee (FOMC) meeting next Tuesday - and always, the markets will be listening closely when the Fed’s Monetary Policy and Rate Decision are announced. Also on tap for next week are new reports on the health of the housing industry, beginning with Housing Starts and Building Permits for August on Tuesday. We’ll also see reports on Existing Home Sales on Thursday and New Home Sales on Friday. Thursday brings another round of Initial Jobless Claims. Last week, the Labor Department reported Initial Jobless Claims fell to 450,000, below estimates of 460,000 and the lowest reading in two months. While 450,000 claims are still a pretty high number, it is improved from recent readings. Finally, we’ll get a look at manufacturing on Friday with a new report on Durable Goods Orders for August. Durable Goods Orders are considered a leading indicator of manufacturing activity, and the market often moves on this report despite the volatility and large revisions that make it a less than perfect indicator. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see from the chart below, Mortgage Bonds have started to step down after climbing to a record high at the end of August. Overall, Bonds and home loan rates ended the week worse than where they began. The good news is home loan rates are still at historically great levels for homebuyers or homeowners looking to refinance... but that situation won’t last forever.
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Chart: Fannie Mae 3.5% Mortgage Bond (Friday, September 17, 2010)  |
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When Your Child's School Asks You to Give, Give, Give Here's how to handle all those requests for classroom supplies, fundraiser contributions and more. By Cameron Huddleston, Kiplinger.com Parents, I know you're feeling the pull on your purse strings from you children's schools. You're being asked to contribute supplies to your children's classrooms (not just pencils and paper, but even cleaning supplies). You're expected to donate money to help with the schools' fundraisers. You're getting notes from teachers each week about this field trip or that art project you have to pay for if your children want to participate. I know because I'm a parent with one child in a public school and one child in a private preschool. As president of the parent committee at one of my children's schools and vice-president of the parent-teacher organization at the other, I also know how much the schools need financial support from parents. So how do you balance your desire to help with the reality of your own limited funds -- and avoid looking like a cheapskate if you can't open your wallet every time the school asks? Even though this is your child and his school we're talking about, you have to approach this like you would any other financial situation. You have to... Set a budget. If this is your child's first year in school, talk to his or teacher, parents with older children or members of the parent organization to get an idea of how much you'll be expected to spend on supplies, field trips, etc. or to contribute to fundraisers throughout the year. If your child is a returning student, you already have a pretty good idea. Once you have a dollar amount, it will be easier to figure out whether you can make room in your budget to help out your child's school. Our budget worksheet can help. Prioritize. Of course the school, its parent committee and your child's teacher would love for you to donate every time they ask, but they also understand that not every parent can. So contribute only when it fits in your budget and when you feel like your contribution will have the most impact. That might mean skipping the chili-supper raffle in order to buy a coffee mug adorned with your child's art so his or her feelings don't get hurt. Give your time. You might not be able to afford monetary contributions, but you can donate your time. Schools need volunteers to help in the classroom, cafeteria, you name it. Reprinted with permission. All Contents ©2010 The Kiplinger Washington Editors. www.kiplinger.com.
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Economic Calendar for the Week of September 20-24, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of September 20 - September 24 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. September 21 | 08:30 | Housing Starts | Aug | 550K | | 546K | Moderate | | Tue. September 21 | 08:30 | Building Permits | Aug | 555K | | 559K | Moderate | | Tue. September 21 | 02:15 | FOMC Meeting | 9/21 | 0.25% | | 0.25% | HIGH | | Wed. September 22 | 10:30 | Crude Inventories | 9/18 | NA | | -2.49M | Moderate | | Thu. September 23 | 08:30 | Jobless Claims (Initial) | 9/18 | NA |
| 450K | Moderate | | Thu. September 23 | 10:00 | Existing Home Sales | Aug | 4.11M | | 3.83M | Moderate | | Thu. September 23 | 10:00 | Index of Leading Econ Ind (LEI) | Aug | 0.1% | | 0.1% | Moderate | | Fri. September 24 | 08:30 | Durable Goods Orders | Aug | -2.2% | | 0.3% | Moderate | | Fri. September 24 | 10:00 | New Home Sales | Aug | 298K | | 276K | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.375% 0 Point 15 Yr Fixed 3.750% 1/8 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.125% 0 Point 5/1 Arm 4.375% 0 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.375% 0 Point 5/1 ARM 2.750% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
S4459-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Sep 13, 2010 --- Vol. 8, Issue 37 |
Last Week in Review: Home loan rates started to shift... but in which direction? Read on for details. Forecast for the Week: With double doses of manufacturing and inflation news, plus reports on retail sales and jobless claims, plenty of action is ahead. View: Wondering how much house you can afford? Read on for a simple formula that can help. |
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"ACTIONS SPEAK LOUDER THAN WORDS." Despite the markets being closed last Monday for Labor Day, there was plenty of market action... and plenty of words from the Fed. So what happened, and what was said? Read on for details. After the recent 4-month rally in the Bond markets, which has led to some of the best home loan rates in history, money has started shifting over to the Stock market. Why has this happened? Some economic reports have been better than expected in the past few weeks... such as the Jobs Report for August and Consumer Confidence. While that’s great news, it’s important to remember that good economic news - or as has happened recently, better than expected news - often causes investors to move their money out of the safe haven of Bonds to Stocks in the hopes of taking advantage of any gains. So why does this behavior impact home loan rates? When the economy appears strong or starts to improve, and investors move their money from the safe haven of Bonds to Stocks, a decreased demand for Bonds means that Bond prices move lower. And when Bond prices move lower, it means that Bond yields - and consequently home loan rates - move higher. In fact, given the recent better than expected economic news, St. Louis Federal Reserve Bank President James Bullard last week shifted away from previous comments he had made about deflation and said that while he sees a slowdown in the economy for the second half of this year, he predicts a pick up in 2011. He also said that the Unemployment Rate will likely fall next year, and business spending should start to rebound.  While continued improvements to our economy are good news, one big impact is that home loan rates will start to increase. And when home loan rates start to increase, they tend to increase quickly. That being said, while home loan rates ended the week about .125-.25 percent worse than where they began, they are still near some of the best levels we have ever seen! If you or anyone you know would like to learn more about taking advantage of historically low home loan rates while they remain so, please don’t hesitate to call or email me as soon as possible. Or forward this newsletter on to anyone you think may benefit and I’d be happy to talk to them free of charge. One of the most important actions we can take this time of year is to remember all those who were injured, lost their lives, or lost loved ones on September 11, 2001. May we never forget those we lost, and may we thank those who work everyday to keep our families safe and protected. WHEN YOU’RE BUYING A HOUSE, THE LAST THING YOU WANT IS TO BUY MORE HOUSE THAN YOU CAN REALLY AFFORD. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR A SIMPLE FORMULA THAT CAN HELP. |
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This week’s full economic report calendar is sure to bring plenty of action, beginning with Tuesday’s Retail Sales Report. If the news is positive, this could benefit Stocks at the expense of Bonds and home loan rates, so I’ll be listening closely for the details. We’ll get a double dose of manufacturing news this week, with Wednesday’s Empire State Index, which looks at New York State’s manufacturing sector, and Thursday’s Philadelphia Fed Index, which is one of the most important regional manufacturing indices. Double the inflation information is also on tap this week, first with Thursday’s Producer Price Index, which measures inflation at the wholesale level, followed by the Consumer Price Index on Friday. Remember, inflation is the archenemy of Bonds and home loan rates, so any hint that inflation is increasing could cause home loan rates to worsen. Thursday also brings another weekly Initial Jobless Claims Report. Last week, initial claims came in at 451,000, better than the 470,000 expected, and representing the lowest number since the week of July 9th. This adds to the improving trend since the recent peak at 504,000, hit a few weeks ago. Meanwhile, Continuing Claims remained basically steady at 4.5 million - which is still a very high number. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bond prices and home loan rates have worsened since the end of August. I’ll be watching closely to see what happens next.
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Chart: Fannie Mae 3.5% Mortgage Bond (Friday, September 10, 2010)  |
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Simple Formulas for Affordability and Saving When people decide to buy a home, the monthly payment is a crucial factor. Conservative underwriting state that borrowers should allocate no more than approximately 30% of their gross monthly income for a house payment. Looked at from another perspective, this means if your monthly income is $4,000, you should keep your house payment under $1,200 a month. How much home can you afford? Affordability is a function of home price, interest rate and down payment. The one key component in home affordability that is at greatest risk today is rates. The fact is that home loan rates are still at historically low levels. But they can’t stay this low forever. In fact, many experts have stated that home loan rates should really be higher than their current levels, due to some of the stimulus that has benefitted Mortgage Bonds. That means that right now homebuyers can get more for their money than they realize, but if rates go up even a little bit they could miss out. Here’s a simple formula that drives that point home... In simple terms, every 1% increase in home loan rates decreases the buying power of an individual by 10% in home price. This means that if you qualify for a home priced at $200,000 today and home loan rates increase 1%, the amount you could qualify for would be reduced to approximately $180,000 to maintain the same payment. If you could benefit from moving to a new home, don't let this time pass you by. Home prices are starting to stabilize and even increase in many markets, but homes are still at incredibly affordable levels. By making a move now before home prices or rates increase, homebuyers can get more for their money and still get the payment they’re comfortable with. And for those people who haven't refinanced in the last 18 months, today’s situation provides you with the opportunity to either cut your house payment... or save even more over the long run, by reducing the term of your mortgage to a 15 or 20 year fixed rate. As always, I’d be happy to answer any questions and help calculate any scenarios that would help with your decision-making. Just call or email me today.
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Economic Calendar for the Week of September 13-17, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of September 13 - September 17 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. September 14 | 08:30 | Retail Sales | Aug | 0.3% | | 0.4% | HIGH | | Tue. September 14 | 08:30 | Retail Sales ex-auto | Aug | 0.3% | | 0.2% | HIGH | | Wed. September 15 | 08:30 | Empire State Index | Sept | 5.0 | | 7.1 | Moderate | | Wed. September 15 | 09:15 | Industrial Production | Aug | 0.4% | | 0.1% | Moderate | | Wed. September 15 | 09:15 | Capacity Utilization | Aug | 75.0 | | 74.8 | Moderate | | Thu. September 16 | 08:30 | Core Producer Price Index (PPI) | Aug | 0.2% | | 0.3% | Moderate | | Thu. September 16 | 08:30 | Producer Price Index (PPI) | Aug | 0.2% | | 0.2% | Moderate | | Thu. September 16 | 08:30 | Jobless Claims (Initial) | 9/11 | 460K | | 451K | Moderate | | Thu. September 16 | 10:00 | Philadelphia Fed Index | Sept | 0.0 | | -7.7 | HIGH | | Fri. September 17 | 10:00 | Consumer Sentiment Index (UoM) | Sept | 70.5 | | 68.9 | Moderate | | Fri. September 17 | 08:30 | Consumer Price Index (CPI) | Aug | 0.2% | | 0.3% | HIGH | | Fri. September 17 | 08:30 | Core Consumer Price Index (CPI) | Aug | 0.1% | | 0.1% | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.375% 3/8 Point 15 Yr Fixed 3.750% 1/4 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.125% 0 Point 5/1 Arm 4.250% 1/8 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.375% 0 Point 5/1 ARM 2.875% 1/8 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Sep 06, 2010 --- Vol. 8, Issue 36 |
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I hope you and your family enjoyed the Labor Day holiday. And, I sincerely hope you have been enjoying your complimentary subscription to the MORTGAGE MARKET GUIDE WEEKLY. Due to the holiday weekend, the next full issue will arrive on Monday, September 13. In the meantime, check out the special article below from Kiplinger.com with great money management lessons for kids of all ages. This is a great article that can be shared with your family, friends, and associates as we celebrate this unique holiday, so please feel free to forward this email on to them. I am pleased to provide this timely article to you as well as weekly insights into the mortgage and housing industries through the MORTGAGE MARKET GUIDE WEEKLY. If you feel that any of your clients, friends, family members, or associates would benefit from keeping up to date on market and economic trends in this easy-to-read format, please let me know, and I will be more than happy to add them free of charge. Best wishes to you this holiday weekend. And remember, if you need any assistance at this time, just give me a call. |
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Advice for Parents as Their Kids Head Back to School Now is a great time to teach your children lessons about managing money. Here's how. By Janet Bodnar, Kiplinger.com One positive outcome of the financial turmoil over the past couple of years is that parents and kids are talking more frequently about financial issues. In the T. Rowe Price Parents, Kids & Money survey released earlier this year, nearly half of the parents interviewed said they are having more conversations with their children about money and the basics of saving versus spending. And, yes, Mom and Dad, your children are willing to listen. In fact, 65% of kids said they had approached their parents to talk about money issues. Unfortunately, the lessons don’t always stick. For instance, a majority of kids who get an allowance sometimes spend it all at once and many of them come back for more. As students head back to school, parents have a golden opportunity to take advantage of a prime teachable moment for kids of all ages. Elementary and middle-school students: Start an allowance. When children enter first grade, they learn that four quarters equal ten dimes equal one dollar, and they have a more sophisticated understanding of just how far money will go and how to parcel it out. Start with a basic weekly allowance equal to half a child's age. You can adjust that up or down, depending on how much you expect your kids to pay for. Unless you’re very well organized, I don’t recommend that you tie the basic allowance to household chores. It’s tough to keep track of what the kids have done (or not done). And they should be doing some tasks without pay to lend a helping hand. Instead, give the kids financial "chores," such as paying for their own collectibles or refreshments at the movies. Giving youngsters a fixed amount of money - and certain responsibilities to go along with it - teaches them how to make choices, and makes it less likely that they’ll spend it all at once and come back for more. To teach kids the value of being paid for their labors, you can pay for extra household tasks on a job-by-job basis. That also makes it easier for you and the kids to keep tabs on what they’ve done. As children enter middle school, you can expand their allowance - and their responsibilities - to include other expenses, such as mall excursions, after-school snacks with friends and movie tickets. High school students: The average American family will spend more than $600 on clothes, shoes, school supplies and electronics, reports the National Retail Federation, so the back-to-school shopping season is a great time to introduce a clothing allowance. Nothing will focus your teen’s attention on wants versus needs more than having to fill out her wardrobe on a fixed income. Mining her closet for things that are still wearable is a good first step. Then she can decide whether she really wants to splurge on a single pair of Juicy Couture denim leggings for $128 or get a couple of pairs from Old Navy for $34.50 each - and still have money for new tops. This is also a good time to help your kids set up a checking account, especially if they have earnings from a summer job. Community banks and credit unions may be more customer-friendly to teens than big banks. If your bank balks, you can always cosign for the account. Another alternative is to give kids access to their savings account with an ATM card so that they can make deposits and withdrawals. The point is to give them more freedom (and responsibility) to manage their account, and avoid overdrafts, before they head off to college. College students: It often comes as a surprise to parents and kids that they don’t agree on who’s going to pay for which expenses. And it’s an even bigger shock when the bills start rolling in a month or two into the semester. So cover all the bases before you drop your kids at the dorm. Let your kids know, for example, that you’ll pay for textbooks, but to lower the cost they should look into campus book exchanges, discount Web sites, book rentals and digital books (see How to Cut Textbook Costs in Half - or More). You’ll pay for the school meal plan, but beer and pizza on Saturday nights are on their tab. And tell your kids that they’ll have to share discretionary expenses, such as Greek fees, so they should think twice before pledging. New laws covering bank overdraft fees and credit cards for young adults hit college students squarely in the wallet. For advice on how to handle those situations, see 5 Financial Lessons for College Students. Reprinted with permission. All Contents ©2010 The Kiplinger Washington Editors. www.kiplinger.com.
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Economic Calendar for the Week of September 6-10, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of September 06 - September 10 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Wed. September 08 | 10:30 | Crude Inventories | 9/04 | NA | | 3.42M | Moderate | | Wed. September 08 | 02:00 | Beige Book | Sept | | | | Moderate | | Thu. September 09 | 08:30 | Jobless Claims (Initial) | 9/04 | NA | | 472K | Moderate | | Thu. September 09 | 08:30 | Balance of Trade | Jul | -$48.3B | | -$49.9B | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.375% 0 Point 15 Yr Fixed 3.750% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.125% 0 Point 5/1 Arm 4.250% 0 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.375% 0 Point 5/1 ARM 3.000% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
| For the week of Aug 30, 2010 --- Vol. 8, Issue 35 |
Last Week in Review: Home sales slump, while Fed members take part in "I-70 Showdown." Forecast for the Week: A consumer's perspective on the job of economic recovery. View: Summer's not over... take a last-minute vacation with these travel tips! |
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"It all depends on how we look at things." Those words by Carl Jung describe the importance of perspective... which is exactly what last week’s economic reports on home sales require! Existing Home Sales were reported well below expectations and a significant 27% decline from last month. As you can see in the chart below, New Home Sales were also ugly - coming in well below expectations and at the lowest reading on record. But as Carl Jung said, let's take a step back and gain a wider perspective about how we look at those reports... and what they mean! With all due respect, the actions from the Washington academics are invariably filled with unintended negative consequences. The First Time Homebuyer Tax Credit is a good example. It's now clear that the tax credit has done more harm than good...all at an enormous cost to those who pay taxes. Here’s why: The tax credit simply rewarded those who were already going to purchase homes, as well as those who moved up the timing of an inevitable purchase. But now... the "sugar rush" is over, and the void remains. Worse yet, potential buyers are feeling reticent to make a move after "missing out" on the free money. The obvious problem that remains within our faltering economy is the job market. Yet the focus from Washington has been elsewhere. And it can be argued that each landmark passage of reforms - from aviation to healthcare to financial - has made job creations more challenging. But eventually we expect some better decisions to come out of Washington. This, along with time, will help the housing market and overall economy recover - making for a good long-term buying opportunity in today's market. Remember, the best investors buy during the most pessimistic times. To highlight this - as well as give us better perspective and some hope towards the future - here’s something that was recently pointed out by Dennis Gartman, a well-respected market analyst. Back in 1992, an article in Time Magazine included this passage: "The US economy remains almost comatose. The slump already ranks as the longest period of sustained weakness since the Depression. The economy is staggering under many ‘structural’ burdens, as opposed to familiar ‘cyclical’ problems. The structural faults represent once-in-a-lifetime dislocations that will take years to work out. Among them: the job drought, the debt hangover, the banking collapse, the real estate depression, the health care cost explosion and the runaway federal deficit." It's amazing how eerily similar the picture from 1992 compares to today. We all know that the period following 1992 included terrific growth and opportunities in the economy, stock market and housing. If history repeats itself, which it often does, this could point to much better days in the future with opportunities in the present.
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New Home Sales Hit a Record Low in July 2010  Speaking of revisiting the past... back in 1985, the Kansas City Royals faced the St. Louis Cardinals in the World Series. This was known as the "I-70 Showdown" World Series, as I-70 is the route that connects both cities, and the road along which fans traveled between both stadiums. Lately, there's been another I-70 Showdown, between Kansas City Fed President Thomas Hoenig and St. Louis Fed President James Bullard. And interestingly enough, both Fed Presidents spoke at the ongoing Jackson Hole Symposium, which was hosted last week by the Kansas City Fed. Hoenig kicked off things with his opening speech Thursday night. While he has clearly been the most vocal Fed inflation hawk - calling for an increase in the Fed Funds Rate to at least 1% ASAP to prevent future inflation - his opening remarks were mellow. The next morning, it was St. Louis Fed President Bullard's turn at the plate. While Bullard has been quite the inflation dove of late - calling for the Fed to do more to prevent deflation - his remarks were rather surprising. He stated that he doesn't see a double dip recession, despite the economy being a bit softer. He further commented that he expects reasonable growth during the second half of this year and for the economy to be back on track during 2011. Those are pretty positive comments from a man who actually went right from stage to an appearance on CNBC, where he went on to state his most surprising comment, which was that the Fed has done as much as they will do for the Mortgage Backed Securities (MBS) market. The main event came when Fed Chair Ben Bernanke was up. In his comments Friday morning, he appeared to dismiss the deflation scenario, stating it wasn't much of a risk as the Fed has the tools to combat deflation. Those tools include more purchases of longer-term securities - and when you take this comment along with what Bullard said previously about MBS, it looks like the Fed may lean their purchases towards longer term Treasuries. This incestuous relationship between the Fed and the Treasury gives the US a license to print money at low rates, which will almost certainly end with an inflation problem down the road. Another tool would be lowering the interest paid on excess reserves, which may influence banks to lend out that money; however, much like pushing on a string, this has been difficult to do. A final tool would be signaling that the Fed will keep short-term interest rates close to zero for longer than what the market currently expects, or for an "extended period." Some are looking for the Fed to give clarity as to when they'll look to raise rates, such as an unemployment rate that dips to "x" level. But the Fed does not appear to want to be handcuffed to such a trigger, as economic circumstances contain so many moving parts. LOOKING FORWARD TO THIS COMING WEEKEND, THE LABOR DAY HOLIDAY IS ALREADY UPON US. THAT MEANS SUMMER IS QUICKLY COMING TO AN END, BUT THERE’S STILL TIME TO TAKE A WELL-DESERVED, LAST-MINUTE VACATION. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW FOR TRAVEL TIPS THAT CAN HELP YOU GET AWAY YET THIS SUMMER. |
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This week, we’ll get a read on the consumer perspective of the economy, with reports on Personal Income and Personal Spending Monday as well as the Personal Consumption Expenditure (PCE) Index, which is the Fed's favorite gauge of inflation. Those reports will be followed by a report on Consumer Confidence on Tuesday. Manufacturing will also be in the news Tuesday with the Chicago PMI, which surveys more than 200 Chicago purchasing managers about the manufacturing industry and is a good indicator of overall economic activity. The ISM Index is due out the day after that. This is the king of all manufacturing indices and is considered the single best snapshot of the factory sector. We’ll also see the first employment report of the week on Wednesday morning with the ADP National Employment Report, which comes just a day before the Initial Jobless Claims report on Thursday. Initial Jobless Claims fell 31,000 in the latest week to 473,000, below the expected 485,000. And while that is still bad, at least for one week it broke a bad trend of consecutively higher readings. But the big news of the week is expected on Friday, when the Labor Department releases the official Jobs Report for August. With so much of the economy in a holding pattern because of unemployment concerns, the markets will definitely be paying attention to this report. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see from the chart below, Mortgage Bonds weren’t able to close above resistance last week. Overall, Bonds and home loan rates ended the week near where they began, which is at historically great levels for homebuyers or homeowners looking to refinance. If you’re curious how you or someone you know can benefit from these levels, please contact me today to discuss your unique situation.
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Chart: Fannie Mae 3.5% Mortgage Bond (Friday, August 27, 2010)  |
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Last-Minute Vacations Labor Day Weekend is fast approaching and if you think it’s too late to head out of town for the weekend, think again. Here are some great tips for planning an adventure, last minute or otherwise. Be flexible In order to pull off a last-minute vacation you need to be flexible with your schedule, your destination, and your service providers. Rigidity in any of these areas can easily translate into paying increased costs. Have a game plan Taking a last-minute vacation doesn't mean you shouldn't have a game plan. Start looking for deals during the middle of the week, as most airlines file their Web specials on Tuesdays and Wednesdays. If possible, concentrate on flights departing from major hub airports. And when booking your trip, be sure to include a Saturday-night stay. Search diligently There is no shortage of great websites for purchasing discounted airfares and hotel rooms. Check out: Don't forget about travel agents Many travel agents will purchase bulk deals, giving them access to better prices. It's definitely a good idea to make a few calls as part of your search. How about a cruise? Cruises can make for great last-minute vacations, especially if you live near a port of embarkation, and do not require a plane flight. Generally speaking, the price of a cruise includes your travel, lodging, food and much of your entertainment. While some additional charges will apply depending on the cruise, it is a fantastic option that allows you to see many destinations for a lower cost. Timeshares Timeshare condos, rented directly from the owner, can offer some tremendous savings as well as more bang for your buck. While it does require diligence and common sense on your part, eBay is a great place to start your search. When it comes to booking a trip, last minute or otherwise, be flexible and search diligently. The deals are out there, so go out and find them! And have a wonderful upcoming Labor Day weekend. Economic Calendar for the Week of August 30 - September 3, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of August 30 - September 03 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. August 30 | 08:30 | Personal Income | Jul | 0.2% | | 0.0% | Moderate | | Mon. August 30 | 08:30 | Personal Spending | Jul | 0.3% | | 0.1% | Moderate | | Mon. August 30 | 08:30 | Personal Consumption Expenditures and Core PCE | Jul | 0.1% | | 0.0% | HIGH | | Mon. August 30 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 1.4% | HIGH | | Tue. August 31 | 09:45 | Chicago PMI | Aug | 57.5 | | 62.3 | HIGH | | Tue. August 31 | 10:00 | Consumer Confidence | Aug | 50.0 | | 50.4 | Moderate | | Wed. September 01 | 08:15 | ADP National Employment Report | Aug | 13K | | 42K | HIGH | | Wed. September 01 | 10:00 | ISM Index | Aug | 53.3 | | 55.5 | HIGH | | Thu. September 02 | 10:00 | Pending Home Sales | Jul | 0.0% | | -2.6% | Moderate | | Thu. September 02 | 08:30 | Productivity | Q2 | -1.6% | | -0.9% | Moderate | | Thu. September 02 | 08:30 | Jobless Claims (Initial) | 8/28 | 475K | | 473K | Moderate | | Fri. September 03 | 08:30 | Non-farm Payrolls | Aug | -118K | | -131K | HIGH | | Fri. September 03 | 08:30 | Unemployment Rate | Aug | 9.6% | | 9.5% | HIGH | | Fri. September 03 | 08:30 | Hourly Earnings | Aug | 0.1% | | 0.2% | HIGH | | Fri. September 03 | 08:30 | Average Work Week | Aug | 34.2 | | 34.2 | HIGH | | Fri. September 03 | 10:00 | ISM Services Index | Aug | 53.2 | | 54.3 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.375% 0 Point 15 Yr Fixed 3.750% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.375% 0 Point 5/1 Arm 4.250% 0 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.250% 0 Point 5/1 ARM 3.125% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Aug 23, 2010 --- Vol. 8, Issue 34 |
Last Week in Review: Change is needed in the housing and job markets. Find out what kind... and how will those steps impact home loan rates? Forecast for the Week: We’ll get reads on the housing market and the economy this week, but what direction will the reports show? View: It may take two credit reports to make a closing go right. Find out why in this week’s View. |
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"There is nothing wrong with change, if it is in the right direction." Winston Churchill. And certainly, seeing our economy improve is change in the right direction. But what steps will get us there... and how will those steps impact home loan rates. Here’s what you need to know.  Last Tuesday, the government held a "Future of Housing Finance" conference to discuss changes needed in this area. Most participants agreed that government assistance for housing must be reduced but not eliminated. Bill Gross, from PIMCO and one of the panelists, called for a massive refinancing of certain mortgages backed by Fannie/Freddie/FHA, believing such a move would lift home prices 5% to 10% and provide a $50 Billion stimulus to the economy. I will be watching this situation closely for further developments. Home sales and the job market - two key aspects to our continued recovery - are also areas we need to see change in an improving direction. Last week, the NAHB Housing Market Index came in a bit worse than expectations and showed housing to be at a 17-month low. It can be argued that the tax credits actually hurt the housing market by not adding any sales, just pushing them up. This has now resulted in a void or softer period in the market, potentially wasting billions of dollars. Housing Starts and Building Permits were also reported lower than expected last week. Clearly, demand for housing has slowed over the past few months, due to the expiration of the Home Buyer Tax Credit and persistently high unemployment. Speaking of unemployment, awful is the only way to describe last week’s Initial Jobless Claims report. According to the report, 500,000 people filed to receive unemployment benefits for the first time, which was well higher than the lofty 475,000 expected and the highest reading since November 2009. In addition, between Continuing Claims and people receiving Emergency Unemployment Compensation or EUC, the combined total of people receiving unemployment benefits now equals 9.25 Million people. The bottom line is this: The labor market is the foundation of our economy. Job growth and confidence is the best and most sustainable way for our economy to recover. The present anti-business regulatory environment is pushing Initial Claims, a leading indicator on the health of the labor market, in the wrong direction. But home loan rates, meanwhile, continue to remain at historic low levels. Though keep in mind, inflation is the arch enemy of Bonds and home loan rates, which means it can cause both to worsen. Both the Producer Price Index (which measures inflation at the wholesale level) and the Consumer Price Index were recently reported hotter than expected. If rates do start to rise, they will likely do so quickly. If you or anyone you know would like to learn more about taking advantage of historically low home loan rates, please don’t hesitate to call or email. Or forward this newsletter on to anyone you think may benefit and I’d be happy to talk to them free of charge. WHEN YOU’RE BUYING A HOUSE, THE LAST THING YOU WANT IS AN UNSUCCESSFUL CLOSING. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR SOME INFORMATION THAT WILL HELP ENSURE YOUR HOMEBUYING EXPERIENCE MOVES IN THE RIGHT DIRECTION. |
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More housing and job news follows this week, but will there be change in an improving direction? We’ll find out with Tuesday’s Existing Home Sales Report, Wednesday’s New Home Sales Report, and Thursday’s Initial and Continuing Jobless Claims Report. Also, on Wednesday we'll get a read on the health of the economy with the Durable Goods Report, which gives us an update on consumer and business buying behavior on big-ticket items that last for an extended period of time. Meanwhile, Friday will bring another read on the economy with the Gross Domestic Product Report, which is the broadest measure of economic activity. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, last week’s weak economic news helped home loan rates hit record lows again, but volatility was rampant. I’ll be watching closely to see what this week brings.
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Chart: Fannie Mae 3.5% Mortgage Bond (Friday, August 20, 2010)  |
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Credit Reports: One May Not Be Enough This summer, Fannie Mae instructed lenders that they should adopt a new policy that would include a second review of an applicant's credit report just prior to closing. Why? The answer is simple: the credit profile of a borrower may have changed between the time of the initial review of the credit report and the time of closing. How will this impact the home loan? The potential impact to a borrower who has utilized credit to make significant purchases after the initial credit report could include: - A delay in closing
- Increase of closing costs and/or interest rate
- A decreased loan amount
- Denial of the loan
That’s right, in the worst-case scenario, a change in credit could even result in a loan being denied - even after an original approval had been granted. What should homebuyers do (or not do)? In order to eliminate any possibility of potential problems before closing, anyone in the application process should use credit sparingly and make sure they adhere to the tips provided below by credit expert Linda Ferrari of Credit Resource Corp: - Don't do anything that causes a red flag to be raised by the scoring system.
- Don't apply for new credit of any kind.
- Don't pay off collections or charge offs.
- Don't max out or over charge on your credit accounts.
- Don't consolidate debt onto one or two credit cards.
This list is not comprehensive, but it does give you a peek into situations that could create issues and could also be contrary to some ideas you have read previously. -------------------------- Economic Calendar for the Week of August 23-27, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of August 23 - August 27 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. August 24 | 10:00 | Existing Home Sales | Jul | 4.75M | | 5.37M | Moderate | | Wed. August 25 | 08:30 | Durable Goods Orders | Jul | 3.1% | | -1.2% | Moderate | | Wed. August 25 | 10:00 | New Home Sales | Jul | 330K | | 330K | Moderate | | Wed. August 25 | 10:30 | Crude Inventories | 8/21 | NA | | -0.818M | Moderate | | Thu. August 26 | 08:30 | Jobless Claims (Initial) | 8/21 | 485K | | 500K | Moderate | | Fri. August 27 | 08:30 | Gross Domestic Product (GDP) | Q2 | 1.4% | | 2.4% | Moderate | | Fri. August 27 | 08:30 | Chain Deflator | Q2 | 1.8% | | 1.8% | Moderate | | Fri. August 27 | 10:00 | Consumer Sentiment Index (UoM) | Aug | 69.4 | | 69.6 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.625% 0 Point 15 Yr Fixed 3.875% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.250% ½ Point 5/1 Arm 4.500% ½ Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.500% 0 Point 5/1 ARM 2.875% 1 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. For the Month of August 2010 --- Vol. 5, Issue 8 | |
| | | | | | What's in a name? This month's edition is all about names. For instance, the Financial Reform bill was recently signed into law. But does this new law really reform the financial system, as the term suggests? The first article below provides a brief overview of the changes in the law. You'll also find two articles below that can help you remember names of people you meet, while protecting your own good name from identity theft! - Ch-ch-ch-ch-changes - Are the new Financial Reform changes really worth singing about?
- It pays to have a good memory - Give your networking or job search a boost with these techniques.
- Q&A: Identity protection? - Follow these simple steps to make sure your identity is protected!
If you have any questions or need any help at this time, just call or email to discuss your unique situation. And, please forward this newsletter to friends, family members and coworkers who may find the information helpful. | |
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| | | | | |  They say the only constant is change... and more change is coming! Last month, the sweeping Financial Regulation Bill was signed into law and promises to bring a wave of new changes to the financial system. But the question is: what does this change mean to you? Here's what you need to know. Generally speaking, the law calls for a new consumer protection agency and prohibits banks from taking risky bets. While those things are important, it's also important to realize that this legislation... over 2,000 pages worth... amazingly does nothing to address the core reasons for the financial collapse. Fannie Mae and Freddie Mac are completely left out of this legislation. Additionally, the credit rating agencies - which may have played the largest role in the financial collapse - also go unmentioned. In fact, when former Fed Chairman Alan Greenspan was asked about Financial Regulation, he noted that this was the first time the Fed was not asked to write a regulation of this kind. He also said that there are "unintended consequences" in every page of this bill. And one consequence we've seen already is that corporations are hoarding cash, and are somewhat stuck like a deer in the headlights due to the uncertainty that this and other pending legislation is creating. And when corporations hoard cash, they don't typically hire workers, and job creation is crucial to our recovery. What all this will mean for our economy and home loan rates remains to be seen... which is why now is the perfect time to act, while home loan rates continue to be some of the best they have ever been! If you or anyone you know would like to learn more about this exceptional opportunity, please don't hesitate to call or email. Or forward this newsletter on to anyone you think may benefit and I'd be happy to talk to them free of charge. | |
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| | | | | |  In today's tough job market, it can pay (quite literally) to have a good memory. That's because a good memory can help you stand out from the competition - whether you're networking and trying to remember names or researching a potential employer and trying to remember specific points. Unfortunately, many of us have trouble remembering the name of someone two minutes after we shake her hand. If that sounds like you, don't worry. you're not alone. It's actually an extremely common occurrence for many people. The good news is there is plenty of research on the subject and there are a number of simple, practical steps you can take to improve your memory now and long into the future. With that in mind, here are a couple of great tips for proactively strengthening your memory: Tip #1: Neurobic Exercise You know all about the wonderful effects aerobic exercise has on the heart, but have you heard of neurobic exercise for the brain? According to Lawrence Katz, co-author of Keep Your Brain Alive: 83 Neurobic Exercises, the best exercise for the brain is to force it to form "new patterns of association" or new pathways. In other words, challenge your brain every day. take it off autopilot and make it relearn or create new associations with the most routine activities of your day. Katz's book offers numerous examples of small changes you can make to activate your brain, including: brushing your teeth with the other hand; taking an alternative route to work; moving your wastebasket to the other side of your desk; closing your eyes while putting your key in and unlocking the front door; and changing where you and your family members sit at the dinner table. So if you feel like your memory might be starting to slip a bit, try some of these simple neurobic exercises today! Tip #2: Mnemonic Drilling There are actually three steps or stages of memorization: acquisition, consolidation, and retrieval. That means, once we acquire new information, like someone's name for instance, the way in which we consolidate that data will directly affect how well we're able to retrieve it from memory. Whether you're a visual or auditory type of learner, there are many mnemonic devices that can help you to better organize or consolidate the new information that you need to recall. Here's an example of simple steps that might help: First, associate the data you want to remember with common images. For instance, let's say you meet someone named Jennifer Green. Imagine Jennifer playing golf, or picture her wearing all green clothes, or imagine her face painted completely green. Second, think of associations you can use to help you remember this person. For instance, link Jennifer to the quality that best fits her personality (use alliteration and rhymes whenever possible): Jolly Jennifer Green. Finally, connect sound to your memory by saying the name aloud. Do this regularly and, before you know it, you'll never forget anyone's name again! And that can give you a nice advantage in job interviews and networking. | |
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| | | | | | QUESTION: How can you protect yourself from identity theft? ANSWER: According to statistics released by the U.S. Department of Justice, about 1.6 million households experience theft of existing accounts other than a credit card (such as a banking account), and 1.1 million households discover misuse of personal information (such as their social security number) annually. Here are some important tips for keeping your information safe and sound: Just the facts - Rather than give unnecessary information (like your date of birth and income level) when you fill out things like warranty cards or supermarket club cards, start sharing only what's really necessary in every situation. Navigating the net - Never post your address or your full date of birth on any social networking sites because both are pieces of information needed to steal your identity. Also, when applying for a job, thoroughly investigate companies before you submit your resume and check the privacy policies of any online job boards to make sure they won't sell your information. Number no-nos - Never keep your Social Security number in your wallet, glove compartment, or any other easy-to-access place. Also, never have it printed on your checks or use it as your password. Finally, if you use an online job site, never give a potential employer your Social Security number until they are ready to hire you. Shed it - When you are ready to get rid of old documents that contain important information, make sure you shred them. The bottom line is this: When it comes to your personal information, share it on a need-to-know basis only! | |
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Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. | For the week of Aug 02, 2010 --- Vol. 8, Issue 31 |
Last Week in Review: Stocks and Bonds danced around each other this week, reacting to a mix of strong and weak economic data. Find out what this means for home loan rates. Forecast for the Week: A busy news week ahead, including the heavy hitting Jobs Report, waiting in the wings until Friday morning. View: Learning to use money wisely can start at any age, especially with these seven tips for teaching kids financial responsibility. |
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THEY SAY IT TAKES TWO TO TANGO... And the relationship we see in the markets between Stocks and Bonds is a dance of its own, as one often improves at the expense of the other... while one kicks higher, the other often dips lower. But why... and how does this impact home loan rates? Here’s what you need to know. Weak economic news normally causes money to flow out of Stocks and into Bonds, because investors see Bonds as a safer haven when the economy appears weak. An increased demand for Bonds means that Bond prices move higher, as with any item when there is heavy demand for it. And when Bond prices move higher, it means that Bond yields - and consequently home loan rates - move lower. So any movement of money into Bonds typically helps home loan rates improve. Conversely, strong economic news normally has the opposite result. When the economy appears strong, investors move their money to Stocks in the hopes of taking advantage of any gains... and often this money is being pulled back out of Bonds. In turn, this often causes Bonds and home loan rates to worsen as a result.  | Last week, we saw this dance in several instances. Through the week, Stocks danced higher as strong earnings reports continued, with more than three-quarters of the S&P 500 companies who've reported second quarter earning beating expectations. In addition, conditions in Europe look to be improving... and this is quite the turnaround from just a few weeks ago when things looked to be horrible. The bank stress tests - whether they are to be believed or not - appear to have helped conditions overall, and brought some strength to the Euro and also to our Stocks, which improved on the news. This is important to note, as part of the big rally we have seen in the Bond market and the big improvement in home loan rates came from the rush of funds from Europe to the US, and in particular to our Bond market, as protection from a precipitously declining Euro. If conditions in Europe continue to improve, money might just flow back over to Europe, and Bonds and therefore home loan rates could worsen. |
However, not all of our economic news has been positive lately, and some of this weaker economic date helped Bonds and home loan rates maintain their historic levels last week. Durable Goods Orders, manufactured goods lasting at least three years, fell 1.0% for June. This was the biggest decline in nearly a year, signaling that economic growth was stagnant in the second quarter. In addition, the Advanced or first reading for 2nd Quarter GDP showed the US economy slowed to a 2.4% annual growth rate, which represents the lowest number in a year. These readings show that consumers and businesses remain cautious and reluctant to spend money. And that's understandable... concerns remain about the labor market, the housing market, and the economy overall. All in all, the news from last week helped Bonds and home loan rates improve, and they ended the week slightly improved from where they began. If you or anyone you know would like to learn more about taking advantage of historically low home loan rates, please don't hesitate to call or email. Or forward this newsletter on to anyone you think may benefit, and I'd be happy to talk to them free of charge. EVEN THOUGH SCHOOL'S OUT FOR THE SUMMER, LEARNING TO MAKE SMART MONEY CHOICES IS IMPORTANT AT EVERY AGE. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR SOME TIPS ON HELPING YOUR KIDS USE MONEY WISELY. |
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This week's news could cause a little more twist and shout between Stocks and Bonds, beginning with Tuesday's Personal Income and Personal Spending Reports, which will give us a look at the Core Personal Consumption Expenditure (PCE) Index. PCE is the Fed's favorite gauge of inflation, and they will most certainly be watching this number closely in advance of their August 10 meeting of the Federal Open Market Committee (FOMC). And there will be plenty of labor market news ahead this week. After Thursday's weekly Initial and Continuing Jobless Claims Report, Friday will bring the Labor Department's Official Jobs Report for July. Last month's report showed that 125,000 jobs were lost during the month of June, and remember, we need to create 125,000 to 150,000 jobs each month - via both private and government jobs - just to keep up with the pace of population growth. With 3.25M people claiming EUC (Emergency Unemployment Compensation) benefits according to last week's Jobless Claims Report, it doesn't appear that this week's official Jobs Report for July will paint a rosy picture. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, bonds improved above important resistance, allowing home loan rates to continue to improve. I’ll be watching to see if this continues. ----------------------- Chart: Fannie Mae 4.0% Mortgage Bond (Friday, July 30, 2010)  |
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7 Ways to Teach Financial Responsibility to Children If the current economic climate has taught us anything, it’s that financial education and responsibility are critical in today's fast-paced, wired world. All too often, however, children grow up immune to the financial world around them. As a result, they're often ill equipped to manage their own finances when they become adults and leave home. With the economy in the news almost daily, now’s a perfect time to start educating your children about how to manage money more responsibly. The tips below can help you get started. 1. Pay an Allowance If your children don't have money of their own, it's hard for them to really grasp the value of it. So if you don't pay your children allowance, consider starting. You don’t need to pay a lot - a little goes a long way. The most important thing is that your children learn the value of completing even small chores around the house to earn their own money. 2. Make a Plan and Set Guidelines Before you actually start paying the allowance, sit down with your children and set some expectations. Discuss the specific chores and timelines for completing those chores, as well as the amount of money they’ll earn for each chore and when they’ll be paid. This helps instill a strong work ethic in children as well as drive home the message that money is earned, not given. 3. Save for the Future As part of your financial discussion, consider implementing a savings rule for your children. For example, make a rule to save half or one-third of their allowance. You can go with them to the bank to establish a savings account in their name and then take them to make their deposits. Or, if your children are still young, you can decorate a jar to use as a special savings bank at home. 4. Educate on Interest Once a month, sit down with your kids and count how much they have deposited, how much interest they have earned, and how much they have as a result. Compare the amounts each month, so your children can see the benefits not only of saving, but also the benefits of compounding interest. 5. Take Your Children Shopping Take your children grocery shopping with you. As you go down your shopping list, have your children help you compare the prices of the different brands, sales, and quantities per package. You can also have you children try to keep a running tally and make a guess of what the total cost will be. 6. Set Them Free to Shop Once your children have a sense of money matters, you may want to take the lesson up a notch. For instance, when your children need new school clothes, you try giving them the money and putting them in charge of what to buy. Then, as they shop, help them compare the prices and number of items they can purchase within their budget. You could even purchase a gift card with a specific dollar value on it. That will help your children not only learn about the value of a dollar and making smart purchases, but it’ll also introduce them to the credit card system, in which money may not seem real because it’s unseen. In today’s electronic financial world, this lesson will become more and more important as your children get older. 7. Teach by Example Remember, children are always watching. So if you educate them on saving for purchases and budgeting but make rash decisions on big-ticket items yourself, you may find them learning a different lesson than you intend. So make sure you follow your own rules when it comes to spending, saving, and fiscal responsibility. At times your children may beg for an exception. But by being consistent, your children will be much better prepared to deal with the real financial world that they’ll face when they grow up.
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Economic Calendar for the Week of August 2-6, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of August 02 - August 06 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. August 02 | 10:00 | ISM Index | Jul | 54.2 | | 56.2 | HIGH | | Tue. August 03 | 08:30 | Personal Income | Jun | 0.1% | | 0.4% | Moderate | | Tue. August 03 | 08:30 | Personal Spending | Jun | 0.0% | | 0.2% | Moderate | | Tue. August 03 | 08:30 | Personal Consumption Expenditures and Core PCE | Jun | 0.1% | | 0.2% | HIGH | | Tue. August 03 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 1.3% | HIGH | | Wed. August 04 | 10:15 | Crude Inventories | 7/31 | NA | | 7.31M | Moderate | | Wed. August 04 | 10:00 | ISM Services Index | Jul | 53.0 | | 53.8 | Moderate | | Wed. August 04 | 08:15 | ADP National Employment Report | Jul | 25K | | 13K | HIGH | | Thu. August 05 | 08:30 | Jobless Claims (Initial) | 7/31 | 455K | | 457K | Moderate | | Fri. August 06 | 08:30 | Non-farm Payrolls | Jul | -87K | | -125K | HIGH | | Fri. August 06 | 08:30 | Unemployment Rate | Jul | 9.6% | | 9.5% | HIGH | | Fri. August 06 | 08:30 | Hourly Earnings | Jul | 0.1% | | -0.1% | HIGH | | Fri. August 06 | 08:30 | Average Work Week | Jul | 34.1 | | 34.1 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% 0 Point 15 Yr Fixed 4.125% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.250% ½ Point 5/1 Arm 4.375% ½ Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% 0 Point 5/1 ARM 3.375% 1 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Jul 26, 2010 --- Vol. 8, Issue 30 |
Last Week in Review: The Fed and "uncertainty" dominated the news last week... what was all the buzz about? Forecast for the Week: What should you be on the look out for this coming week? View: 10 things you overpay for... and how you can start saving today! |
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"UNCERTAINTY AND MYSTERY ARE THE ENERGIES OF LIFE." And while the Bond market may agree with R.I. Fitzhenry's words about uncertainty, most investors in the Stock market don't... just ask Fed Chairman Ben Bernanke. Last week, Mr. Bernanke testified before the Senate and House Banking Committees, making several cautious comments on the state of the labor market and inflation, as well as stating that the Fed would be ready to take action should economic conditions worsen. But the comment that spooked Stocks and helped Bonds was when Mr. Bernanke said the economic outlook is "unusually uncertain." Stocks hate uncertainty but Bonds usually perform well as a safe haven, so Bonds and home loan rates improved upon the utterance of these words. Mr. Bernanke also stated that one way to normalize the size and composition of the Federal Reserve's securities portfolio would be to sell some holdings of agency debt and Mortgage Backed Securities. And an article in the New York Times concurred, stating that the Fed’s MBS holdings are already problematic and put the Fed in a tough position where it may find itself having a conflict of interest - and here’s why. While inflation is subdued for now, it’s only a matter of time before the Fed will need to hikes rates in order to keep inflation controlled. But any hike in rates would cause the Fed to lose significant value on their Mortgage Backed Security holdings. So the tough question is... how will the Fed act, in light of this conflict? Remember, the Fed purchased $1.25 Trillion worth of Mortgage Bonds, as well as several hundred Billion in Treasuries. Those purchases helped drive rates down towards historic low levels - and yet the housing market is still not entirely healthy. So this also begs the question, what would cause a different result? One perspective is that the Fed - like many in Washington - missed the point. The problem is not that rates need to be lower. Many individuals already want to purchase or refinance at today’s low rates, but are unable to do so because of tighter underwriting guidelines, as well as low valuations. A perfect example is the "no income verification" loan - which has been cast in a negative spotlight as a "liar loan" and virtually eliminated. But there has been a good track record for those loans in the past when underwritten properly. If the government were to direct some resources towards reestablishing some of these more reasonable lending tools, the results m ight be better. Instead - the sweeping Financial Reform Bill was signed into law last week, and the implications of this 2,300-page legislation are sure to be broad. Former Fed Chairman Alan Greenspan himself said that every page appeared to be loaded with unintended consequences... so as this legislation is analyzed and dissected, you can be assured I’ll be keeping a close eye on the impacts it may have and will keep you informed. ----------------------- Fed Chair Bernanke Calls the Outlook "Unusually Uncertain"  But the Federal Reserve and Financial Reform are only part of the picture. Mortgage Bonds and home loan rates are also impacted by global financial news. In fact, just last week the Bank of Canada raised rates by .25%, up to .75%... and this could have a major implication on our Bonds. Part of the reason home loan rates have dropped so much has been the currency trade, where the Euro has weakened against the Dollar. Europeans have been taking advantage of the currency trade, and parking money in the US - much of which is in our Bonds. But now, with Canada’s improving economy and slightly higher rate environment, their yields might not only be more attractive for Europeans, but their currency may provide a more lucrative option as well. And the sell-off in our Bonds early last week could have been somewhat due to traders anticipating this move by the Bank of Canada. Another story of uncertainty is developing in China. China's reserves, which are held mostly in US Treasuries as well as Mortgage Backed Securities, stand at $2.5 Trillion. But last quarter marked the first time in a long time that these holdings did not increase. Does this mean that China is slowing their US debt purchases? I will be keeping close tabs on this because a slowdown in US debt purchases from China could adversely impact the Bond market, as their purchases have also contributed to the low rate environment in the US. THESE BIG-PICTURE DEVELOPMENTS IMPACT THE MARKETS AND, IN TURN, YOUR FINANCIAL SITUATION. BUT EVERYDAY PURCHASES CAN ALSO DRAIN YOUR HOUSEHOLD BUDGET. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW TO LEARN HOW YOU CAN STOP OVERPAYING... STARTING RIGHT NOW. |
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A number of reports which have the potential to move the markets are coming this week, and we’ll start off with a dose of housing news right away Monday morning with the New Home Sales report. This report comes after last week’s worse-than-expected report on Housing Starts, so the markets will be paying close attention to this report. The manufacturing sector of the economy will also be in the spotlight this week. On Wednesday, Durable Goods Orders will be released. Then Friday brings the Chicago PMI, which surveys more than 200 Chicago purchasing managers about the manufacturing industry and is a good indicator of overall economic activity. On Thursday, we’ll see another weekly read on Initial Jobless Claims. Last week, Initial Jobless Claims rose by 37,000 to 464,000, which was above the 445,000 that was expected. Overall, unemployment is still disappointingly high. The news heats up on Friday when we get a look at the Gross Domestic Product (GDP) and GDP Chain Deflator for the second quarter. The Chain Deflator is a key inflation measure included in the GDP Report. And since inflation is the archenemy of Bonds and home loan rates, this report could be a market mover. Finally, there are two reports on tap this week regarding how consumers feel about the economy with the Consumer Confidence report on Tuesday and the Consumer Sentiment Index on Friday. In addition, the Treasury Department will auction $38 Billion in 2-Year Notes on Tuesday, $37 Billion in 5-Year Notes on Wednesday, and $29 Billion in 7-Year Notes on Thursday. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As stated above, uncertainty in the US and abroad has been impacting the markets, which has helped Mortgage Bond prices climb steadily higher since April, as you can see in the chart below. And this means that home loan rates have moved steadily lower. This presents an unbelievable opportunity for people looking to purchase or refinance a home. It only takes a few minutes to see how you or someone you know can benefit from today’s low rates. Even if you’re not sure you can refinance, it doesn’t hurt to conduct a quick review. Please call me today before this opportunity passes by. -----------------------
Chart: Fannie Mae 4.0% Mortgage Bond (Friday, July 23, 2010)  |
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10 Things We Overpay For: You Can Save Big by Buying Cheap Alternatives Instead By Joan Goldwasser, Kiplinger.com Does the avalanche of news about layoffs, business losses and a declining stock market have you looking for ways to cut your spending so you can beef up your savings? We're here to help, with suggestions for less-expensive alternatives to ten everyday purchases (for more ideas, go to www.BillShrink.com, which tracks cell-phone plans and credit cards). Afternoon snacks. Do you munch protein bars as a healthier alternative to a chocolate pick-me-up? You could easily be paying more than $2 per bar and consuming just as much sugar as you would with your favorite candy bar. Stock up on fruit for a fraction of the cost when you do your grocery shopping. You'll be fitter and save a bundle. Bottled water. Yes, it's important to drink water every day. But picking up the bottled variety with your lunch is an expensive way to stay hydrated. Rather than spend $2 a day for water, buy a pitcher and a filter for about $20 and drink as much as you want for pennies a glass. A caffeine fix. Can't get through the day without at least one cuppa Joe? Stopping at Starbucks or Dunkin' Donuts can set you back as much as $1.65 per cup. Splurge on a pound of gourmet coffee for $8 to $13 and you can make 40 cups for about 20 cents to 33 cents each. Favorite tunes. Do you rush out to buy the latest CD by your favorite group even though there are only one or two songs you really like? Instead of paying up to $18 for the CD, download those cuts you want from iTunes for 99 cents each, or from Amazon for as little as 79 cents. A night at the movies. An evening for two at your local theater costs an average of about $20, including the popcorn - and closer to $30 in major cities. And that doesn't even count the babysitter. For just $5 a month, you can watch two movies from Netflix or pay $9 for unlimited viewing. If you're willing to wait a little longer for new releases, borrow them free from your local library. (See Cut the Cable Cord for other inexpensive entertainment options.) Fresh flowers. A bouquet of spring blooms brightens up a room and your mood. But purchasing it from a florist at $25 and up can quickly put a dent in your budget. Check out your local grocery store, which offers a selection of seasonal bouquets for $5 to $10. Fruits and veggies. Sure, precut vegetables and salad mixes that are washed and bagged save a little time. But you'll pay for the convenience. Broccoli florets and sliced peppers cost $6 per pound, compared with one-third to one-half the price for the uncut versions. Lettuce varieties that are pre-washed and bagged sell for $5.98 a pound. But it takes just minutes to wash and spin dry enough arugula for your evening salad, and you'll pay one-third as much. Buying whole strawberries rather than sliced ones that are prepackaged cuts the price by 75%. Credit-card fees. Every month, millions of credit-card customers pay their bills late, and they're assessed as much as $39 each time. Set up an automatic debit and you'll never incur another late fee. ATM fees. Each time you use an out-of-network ATM you pay an average of $3.43. Do that once a week and you'll rack up almost $180 in ATM fees every year. Avoid those charges by selecting a bank with a large ATM network or an online account that reimburses your ATM fees - such as the eOne no-fee account from Salem Five Direct bank. Another alternative: Get cash back at the grocery store. Fax and mail services. Instead of paying FedEx $1.49 to fax one page, sign up to send free faxes from a provider such as faxZero or K7.net. Save on shipping with the U.S. Postal Service's priority mail service. You'll pay just $4.95 to mail an envelope or small box anywhere in the U.S., and your parcel is likely to arrive within two days. Larger packages cost $10.35. That saves at least 50% compared with UPS's two-day service, the cost of which varies by weight and distance. Reprinted with permission. All Contents © 2010 The Kiplinger Washington Editors. www.kiplinger.com --------------------------
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of July 26 - July 30 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. July 26 | 10:00 | New Home Sales | Jun | 310K | | 300K | Moderate | | Tue. July 27 | 10:00 | Consumer Confidence | Jul | 51.5 | | 52.9 | Moderate | | Wed. July 28 | 08:30 | Durable Goods Orders | Jun | 1.0% | | -0.6% | Moderate | | Wed. July 28 | 10:30 | Crude Inventories | 7/24 | NA | | 0.360M | Moderate | | Thu. July 29 | 02:00 | Beige Book | Jul | | | | Moderate | | Thu. July 29 | 08:30 | Jobless Claims (Initial) | 7/24 | 464K | | 464K | Moderate | | Fri. July 30 | 08:30 | Auto Sales | Q2 | 1.1% | | 1.1% | Moderate | | Fri. July 30 | 08:30 | Gross Domestic Product (GDP) | Q2 | 2.5% | | 2.7% | Moderate | | Fri. July 30 | 08:30 | Employment Cost Index (ECI) | Q2 | 0.5% | | 0.6% | HIGH | | Fri. July 30 | 09:45 | Chicago PMI | Jul | 56.5 | | 59.1 | HIGH | | Fri. July 30 | 10:00 | Consumer Sentiment Index (UoM) | Jul | 67.5 | | 66.5 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% 0 Point 15 Yr Fixed 4.250% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.500% 0 Point 5/1 Arm 4.250% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% 0 Point 5/1 ARM 3.375% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Jul 19, 2010 --- Vol. 8, Issue 29 |
Last Week in Review: Washington has done it again, passing major financial reform legislation. Find out what this will mean for our economy... and the great home loan rates we've been seeing. Forecast for the Week: A double dose of housing news is in store, and earnings season continues with reports from Goldman Sachs, Morgan Stanley, and more. View: The web is all a "twitter" these days. Find out what the big deal is, and how "tweeting" can help you or your business. |
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 | They say the only constant is change... And more change is coming, as the sweeping Financial Regulation Bill was passed by the Senate last week and will be signed by President Obama in short order to become law. So what does this change mean... and how will it impact home loan rates? Here's what you need to know. The Bill calls for a new consumer protection agency and prohibits Banks from taking risky bets. While those things are important, it's also important to realize that this legislation... over 2,000 pages worth... amazingly does nothing to address the core reasons for the financial collapse. Fannie Mae and Freddie Mac are completely left out of this legislation. The credit rating agencies, who may have played the largest role in the financial collapse, also go unmentioned. In fact, when former Fed Chairman Alan Greenspan was asked about the Financial Regulation Bill, he noted that this was the first time the Fed was not asked to write a regulation of this kind. He also said that there are "unintended consequences" in every page of this bill. And one consequence we've seen already is that corporations are hoarding cash, and are somewhat stuck like a deer in the headlights due to the uncertainty that this and other pending legislation is creating. And when corporations hoard cash, they don't typically hire workers, and job creation is crucial to our recovery. |
What all this will mean for our economy and home loan rates remains to be seen... which is why now is the perfect time to act, while home loan rates continue to be some of the best they have ever been! If you or anyone you know would like to learn more about this exceptional opportunity, please don't hesitate to call or email. Or forward this newsletter on to anyone you think may benefit and I'd be happy to talk to them free of charge. In other news, there hasn't been much change on the inflation front, which is good news for Bonds and home loan rates. Remember: inflation erodes the return of an asset like a Bond... so inflation is the arch enemy of Bonds and home loan rates. Both the Producer Price Index - which measures inflation at the wholesale level - and the Consumer Price Index for June showed that inflation continues to remain tame. However, two changes that would be welcome are in the retail sales and manufacturing areas. Retail Sales for June came in lower than expected for the second month in a row. Although details of the report were mixed, the overall indication is that consumers and businesses remain cautious on purchasing big-ticket items. In addition, the Empire State Manufacturing Index and Philly Fed Index showed that factories and manufacturing still look very sluggish overall. Changes for the better in both of these areas will be reflective of our economy growing stronger, and these are things to watch for moving forward. All in all, the news from last week helped Bonds and home loan rates reach record levels again, and they ended the week about .125 percent better than where they began. GROWING YOUR BUSINESS IS ALWAYS CHANGE IN THE RIGHT DIRECTION. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR AN ARTICLE FROM KIPLINGER.COM ON "TWEETING" YOUR WAY TO SUCCESS. |
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There's a double dose of housing news this week. Tuesday's Housing Starts and Building Permits Reports will give us an update on the health of the new construction sector of the housing market, while Thursday we will get a read on Existing Home Sales. Thursday also brings another Initial Jobless Claims Report, and any changes for the better in this area will be welcome! In fact, last week, the National Federation of Independent Businesses (NFIB) reported that its monthly "Small Business Optimism" index turned weaker in June. This is important to follow, because small businesses represent an important job creation engine - and the NFIB said the decrease was "a very disappointing outcome." In addition, earnings season continues this week and some reports to look for include IBM after the markets close Monday, Goldman Sachs before the markets open on Tuesday, and Coca Cola and Morgan Stanley before the markets open on Wednesday. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and rates ended the week on an improving trend though they were unable to improve beyond a tough ceiling reflective of their best levels. I'll be watching closely to see what happens this week. Chart: Fannie Mae 4.0% Mortgage Bond (Friday, July 16, 2010)  |
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"Tweets" Can Help Grow Your Business Twitter is spreading like wildfire and companies are using it to boost sales. By Michael Doan, Kiplinger.com You know Twitter - the social networking and microblogging service that allows people to keep in touch through "tweets" - short snippets of text sent to cell phones, BlackBerrys and PCs. Businesses are making use of the Web format for marketing, research and customer services. Computer maker Dell sends coupons to its Twitter users. Whole Foods Market offers $25 gift cards as prizes for people who submit the catchiest messages promoting Whole Foods. Other companies send messages to foster community and build loyalty to stores and products. Uncle Sam is a player, too. The Food and Drug Administration uses Twitter to help get out the word about product recalls. Because most Twitter messages are searchable on the Web, businesses can also use it to track customer comments and answer complaints - even offer immediate help or advice. Among firms closely tuned in to what customers are saying are Southwest Airlines, JetBlue, Comcast and Boingo, which provides Wi-Fi service at airports. Jeremy Pepper, public relations manager of Boingo, receives and tracks all Twitter messages, blogs and other Web comments that mention the company. If, for example, someone complains to a friend about a weak Wi-Fi signal at Washington Dulles International Airport, he may get an immediate message from Pepper. In such a case, Pepper says he'll ask: "'Where you are sitting...have you thought of moving? Which terminal are you in? Let me check to see if there are problems at the airport,'" he says. Once a problem is resolved, he'll send a tweet saying he was happy to help and "have a safe flight." Quick, helpful responses via Twitter can go a long way to changing customers' opinions about a firm, even turning detractors into company promoters. Keep messages informal and conversational. "Being boring is the worst thing you can do," says Jeffrey Mann, vice president of research at Gartner Group, an information technology research firm. Business tweets should be personalized; you may want to designate one or more employees to twitter on behalf of the company. Keep in mind that Twitter messages - limited to 140 characters each - are seen by people who choose to become "followers" of a business or an individual. Twitter is a good tool to use at trade shows, helping to draw attendees to exhibitors' booths as well as press conferences and receptions hosted by a company or trade group. The Oklahoma City Chamber of Commerce, for example, puts out messages about its Schmooza Palooza networking party and trade show before, during and after the event in hopes of spreading buzz about it. Results are good; attendance has grown dramatically. Twitter is great for small businesses, too, because it's easy and doesn't add any expense. The only cost is the employee time it takes to write and follow others' messages. Consider registering your company's name with Twitter, even if you don't expect to use it. It'll help prevent misuse by someone else. Go to www.twitter.com. Reprinted with permission. All Contents ©2010 The Kiplinger Washington Editors. www.kiplinger.com. Economic Calendar for the Week of July 19-23, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for July 19-23, 2010 Economic Calendar for the Week of July 19 - July 23 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. July 20 | 08:30 | Building Permits | Jun | 575K | | 574K | Moderate | | Tue. July 20 | 08:30 | Housing Starts | Jun | 570K | | 593K | Moderate | | Wed. July 21 | 10:30 | Crude Inventories | 7/17 | NA | | -5.06M | Moderate | | Thu. July 22 | 08:30 | Jobless Claims (Initial) | 7/17 | 445K | | 429K | Moderate | | Thu. July 22 | 10:00 | Existing Home Sales | Jun | 5.04M | | 5.66M | Moderate | | Thu. July 22 | 10:00 | Index of Leading Econ Ind (LEI) | Jun | -0.4% | | 0.4% | Low |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% 0 Point 15 Yr Fixed 4.125% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 4.250% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% 0 Point 5/1 ARM 3.625% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. This is an unsecured email service which is not intended for sending confidential or sensitive information. Please do not include your social security number, account number, or any other personal or financial information in the content of the email. This may be a promotional email. To discontinue receiving promotional emails from Wells Fargo Bank N.A., including Wells Fargo Home Mortgage, click here NoEmailRequest@wellsfargo.com. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. All rights reserved. Equal Housing Lender. Wells Fargo Home Mortgage-2701 Wells Fargo Way-Minneapolis, MN 55467-8000 |
| For the week of Jul 05, 2010 --- Vol. 8, Issue 27 |
Independence Day I hope you and your family enjoyed the Independence Day holiday weekend. And, I sincerely hope you have been enjoying your complimentary subscription to the MORTGAGE MARKET GUIDE WEEKLY. Due to the July 4th holiday, the next full issue will arrive on Monday, July 12. In the meantime, check out the article below about protecting yourself and your family from the sun as you celebrate the summer. |
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Protecting Yourself from the Sun Walk along a beach or spend a day at the pool and it will quickly become evident that a "golden tan" is often considered an outward indicator of one's overall health or fitness. Medically speaking, though, these are very dangerous sentiments - especially when you consider the potential ramifications of unprotected exposure to the sun. THE FACTS? According to the CDC, exposure to ultraviolet (UV) rays is the biggest factor in developing skin cancer. And, cases of skin cancer have increased at a rate of roughly 3% every year, making it the most common type of cancer in the United States. Malignant melanoma, the most serious form of skin cancer, is also the most common type of cancer for women between the ages of 25 and 29. Even though it is curable if caught early, when left unattended it can spread to other organs, most commonly the lungs and the liver. THE FIX? The very best thing you can do to protect yourself from the sun is to avoid intentional sunbathing altogether. However, for those who work in the sun, enjoy outdoor sports, or insist on obtaining a tan, there are a few things you can do to help your cause. First, invest in a quality sunscreen. The best brands contain a UVA blocking ingredient known as avobenzone or Parsol 1789. Look for products with an SPF of at least 15 for the body, and 30 for the face. The bottom line is the more SPF the better, especially for fairer-skinned people. Apply sunscreen 20-30 minutes before any activity in the sun - allowing time for absorption - and reapply it every two hours or more frequently if you are swimming or partaking in strenuous activities. Make sure you wear sunglasses with UV protection, since the rays have been linked to everything from cataracts to skin cancer of the eyelids. Hats and protective summer-weight clothing are also a must. For headwear, a wide-brimmed hat works much better than a baseball hat. Also, make sure you take breaks (especially during mid-day) out of the sun. Seeking refuge in the shade for 5 to 10 minutes every hour helps maintain skin temperature. Finally, do NOT bring an infant into the sun. Infants under six months are NOT supposed to wear sunscreen at all, which means they are even more susceptible to sun damage. FINAL THOUGHTS ON SKIN? It is believed that roughly 80% of skin change associated with aging is actually due to sun exposure. To help protect your skin, practice the tips above. In addition, perform regular self-checks for abnormal moles and freckles – and see a doctor at least once a year so he or she can do the same. For more information, visit www.skincancer.org or www.cdc.gov/cancer/skin.
Economic Calendar for the Week of July 05 - July 09 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. July 06 | 10:00 | ISM Services Index | Jun | 55.5 | | 55.4 | Moderate | | Wed. July 07 | 10:30 | Crude Inventories | 7/3 | NA | | -1.90M | Moderate | | Thu. July 08 | 08:30 | Jobless Claims (Initial) | 7/3 | NA | | 472K | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.625% 1 Point 15 Yr Fixed 4.000% 1 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 4.250% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.750% 1/4 Point 5/1 ARM 3.375% 1/2 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Jun 28, 2010 --- Vol. 8, Issue 26 |
Last Week in Review: Washington was at it again, with big news from both Congress and the Fed. Learn what this means for you...and for home loan rates! Forecast for the Week: Two juicy economic reports bookend the week, bringing highly anticipated news on inflation and the labor market. View: Hitting the road for July 4th? Want to avoid a speeding ticket? Read on below. |
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What happens in Washington doesn't stay in Washington! And there was a lot happening in Washington this past week, between the Fed’s two-day meeting and actions in Congress. So how will all of these happenings impact you…and home loan rates, which are near all-time lows? Read on for details. Last week, the Fed decided to keep the Fed Funds Rate at 0.25%, and also reiterated in its Policy Statement that economic conditions warrant keeping the Fed Funds Rate low for an “extended period”. First, what is the Fed Funds Rate? It is the lending rate banks charge each other for the use of overnight funds, and it is used as a base rate that many other lending rates are based on, for consumer and business loans. And second, why is the “extended period” language significant? The Fed has to time very carefully any action – or even hints of action – on raising the Fed Funds Rate, which they have held at the lowest levels in history for the last year and a half. If the Fed raises the Fed Funds Rate too soon, it could slow economic activity and cause a "double dip" recession. However, if the Fed waits too long to raise the Fed Funds Rate, inflation could result. Remember, inflation is the arch enemy of Bonds and home loan rates...and signs of inflation could definitely cause home loan rates to worsen from their current low levels. Even though there have been more concerns expressed by various Fed members about inflation and the long term effects of keeping the Fed Funds Rate too low for too long, the economic data recently reported (such as the weak Jobs Report and other reports showing inflation is tame at present) as well as the ongoing issues in Europe helped the “extended period” language to survive through another Fed meeting. This is an important issue to keep watch on.  Congress was just as busy as the Fed last week. On Thursday, the Financial Reform Bill was finally reconciled between the House and Senate. The final draft includes a Consumer Financial Protection Agency, which will have the authority to police banks for mortgage lending and credit-card abuses. The bill will move to the President for his signature once both houses of Congress approve the final version. However, Congress did not pass the extension of the Home Buyer Tax Credit. Note: This extension was only going to be for people who were under contract by the initial April 30th deadline, extending their June 30th closing deadline to September 30th. The extension was part of the larger Jobs Bill, which included State aid and an extension of unemployment benefits for people out of work more than six months – and would have added $33B to the deficit. Meanwhile, the National Association of Realtors is saying that up to 30% of homes that went under contract by the April 30th deadline of the Homebuyer Tax Credit will likely not close by the current June 30th deadline. There was other housing news last week, as both New Home Sales and Existing Home Sales were well below expectations. While a decline in sales was expected after people were racing to qualify for the April 30th Tax Credit deadline, the numbers are still a bit of a disappointment. However – home prices remain affordable, and home loan rates are far from disappointing at the moment...last week they reached all time low levels! If you or anyone you know would like to learn more about this exceptional opportunity, please don’t hesitate to call or email. Or forward this newsletter on to anyone you think may benefit and I’d be happy to consult with them free of charge. The FASTEST WAY TO TAKE THE FUN OUT OF ANY ROADTRIP IS TO COME HOME WITH A SPEEDING TICKET. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW TO LEARN MORE ABOUT AVOIDING SPEED TRAPS. |
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There will be plenty happening this week, ahead of the Independence Day holiday. The week may start with a bang, as Monday’s Personal Income and Personal Spending Reports arrive, giving us a look at the Core Personal Consumption Expenditure (PCE) Index as well...which just happens to be the Fed's favorite gauge of inflation. Rest assured the Fed will be watching this report very closely. Any hint that inflation is heating up could definitely impact the Fed’s decision on rates and the “extended period” language at future Fed meetings. Thursday brings another Initial Jobless Claims Report. Initial Jobless Claims came in at 457,000 last week and Continuing Claims at 4.55 Million. In addition, an additional 4.73M people are claiming EUC (Emergency Unemployment Compensation) benefits. The continuing high level of unemployment claims is disturbing, but things will improve. Remember, job losses come in the thousands as companies endure sweeping layoffs, but individuals are hired back one at a time. And remember – since the Jobs Bill has not been passed, more people will start to drop off extended unemployment benefits – and rejoin the workforce as formally unemployed. And there could be some real fireworks on Friday, as the Labor Department releases the Jobs Report for June. Last month’s Jobs Report showed 431,000 jobs created in May. While on the surface this seems positive, the number was below expectations and also was primarily made up of temporary census workers…who will once again join the ranks of the unemployed when the 2010 Census has been completed. The Unemployment Rate did drop from 9.9% to 9.7%, but overall May’s Jobs Report was disappointing. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, home loan rates hit record low levels last week. I’ll be watching closely to see if this trend continues. Chart: Fannie Mae 4.0% Mortgage Bond (Friday, June 25, 2010)  |
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A Safe and Ticket-Free Fourth! In just a few short days, drivers across the country will hit the road to celebrate the Fourth of July with friends and family. If you’re heading down the road this coming weekend, remember that it’s never a good idea to speed – both for safety and financial reasons. After all, an accident or ticket can ruin your holiday weekend. So make sure you have plenty of time and that you plan the most effective route. And...you may even want to take a minute to find out if there are any speed traps on your route that you should know about. Thanks to the website speedtrap.org, you can easily read about speed traps in communities across the country. Simply visit speedtrap.org and click on the state and then the cities that you’ll be driving through. You can even add a speed trap you know about, so others can benefit from your knowledge. Whether you’re traveling a few miles or a few hundred, have a safe and ticket-free Fourth of July!
Economic Calendar for the Week of June 28 - July 02 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. June 28 | 08:30 | Personal Income | May | 0.5% | | 0.4% | Moderate | | Mon. June 28 | 08:30 | Personal Spending | May | 0.1% | | 0.0% | Moderate | | Mon. June 28 | 08:30 | Personal Consumption Expenditures and Core PCE | May | 0.1% | | 0.1% | HIGH | | Mon. June 28 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 1.2% | HIGH | | Tue. June 29 | 10:00 | Consumer Confidence | Jun | 62.0 | | 63.3 | Moderate | | Wed. June 30 | 10:30 | Crude Inventories | 6/26 | NA | | 2.02M | Moderate | | Wed. June 30 | 09:45 | Chicago PMI | Jun | 59.5 | | 59.7 | HIGH | | Wed. June 30 | 08:15 | ADP National Employment Report | Jun | 61K | | 55K | HIGH | | Thu. July 01 | 08:30 | Jobless Claims (Initial) | 6/26 | 458K | | 457K | Moderate | | Thu. July 01 | 10:00 | ISM Index | Jun | 59.0 | | 59.7 | HIGH | | Thu. July 01 | 10:00 | Pending Home Sales | May | -10.5% | | 6.0% | Moderate | | Fri. July 02 | 01:00 | Non-farm Payrolls | Jun | -100K | | 431K | HIGH | | Fri. July 02 | 01:00 | Unemployment Rate | Jun | 9.8% | | 9.7% | HIGH | | Fri. July 02 | 01:00 | Hourly Earnings | Jun | 0.1% | | 0.3% | HIGH | | Fri. July 02 | 01:00 | Average Work Week | Jun | 34.2 | | 34.2 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% 0 Point 15 Yr Fixed 4.250% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 4.375% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% 0 Point 5/1 ARM 3.500% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Jun 21, 2010 --- Vol. 8, Issue 25 |
Last Week in Review: Don't be fooled by today's low rates... Forecast for the Week: More housing news - plus, why the Fed's upcoming meeting is so important. Weekly View: Kids and credit cards - what do you need to know? |
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"NOBODY CAN GO BACK AND START A NEW BEGINNING...BUT ANYONE CAN START TODAY AND MAKE A NEW ENDING." Those words by the poet Maria Robinson should hold a special meaning - and warning - for anyone thinking about buying a home or refinancing, especially in light of the article by Former Fed Chairman Alan Greenspan which hit the wires last week. In his Wall Street Journal op-ed piece, Mr. Greenspan stated: "Don't be fooled by today's low rates. The government could very quickly discover the limits of its borrowing capacity." He also added that the present low inflation and low long-term rate environment has fostered a "sense of complacency (within the government) that can have dire consequences." What Mr. Greenspan is saying is that the government, rather than cutting budget deficits and showing fiscal restraint is taking advantage of this low rate and low inflation environment to accumulate more debt - and the consequences can be very bad...just look at Greece. Mr. Greenspan also said Treasury yields could spike, and in a hurry... Greenspan said, "Long-term rate increases can emerge with unexpected suddenness. Between early October 1979 and late February 1980, for example, the yield on the 10-year note rose almost four percentage points." Mr. Greenspan's sobering comments should not be taken lightly. The fact is, there are no fundamental reasons why rates - including home loan rates - should be as low as they presently are. The confluence of factors all coming together at the same time have made for an incredible low rate opportunity, but it won't last long and can change very quickly. And, like Maria Robinson's words of wisdom, once rates begin to change, there's no way to go back to take advantage of them. The time for that is today! Contact me today to discuss your unique situation. -----------------------
Former Fed Chairman Greenspan Warns "Don't Be Fooled by Today's Low Rates"  In one of the bright spots of news last week, the Senate approved an extension of the Homebuyer Tax Credit's closing deadline...but it's not law just yet. The original deadline to take advantage of the Tax Credit called for buyers to be under contract by April 30th and to close by June 30th. If voted into law, the extension would give those buyers until September 30th to close. However, this Tax Credit provision is part of a jobs and tax package that both chambers must still vote on before it becomes law. And remember, the extension would only apply to buyers who were under contract by April 30th. Even if you don't qualify for the Tax Credit, there are still some great opportunities available today, since rates are still at unbelievable lows right now. But heed Greenspan's words...these opportunities may not last long, so contact me today to see how you can benefit from them before it's too late. SPEAKING OF GREENSPAN'S COMMENT ABOUT THE GOVERNMENT ACCUMULATING DEBT, THEY AREN'T THE ONLY ONE IN THAT POSITION. ACCORDING TO A RECENT STUDY, THE AVERAGE BALANCE OF COLLEGE STUDENT CREDIT CARDS CLIMBED TO $3,173. FOR INFORMATION ABOUT KIDS AND CREDIT CARDS, CHECK OUT THE SPECIAL MORTGAGE MARKET GUIDE VIDEO VIEW BELOW. |
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This week, we'll see a bit lighter load of economic reports, but with some heavy news items coming down the wire. We'll start off with a dose of housing news, with reports on Existing Home Sales on Tuesday and New Home Sales on Wednesday. These reports come after last week's worse-than-expected reports on Housing Starts and Building Permits in May. Those disappointing reports may be good for the housing industry in the long run, however, since reduced inventory may help sales of the homes that are already on the market. On Wednesday the Fed will release their rate decision and Policy Statement at the conclusion of their Federal Open Market Committee meeting. There is speculation that the Fed may lower their 2010 and 2011 growth targets for GDP...and lowering the target may give the Fed enough ammunition amongst its members to maintain their "extended period" language, although the concerns amongst Fed members about this language staying in place has been on the rise. In any case, it is all making for a very interesting and important Fed Meeting next week, as it could have an important bearing on the direction of rates. We'll also see news on the production and consumption of goods and services this week, beginning with Durable Goods Orders on Thursday and followed by the Gross Domestic Product on Friday. In employment news, we'll get another weekly read on Initial Jobless Claims on Thursday. Last week, Initial Jobless Claims rose by 12,000 in the latest week to 472,000 and above the 450,000 that was expected, signaling that the job market remains weak. Finally, we'll see how consumers feel about the economy in the Consumer Sentiment Index on Friday. In addition to those reports, the Treasury Department will auction $108 Billion in 2-, 5- and 7-Year Treasury Notes. This seemingly endless supply of Treasury auctions is one reason why Mr. Greenspan expressed concern about a spike higher in yields. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates ended the week slightly better than when they began... but Bond prices have stalled out near historic high levels, with home loan rates near historic low levels. Again - do not wait to get in touch with me to see if the current rate climate might benefit you or someone you know. -----------------------
Chart: Fannie Mae 4.0% Mortgage Bond (Friday, June 18, 2010)  |
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Kids and Credit Cards
// | Using credit cards wisely is important for people of all ages, especially for young people just starting out. In fact, a 2009 study by student loan provider Sallie Mae found that 84% of college undergraduates had at least one credit card and half of college students had four or more cards. What's more, the average (mean) balance grew to $3,173, which was higher than the findings in previous studies. Check out this video from Kiplinger.com for some important information to consider about kids and credit cards. |
Economic Calendar for the Week of June 21 - June 25 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. June 22 | 10:00 | Existing Home Sales | May | 6.10M | | 5.77M | Moderate | | Wed. June 23 | 10:00 | New Home Sales | May | 480K | | 504K | Moderate | | Wed. June 23 | 10:30 | Crude Inventories | 6/19 | NA | | 1.69M | Moderate | | Wed. June 23 | 02:15 | FOMC Meeting | 6/23 | .25% | | .25% | HIGH | | Thu. June 24 | 08:30 | Durable Goods Orders | May | -1.4% | | 2.8% | Moderate | | Thu. June 24 | 08:30 | Jobless Claims (Initial) | 6/19 | NA | | 472K | Moderate | | Fri. June 25 | 08:30 | Gross Domestic Product (GDP) | Q1 | 3.0 | | 3.0 | Moderate | | Fri. June 25 | 08:30 | Chain Deflator | Q1 | 1.1% | | 1.0% | Moderate | | Fri. June 25 | 10:00 | Consumer Sentiment Index (UoM) | June | 75.3 | | 75.5 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% 0 Point 15 Yr Fixed 4.375% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 4.750% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% 0 Point 5/1 ARM 3.625% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of May 24, 2010 --- Vol. 8, Issue 21 |
Last Week in Review: Stock market teeters on the verge of becoming either a correction...or an "official" Bear market. Forecast for the Week: A fully loaded plate of economic news is in store, including reads on housing and consumer attitudes. View: How you can "insure" a smart and safe vacation this summer. |
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IT'S A SHOWDOWN...THE BULLS VS. THE BEARS. But we're not talking about the Chicago Bulls who were recently knocked out of the NBA playoffs. We're talking about the Bull Market that Stocks have enjoyed over the past months...that is now slipping back lower. So why are these animal terms used to describe action in the Stock market anyways? The terms "Bull" and "Bear" are used because of the way those animals attack. Bulls attack using an upward thrusting motion with their horns, and Bears attack by moving their powerful claws in a downward motion. So an upward market is termed a Bull market, while a downward market is called a Bear market. Last week, Stocks saw a sharp thrust downward, with prices down more than 10% from their peak. But that doesn't mean it's a Bear market just yet. Instead, the drop can be seen as a "correction", if prices recover and resume their uptrend. A correction can be quite healthy, and help a Bull market sustain its strength. But here's the trick: if the market drops 20% from its peak, it's officially considered a Bear market. That means every Bear market was once potentially just a correction. And so the debate rages on. Is this a good time to buy - because you believe it's a correction and prices will move much higher? Or is this a time to sell, before the correction turns into a Bear market? The answer should become clearer over the next few days, as the market's direction takes hold. Waiting in the wings are Bond prices and home loan rates... A Bear market could help Bond prices and home loan rates improve a bit more, as some of the money from Stock sales finds its way into the Bond market, including Mortgage Bonds. On the other hand, a correction back to a Bull market will be at the expense of some of the recent improvements that Bonds and home loan rates have enjoyed. The reality is, Mortgage Bonds have looked a lot like a lottery winner recently, since Bond prices really should be much lower, and home loan rates much higher. But Mortgage Bonds are catching every lucky break - from the situation in Greece...to the declining Euro...to the correction in the Stock market. It's all going in the favor of Mortgage Bonds...for now. But the Bond market's good fortune may not last very long - so be sure to give me a call if I can help explain the current rate situation, and how it might benefit you. -----------------------
BULL MARKETS THRUST UPWARD...WHILE BEAR MARKETS SWIPE DOWNWARD  Despite the sharp sell-off in Stocks, the markets did receive some good news last week on the inflation front. The Producer Price Index (PPI) was reported lower than expectations for the month of April, and the more closely followed Consumer Price Index (CPI) fell to report the first month-over-month decline since March of 2009. And when volatile food and energy prices were removed from the equation, the annual Core index came in at its lowest level since January 1966. Those numbers appear to show that inflation is subdued - and with oil prices significantly lower from where they were a few weeks ago, there will even be more downward pressure on headline inflation in the next report. But the reality is that inflation will eventually begin to rear its ugly head - and once that happens, inflation can accelerate rather quickly. China recently reported a spike in inflation - and last week, the UK saw surprisingly higher inflation numbers being reported as well. So the Fed - and the markets - will have to continue to keep close tabs on inflation in the US. WHILE YOU CAN'T CONTROL IF THE BULLS OR BEARS WILL WIN THE NEXT ROUND IN THE MARKETS...THERE ARE SOME THINGS YOU CAN CONTROL. FOR EXAMPLE, CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW FOR TIPS ON "INSURING" A SMART AND SAFE VACATION THIS COMING SUMMER. |
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There's a very full load of economic reports on tap this week, including fresh news on the health of the housing industry. After last week's reports on Housing Starts and Building Permits in April, we'll see reports on Existing Home Sales right away Monday morning and New Home Sales on Wednesday. We'll also discover how consumers feel about the economy with a report on Consumer Confidence on Tuesday, followed by the Consumer Sentiment Index on Friday. Both reports have risen lately, indicating that consumers feel better about the present and future economic conditions. The markets will be watching to see if that trend continues in this week's reports. The manufacturing sector of the economy will also be in the spotlight this week. Wednesday brings the Durable Goods Orders report, which measures new orders placed and is considered a leading indicator of manufacturing activity. That report will be followed by the Chicago PMI on Friday. This report surveys more than 200 Chicago purchasing managers about the manufacturing industry and is a good indicator of overall economic activity. And if that wasn't enough, we'll also see more inflation news this week. First, the Gross Domestic Product (GDP) and GDP Chain Deflator for the first quarter will be released on Thursday. The Chain Deflator is a key inflation measure included in the GDP Report. And since inflation is the archenemy of Bonds and home loan rates, this report could be a market mover. Unlike the Consumer Price Index that was released last week, the Chain Deflator has the advantage of not being a fixed basket of goods and services, so changes in consumption patterns or the introduction of new goods and services will be reflected in the Chain Deflator. Then, one day after the Chain Deflator comes out, we'll see the Personal Consumption Expenditures report on Friday. This report measures price changes in consumer goods and services, and is considered the Fed's favorite gauge on inflation. After last week's better-than-expected inflation news, the markets will definitely be watching these reports. Rounding out the week, we'll also see reports on Personal Income and Personal Spending this Friday. But that's not all...in addition to all those reports, the government will auction off $42 Billion of 2-years on Tuesday, $40 Billion of 5-years on Wednesday, and $31 Billion of 7-years on Thursday. These auctions may move the markets depending on how they are received. Oh, not to mention that the news coming out of Europe may once again add to the market's volatility here at home. That's a very full helping of potentially market moving activity. But you can count on me to be here and watching very closely. And remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Mortgage Bonds have improved over the last few weeks, as Stocks have undergone their move lower. I'll be watching closely to see if Bonds...and home loan rates...can continue to improve in the week ahead. -----------------------
Chart: Fannie Mae 4.5% Mortgage Bond (Friday, May 21, 2010)  |
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"Insuring" a Smart and Safe Vacation Summer is right around the corner, and that means many people are starting to plan some kind of summer getaway. When planning your fun-filled itinerary, the last thing you want to do is worry about any financial loss that might occur as a result of a missed flight, an injury or illness, lost baggage, or any other unforeseen incident. To ensure your peace of mind while away from home, many companies provide several different types of traveler's protection plans to help ease the burden. Without insurance, a traveler can lose nonrefundable deposits and prepayments that can add up to hundreds, or even thousands, of dollars. A good, comprehensive travel insurance plan will often reimburse a traveler for all pre-paid, nonrefundable expenses for a covered loss. Here are some general types of coverage you may want to consider before heading out for this summer's vacation: Travel Arrangement Protection - This covers you in case of trip cancellation, interruption, or travel delays (these can include inclement weather, lost or stolen passports, quarantine, hijacking or natural disaster). Medical Protection - Just because you have health insurance at home, the moment you set foot on foreign soil or even set sail on a cruise, many health plans are considered null and void, so be sure you get travel medical protection to cover emergency medical expenses, such as illness and accident expenses, and emergency medical transportation to the nearest medical facility. Baggage Protection - Not only do you want coverage for lost, stolen or damaged baggage, but many plans offer reimbursement for the purchase of essential items if baggage is delayed. Worldwide Emergency Assistance - If traveling outside of the country, make sure you purchase a policy that covers international emergencies. This can include emergency cash transfer assistance, legal assistance, and lost travel documents assistance. The cost of travel insurance is based, in most cases, on the value of the trip and the age of the traveler. Typically, the cost is 5-7 percent of the trip cost. Like most every other type of insurance, be it automobile, medical, or homeowner's, you hope you never need to use it. But it can be a relief to have it when you do need it. The bottom line is: Before embarking on your next trip, do your homework! Talk to your insurance agent - or call me for a recommendation - and learn more about all the different insurance options available to you, so you can make the best choice for your peace of mind!
Economic Calendar for the Week of May 24 - May 28 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. May 24 | 10:00 | Existing Home Sales | Apr | 5.6M | | 5.4M | Moderate | | Tue. May 25 | 10:00 | Consumer Confidence | May | 58.5 | | 57.9 | Moderate | | Wed. May 26 | 08:30 | Durable Goods Orders | Apr | 0.9% | | -0.3% | Moderate | | Wed. May 26 | 10:00 | New Home Sales | Apr | 420K | | 411K | Moderate | | Wed. May 26 | 10:30 | Crude Inventories | 5/22 | NA | | 0.162M | Moderate | | Thu. May 27 | 08:30 | Jobless Claims (Initial) | 5/22 | NA | | NA | Moderate | | Thu. May 27 | 08:30 | Chain Deflator | Q1 | 0.9% | | 0.9% | Moderate | | Thu. May 27 | 08:30 | Gross Domestic Product (GDP) | Q1 | 3.3% | | 3.2% | Moderate | | Fri. May 28 | 09:45 | Chicago PMI | May | 62.1 | | 63.8 | HIGH | | Fri. May 28 | 10:00 | Consumer Sentiment Index (UoM) | May | 73.3 | | 73.2 | Moderate | | Fri. May 28 | 08:30 | Personal Income | Apr | 0.5% | | 0.3% | Moderate | | Fri. May 28 | 08:30 | Personal Spending | Apr | 0.3% | | 0.6% | Moderate | | Fri. May 28 | 08:30 | Personal Consumption Expenditures and Core PCE | Apr | NA | | 0.1% | HIGH | | Fri. May 28 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 1.3% | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 0 Point 15 Yr Fixed 4.375% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 4.875% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 0 Point 5/1 ARM 3.750% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of May 10, 2010 --- Vol. 8, Issue 19 |
Last Week in Review: Markets experienced huge swings in wild rollercoaster ride. Forecast for the Week: This week will bring reports on trade, consumer sentiment and retail sales, and market-moving Treasury Auctions - all against a backdrop of continued uncertainty in Europe. View: Saving and spending wisely with budgets that make sense. |
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"You bring me up and down!" While Janet Jackson was singing about love and relationships, investors around the world could surely relate during last week's push and pull of wildly erratic markets. And we could be set up for an encore performance in the week ahead as anxiety persists in the European financial system. The drama began on Monday when news of a pending bailout package for Greece sent Bonds lower, as investors pulled out of this "safe haven" and started looking toward stocks. The very next day Stocks were back down, and Bonds were pushed up and out of their trading range, as 40,000 Greeks took to the streets to protest details of the bailout plan. Capping off the week of volatility was Thursday afternoon's Stock Market freefall scare, during which the Dow plummeted 998 points then recouped more than 600 points - all in the span of 15 minutes. Thursday's mysterious event, characterized as a "near-panic", may have been caused in part by a wave of electronically submitted sell orders being executed at a mind-boggling pace. Remember, a majority of trading in the markets is done by computer. With Stock prices down significantly, many computer triggers for sell orders were hit. These triggers began executing sell orders at "market price." With the enormous flood of market sell orders coming in, bidders pulled back, so there were very few bids to satisfy the sell orders. In such situations, the computer will keep seeking out the next available bidder in an effort to fill the order...no matter how low that bid is. One extreme example was the trading of Accenture (NYSE: ACN) stock, which went from $40 down to $0.14 (yes, 14 cents), then came all the way back to close at $41.09. The Bond market, which generally has an inverse relationship to Stocks, responded to these tug-of-war pressures and events with exaggerated ups and downs, as seen in this week's bond chart below. This kind of tug-of-war makes the market very volatile - and underscores why it is more important than ever to work with a true mortgage professional who understands the market. Counteracting some of the international angst last week was some positive domestic data and increasing sentiment that the US economy is improving. -----------------------
The Stock market's erratic behavior frustrated traders and investors last week.  In the end, strong domestic economic data, like Friday's better than expected official Jobs Report, was overshadowed by the drama in Europe and received less fanfare than it deserved. According to the Labor Department, 290,000 jobs were created in April, well ahead of estimates for 187,000 new job creations. The increase was the biggest rise since March 2006. Overall, non-farm payroll employment has expanded by 573,000 since December, with the vast majority of the growth occurring during the last two months. Despite the job growth, the Unemployment Rate ticked up from 9.7% to 9.9%. The main reason was an increase in the labor force of 805,000. That's because unemployed individuals who do not look for a job for four weeks are removed from the labor force. When those people move back into job search mode, they are counted again - which can cause the Unemployment Rate to rise even when more jobs are being created. OVERALL, THE ECONOMY IS SHOWING SIGNS OF A RECOVERY. BUT IT'S STILL IMPORTANT TO SAVE, SPEND, AND BUDGET WISELY. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW TO LEARN MORE ABOUT BUDGETS THAT MAKE SENSE. |
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The markets will open on the heels of Friday's late night meeting of euro zone countries. There, leaders signed off on a support package for Greece, pledged to take steps to stem the spread of a "systemic" debt crisis and scheduled an emergency Sunday meeting of all 27 European Union finance ministers in hopes of quelling more turmoil on Monday. It will be interesting to see how emerging details of their plan to create a European stabilization mechanism will affect the markets in the days ahead. On the economic report front, this week will start out slowly. In fact, the first major economic report will be Wednesday's Balance of Trade reports on exports and imports. Remember, a negative balance of trade - or a deficit - occurs when imports surpass exports. Rising deficits can be reflective of increased consumption, which can be a sign of a strengthening economy. On Thursday, we will get another look at Initial Jobless Claims, which came in slightly above expectations last week but was still 7,000 lower than the previous week. The markets will be watching this report to see if the trend lower continues. The week caps off on Friday with a host of reports on Industrial Production, Capacity Utilization, Consumer Sentiment and the big report on April's Retail Sales. In addition to these reports, and the continuing European saga, this week's Treasury Department auctions may also affect the markets. The government will auction $38 Billion in 3-Year T-Notes on Tuesday, $24 Billion in 10-Years on Wednesday, and $16 Billion in 30-Year Bonds on Thursday. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Mortgage Bonds broke out of their trading range but the markets saw huge swings by the end of the week. -----------------------
Chart: Fannie Mae 4.5% Mortgage Bond (Friday, May 7, 2010)  |
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Spending and Saving Wisely
// Last week, it was reported that Personal Spending rose the most in five months, as the economy is starting to pull out of the recession. At the same time, however, the Personal Savings rate fell to 2.7%, the lowest level since September 2008. These numbers represent how individuals struggle to balance spending with saving. In the end, it's important for everyone to save, spend, and budget wisely. Check out this week's video from Kiplinger.com to learn "Why Budgets Make Sense." |
Economic Calendar for the Week of May 10 - May 14 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Wed. May 12 | 08:30 | Balance of Trade | Mar | -$40.0B | | -$39.7B | Moderate | | Wed. May 12 | 10:30 | Crude Inventories | 5/08 | NA | | 2.75M | Moderate | | Thu. May 13 | 08:30 | Jobless Claims (Initial) | 5/08 | 440K | | 444K | Moderate | | Fri. May 14 | 08:30 | Retail Sales | Apr | 0.2% | | 1.9% | HIGH | | Fri. May 14 | 08:30 | Retail Sales ex-auto | Apr | 0.5% | | 0.9% | HIGH | | Fri. May 14 | 09:15 | Capacity Utilization | Apr | 73.8% | | 73.2% | Moderate | | Fri. May 14 | 09:15 | Industrial Production | Apr | 0.6% | | 0.1% | Moderate | | Fri. May 14 | 10:00 | Consumer Sentiment Index (UoM) | May | 73.5 | | 72.2 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 15 Yr Fixed 4.625% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 5.250% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 5/1 ARM 3.750% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of May 03, 2010 --- Vol. 8, Issue 18 |
Last Week in Review: Little change came from the Fed's latest meeting. Find out what that means for home loan rates, and also why Greece is still the word! Forecast for the Week: Two juicy economic reports bookend the week, bringing highly anticipated news on inflation and the labor market. View: Learn more about Cinco de Mayo and its connection to the United States! |
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They say "the only constant is change...", yet last week's meeting of the Federal Open Market Committee ended without any major changes...no change to the Fed Funds Rate, and no change to the now-famous verbiage in their Policy Statement, stating that rates will remain low for an "extended period" of time. While the Fed does not control home loan rates, what does all this mean for those seeking home financing in the months ahead? Read on for details.  There are two important things to note about last week's Fed meeting. First, despite strong earnings, a stronger Stock market, and better consumer confidence and housing numbers, St. Louis Fed President Thomas Hoenig remains the lone dissenter to the verbiage in the Policy Statement on keeping rates low for an "extended period." He feels that there is a strong risk of inflation ahead...and that the Fed needs to prepare the markets for the eventual hikes that will be coming to the Fed Funds Rate. When the Fed does indeed change this language, it will signal that the Fed has a consensus on inflation being a threat...and since inflation is the arch-enemy of home loan rates, the change in verbiage will cause rates to move higher. In addition, the Fed made no mention in their Policy Statement about selling any of their Mortgage Backed Security (MBS) holdings - and the added supply coming into the market will also cause home loan rates to rise. That said, the Fed may have discussed the topic during the meeting, and it could come up when the Meeting Minutes are released. There is growing concern that if the Fed doesn't begin selling some of these MBS holdings by 2011 that additional asset bubbles may arise. It's likely that the Fed will look to sell a meaningful chunk by year end, and this will be yet another headwind for home loan rates during the coming year. If you want to see if you can benefit from the current low-rate environment before these items adversely impact home loan rates, please give me a call or send me an email...and as always, please feel free to pass along this newsletter to a friend, coworker or family member that might benefit. In other news, Consumer Confidence rose sharply in April, to its highest reading since September 2008. This number is important because the more confident that consumers feel...the more likely it is that they will help fuel the economy. Also, the Commerce Department's Gross Domestic Product Report indicated that the economy grew for the third straight quarter, despite the report coming in slightly below estimates. Inflation readings within the report remained tame, giving the Fed cover to keep interest rates low, with inflation appearing to be subdued. But inflation concerns can arise quickly, and although the Fed is not acting just now...we can be sure they are watching very carefully. Greece was still the word last week, as Standard & Poor's Bond rating agency downgraded the debt of Greece to "junk" status. The lack of confidence in Greece's ability to repay their debt has pushed yields on their 2-Year Notes up to a whopping 18% to try and incent investors - and by way of comparison, our own US 2-Year Notes are yielding just over 1%! This is why credit downgrades are such a concern, and why the warnings from Moody's about the US overspending must be taken very seriously. There has been much greater volatility in the Bond market lately, with large price swings in both directions. It's no coincidence that the volatility increased just after the Fed exited their buying program. While concerns about Greece have caused some investors to lose some confidence in European debt instruments, and move their holdings over to US securities, which are viewed as a safer bet, the situation is fluid and there's no telling how much and for how long Bonds and home loan rates will benefit from the situation. Overall - the mix of news and market activity benefitted Bonds and home loan rates last week, improving to better levels over the week prior. LIBERTY AND FREEDOM FOR ALL IS ALWAYS A CHANGE IN THE RIGHT DIRECTION! CHECK OUT THE MORTGAGE MARKET GUIDE VIEW TO LEARN ABOUT THE HISTORY OF "CINCO DE MAYO", BEING CELEBRATED THIS WEDNESDAY! |
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Two important reports bookend the week ahead, and hopefully both will show changes in a good economic direction. Monday's Personal Income and Personal Spending Reports will give us a look at the Core Personal Consumption Expenditure (PCE), which is the Fed's favorite gauge of inflation. Rest assured the Fed will be watching this report very closely, as it could impact their decisions on rates and Policy Statement verbiage, as we discussed. Thursday will bring another Initial Jobless Claims Report. At this stage in the economic recovery, the weekly Initial Jobless Claims readings we are seeing are still pretty high, which suggests that businesses are both reluctant to hire and are looking to trim overhead. And the big enchilada of employment news wraps up the week, as April's Jobs Report is due for delivery on Friday morning. Last month's report showed that 162,000 jobs were created in March, making it the biggest one-month increase in three years. Additionally, there were upward revisions to January and February, which brought the last two months' net job losses to near zero. But it's not time to break out the party hats just yet...last month's report also showed that the official Unemployment Rate remained steady at 9.7%, and when factoring in the "underemployed", including people who accepted part-time work because full-time work is simply not available, the rate of unemployment overall rose from 16.8% to 16.9%. This report will be very important to watch, as the labor market is key to our economic recovery. Remember this rule of thumb: Weak or negative economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong or positive economic news normally has the opposite result. As you can see in the chart below, the instability in Greece and the Fed's decision to keep rates low for an extended period of time gave Bonds a boost above a key technical level. But remember, volatility is the name of the game at the moment, and things can change quickly. I'll be watching closely to see in which direction Bonds and home loan rates move this week - and always welcome a call or email from you if I can help answer any questions! -----------------------
Chart: Fannie Mae 4.5% Mortgage Bond (Friday, April 30, 2010)  |
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Celebrating Cinco de Mayo...and Its Connection to the United States This Wednesday marks the celebration known as Cinco de Mayo, or "May 5th", in Spanish. Although many people have heard of this holiday - and even join in the celebrations with gusto - plenty of folks are not aware of what this holiday is all about. And most people don't realize that the event being commemorated may have actually played an important role in shaping the United States that we know today. Let's take a look at what this holiday is about, and have even more reason to celebrate Cinco de Mayo - as well as liberty and freedom - this Wednesday, May 5th. What Does Cinco de Mayo Commemorate? Many people believe that Cinco de Mayo is the day that recognizes Mexico's independence from Spain. To set the record straight, that conquest happened on September 15th, 1810. Cinco de Mayo, on the other hand, celebrates an event that took place over 50 years later. On May 5, 1862, the Mexican cavalry, under the command of Texas-born General Zaragosa, defeated the French at the battle at Puebla, a city 100 miles east of Mexico City. The French army, having not suffered a defeat in nearly 50 years, landed in the port of Vera Cruz and headed toward the capital city with a specific mission. Fearless of any opponent, the French sought to overthrow the capitol and gain control of Mexico, even bringing along a Hapsburg prince to oversee the would-be empire. So...What's the Connection to the United States? The goal of France's leader, Emperor Napoleon III, was to gain proximity to the US, in hopes of supplying the Confederate Army with support in their fight against the North...as he desired to sustain the division within America. To America's benefit, the undersized Mexican cavalry used their knowledge of the terrain to defeat the powerful French army. This victory enabled the Northern States to continue to build the greatest army in the world at that time. Fourteen months later, the North soundly defeated the Confederate Army in the battle at Gettysburg, thus ending the Civil War. Union troops were subsequently rushed to the Texas/Mexican border to help expel the French from Mexico. Cinco de Mayo is rightfully celebrated in both the US and Mexico - and it's a great occasion to honor freedom and liberty.
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of May 03 - May 07 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. May 03 | 08:30 | Personal Income | Mar | 0.3% | | 0.0% | Moderate | | Mon. May 03 | 08:30 | Personal Spending | Mar | 0.6% | | 0.3% | Moderate | | Mon. May 03 | 08:30 | Personal Consumption Expenditures and Core PCE | Mar | NA | | 0.0% | HIGH | | Mon. May 03 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 1.3% | HIGH | | Mon. May 03 | 10:00 | ISM Index | Apr | 60.0 | | 59.6 | HIGH | | Wed. May 05 | 10:00 | ISM Services Index | Apr | 56.1 | | 55.4 | Moderate | | Wed. May 05 | 08:15 | ADP National Employment Report | Apr | 30K | | -23K | Moderate | | Thu. May 06 | 08:30 | Jobless Claims (Initial) | 5/01 | 440K | | 448K | Moderate | | Thu. May 06 | 08:30 | Productivity | Q1 | 2.4% | | 6.9% | Moderate | | Fri. May 07 | 08:30 | Average Work Week | Apr | 34.0 | | 34.0 | HIGH | | Fri. May 07 | 08:30 | Hourly Earnings | Apr | 0.1% | | -0.1% | HIGH | | Fri. May 07 | 08:30 | Non-farm Payrolls | Apr | 187K | | 162K | HIGH | | Fri. May 07 | 08:30 | Unemployment Rate | Apr | 9.7% | | 9.7% | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 15 Yr Fixed 4.625% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 5.250% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 5/1 ARM 3.875% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Apr 26, 2010 --- Vol. 8, Issue 17 |
Last Week in Review: Greece's ongoing financial saga moves the markets, along with continuing announcements on more whopping amounts of debt supply being pumped out. Forecast for the Week: This week will bring a wide range of reports, including looks at consumer attitudes, the Fed's policy, employment, manufacturing, and Gross Domestic Product. View: There's less than one week left before the Homebuyers Tax Credit expires on April 30th...read the details, and pass on to anyone who needs to know more! |
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"IT'S ALL GREEK TO ME." The markets continue to be focused on - and influenced by - Greece's ongoing financial saga. Stocks took a hit last Thursday when Greece's budget deficit was reported to be worse than previously thought, causing uncertainty and anxiety in the markets. The next day, the saga continued when Greek Prime Minister George Papandreou asked the European Union and International Monetary Fund to activate their huge $45 Billion Euro aid package. That news helped relieve some of the uncertainty in the markets, but this story is far from over. Greece will need to take some dramatic measures to bring their budget deficit to a significantly lower level. The $45 Billion Euro bailout for Greece wasn't the only whopping figure in the news last week. Here at home, the U.S. Treasury Department announced that it will unload $129 Billion of debt this week in 5-year Treasury Inflation Protected Securities and 2-, 5- and 7-year Notes. The massive amount of debt supply being loaded into the markets just keeps on coming - and it's getting larger. As you can see from the chart below, the Treasury auctions have more than doubled since the 2nd quarter of 2008...and this doesn't even include the regularly scheduled T-Bill auctions each week or the monthly 30-year Bond auctions. This week's huge amount of supply could prevent Bond prices - and home loan rates - from improving when it hits the markets. -----------------------
Chart: Treasury Note Auctions (By Quarter)  Speaking of more supply...the Fed announced last week that it may start trimming its balance sheet by selling some of its Mortgage Backed Securities assets as early as the 3rd or 4th quarter of this year. Remember, the Fed recently ended its purchase program in which it purchased $1.25 Trillion in Mortgage Backed Securities to help lower home loan rates and stabilize the housing sector. Since the program ended, the market has been very volatile. Despite the fluctuations, rates remain good overall, but once the Fed starts to sell some of their huge holdings, rates will likely rise as even more supply comes into the market. Overall, rates ended the week slightly worse than where they started, but still at very attractive levels. That makes now a crucial time to take advantage of the opportunities that exist - including the Homebuyers Tax Credit, which is about to expire! THERE'S LESS THAN ONE WEEK LEFT BEFORE THE HOMEBUYERS TAX CREDIT EXPIRES ON APRIL 30! CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW FOR IMPORTANT DETAILS. |
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After a busy week of economic reports last week, this week doesn't slow up at all. On tap is a look at how consumers feel about the slowly recovering economy with the Consumer Confidence report on Tuesday and the Consumer Sentiment Index on Friday. In the prior reports, Consumer Confidence came in higher than expectations, while Consumer Sentiment dropped. The markets will be watching both these reports for indications of how consumers feel about the job market and their finances. We'll also hear from the Fed this week with the Fed's Monetary Policy and Fed Funds Rate decision on Wednesday. With future inflation concerns on the minds of some Fed members, it will be interesting to see if the Fed continues to use the now famous statement, "rates will stay exceptionally low for an extended period." The weekly Initial Jobless Claims report comes out Thursday, and after a worse-than-expected report last week, the markets will be tuned in closely to this week's update. Finally, the week ends on a busy note. Friday, we'll get a look at labor costs with the Employment Cost Index, the manufacturing industry with the Chicago PMI, and goods and services in the US with the Gross Domestic Product report. In addition to these reports, the Treasury Department will auction off the $129 Billion of debt mentioned above. That breaks down to auctions of $11 Billion in 5-year TIPS (treasury inflated-protected securities) on Monday, $44 Billion in 2-year Notes on Tuesday, $42 Billion in 5-year Notes on Wednesday and $32 Billion in 7-year Notes on Thursday. That's a whopping amount of supply, and it could move the markets depending on how it's received. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Mortgage Bonds have not been able to close above technical resistance at the 50-Day Moving Average since the end of March. -----------------------
Chart: Fannie Mae 4.5% Mortgage Bond (Friday, April 23, 2010) 
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Homebuyers Tax Credit Expires This Week!
Thousands of Dollars Could Slip Through Your Fingers! The heat is on for those who are out shopping for homes right now - as the Homebuyers Tax Credit is about to come to an end. Last November, the government expanded and extended the new Homebuyers Tax Credit. According to the program, first-time homebuyers are eligible for a tax credit of up to 10% of the purchase price of the home, with a maximum credit of $8,000. And current homeowners are eligible for up to $6,500. Although military personnel may qualify for a special extension, the vast majority of homeowners must have contracts in effect no later than April 30, 2010 and must close no later than June 30, 2010 to qualify for the credit. This means that homebuyers now have less than one week to get their paperwork going to qualify for this credit, before it goes away! Here are some important details about this tax credit. Dollar-for-Dollar Benefit The benefit of a tax credit is that it's a dollar-for-dollar benefit, rather than a "tax deduction" or reduction in tax liability that would only reduce $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer who qualified for the entire benefit were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing. Even Better... It's Refundable! Remember, because it's a tax credit, it's refundable! That means a homebuyer can receive a check for the credit if he or she has little or no income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000! What are the Income Caps? Single tax filers with incomes up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers with incomes of $145,000 and above are ineligible. Joint filers with incomes up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers with incomes of $245,000 and above are ineligible. What's the Maximum Purchase Price? Qualifying buyers may purchase a property with a maximum sales price of $800,000. If you or someone you know is in the process of purchasing a home, this is an important week to take action - feel free to forward this article to anyone who it might benefit. And give me a call with any questions - the clock is ticking and the deadline is Friday!!
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of April 26 - April 30 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. April 27 | 10:00 | Consumer Confidence | Apr | 53.7 | | 52.5 | Moderate | | Wed. April 28 | 10:30 | Crude Inventories | 4/24 | NA | | 1.89M | Moderate | | Wed. April 28 | 02:15 | FOMC Meeting | | 0.25% | | 0.25% | HIGH | | Thu. April 29 | 08:30 | Jobless Claims (Initial) | 4/24 | 440K | | 456K | Moderate | | Fri. April 30 | 08:30 | Gross Domestic Product (GDP) | Q1 | 3.2% | | 5.6% | Moderate | | Fri. April 30 | 08:30 | GDP Chain Deflator | Q1 | 0.9% | | 0.5% | Moderate | | Fri. April 30 | 08:30 | Employment Cost Index (ECI) | Q1 | 0.5% | | 0.5% | Moderate | | Fri. April 30 | 09:45 | Chicago PMI | Apr | 59.8 | | 58.8 | HIGH | | Fri. April 30 | 10:00 | Consumer Sentiment Index (UoM) | Apr | 71.5 | | 69.5 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 15 Yr Fixed 4.625% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 5.125% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 5/1 ARM 3.750% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Apr 19, 2010 --- Vol. 8, Issue 16 |
Last Week in Review: Goldman Sachs allegations of fraud are in the headlines, giving the markets a good shaking up...plus, an update on the new construction housing front. Forecast for the Week: Market volatility may still be the pattern ahead as earnings season continues, plus more housing, inflation, and job news on the way. View: Recycling isn't just good for the environment - it can be good for your wallet, too! Learn how. |
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"NOTHING GOLD CAN STAY"...or so says Robert Frost's famous poem. But the whole market wonders if Goldman Sachs can "stay gold", following last week's shocker headline that the Securities and Exchange Commission is charging the financial giant with fraud. The SEC is alleging fraud on the part of Goldman Sachs, in relation to their actions surrounding subprime mortgages and Collateralized Debt Obligations. Here's an analogy of how the SEC sees Goldman's actions: Imagine that you asked a builder to construct a house with materials that you know will eventually cause the house to light on fire and burn to the ground. In the meantime, you place a bet that the house will burn down, and also take out fire insurance on the house for when it does burn down. The house is built - which you then sell to an unsuspecting buyer. Sooner or later, sure enough, the house burns down. You make multiple profits...but it's just not right. The SEC is saying that Goldman acted similarly with subprime mortgages and other risky debts, profiting enormously from the failure of financial instruments that they knew were designed and destined to fail. How the story will play out remains to be seen - but the stunning allegations caused Stocks in the US and abroad to plunge lower. Stocks had been on a nice run higher based on a reasonably good kick off to earnings season, but as money flowed out of Stocks on the news, it was parked in Bonds - helping home loan rates improve. In other news, the National Bureau of Economic Research (NBER) said that it would be "premature" to give an end date to the recession based on the economic data seen so far. And while some of the statistics may show that the economy has improved in many areas - the labor market continues to be very weak. It also remains to be seen how housing will fare without stimulus, and additionally, while corporate earnings seem to be on the rise, it is not yet known whether that is from improving business and higher revenues, or rather due to cost-cutting measures. There was some good news last week on the housing front, as you can see in the chart below. Housing Starts for March came in higher than estimated and at the highest level since November 2008. Building Permits - an indication of future construction - also came in higher. -----------------------
Chart: Housing Starts  Keep in mind, however, that Housing Starts can be a double edged sword...as seeing more new construction of homes could be representative of builders' sentiment and speculation rather than actual purchases. Hopefully the new construction happening will be bought up, and not eventually become a drag on housing by adding to the already heavy load of inventory. NATURE'S FIRST GREEN MAY BE GOLD...BUT BEING A LITTLE "GREEN" WILL ALSO HELP ADD A LITTLE "GOLD" TO YOUR BANK ACCOUNT, TOO! CHECK OUT THIS WEEK'S MORTGAGE MARKET GUIDE VIEW FOR ALL THE DETAILS. |
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The Goldman Sachs story will continue to unfold...and it will be very interesting to follow, as well as monitor the market reactions as more details and information become made known. More housing news follows this week, with Thursday's Existing Home Sales Report followed by New Home Sales on Friday...and hopefully both of these reports will bring positive news on the real estate market. Less than two weeks remain for homebuyers to get in on the Tax Credit - purchase contracts need to be signed by April 30th to qualify! There will also be more inflation news this week with Thursday's Producer Price Index (PPI), which measures inflation at the wholesale level. Last week it was reported that the Consumer Price Index for March met expectations, and while the report might give the Fed more ammunition to jawbone about inflation being low; there are many reasons to question whether inflation is really as low as being reported. The Feds will try to continue to make this case - as it helps keep borrowing costs for the US low, in the face of pumping out massive amounts of new debt. Also on Thursday, we'll have another Initial Jobless Claims Report, and these days it's important to review every report about the labor market. Rounding out the week is Friday's Durable Goods Report, which gives us an update on consumer and business buying behavior on big ticket items that last for an extended period of time. Along with the Goldman Sachs story potentially continuing to shake up Stocks, remember this rule of thumb: weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, it's been a volatile few weeks for Bonds and home loan rates since the Fed buying support ended. While Bonds and home loan rates ended last week on an improving note...with earnings season continuing, the Goldman Sachs drama ensuing, and a full slate of economic reports ahead...the volatility is likely to continue! If you have any questions about what all this means for your situation, don't hesitate to give me a call or email. -----------------------
Chart: Fannie Mae 4.5% Mortgage Bond (Friday, April 16, 2010)  |
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Reducing Waste Can Also Help Your Savings This Thursday, April 22, marks the 40th anniversary of Earth Day. While many of the ideas associated with Earth Day are directed at helping the planet, many of those ideas can also have a positive impact on your own home budget. The ideas below focus on specific ways that you can save - and in some instances make - money by reducing waste. Recycle It Most people already recycle on some level, whether at home or by dropping a plastic bottle in a recycling bin when they're at the mall. While recycling benefits the environment through less trash buried in landfills, it can also benefit your bottom line. The reality is, the more you recycle, the less you have to pay for trash removal. So look for more opportunities to recycle rather than toss - and try to purchase items that have less packaging to begin with, so you'll have less trash. In addition, don't forget that you can even make some money by recycling some items (such as MP3 players, cell phones, calculators, digital cameras, and more) through websites like YouRenew and BuyMyTronics. Compost It Communities across the country have developed citywide compost sites where people can drop off their grass clippings, leaves, and even Christmas trees. But you can also create a compost at your own home that benefits you in two ways. First, a home compost makes it easy and convenient for you to compost - rather than throwaway - a wide variety of household and kitchen items. In fact, in addition to grass clippings, weeds and leaves, you can dispose of things you might normally throw away, including: - Shredded newspaper
- Ripped cardboard
- Ash from a fireplace or woodstove
- Lint from your dryer and vacuum
- Coffee grounds and tea bags
- Fruit and vegetable scraps
- Wool rags...and more!
When you add it all up, there's a lot of everyday waste that can be composted rather than thrown away - which can help reduce your garbage bill significantly when combined with recycling! The second way that composting can help you save is by providing you with a free source of nutrient-rich compost for gardens and lawns. Which means you can save by not purchasing soil or black dirt...and you can save on delivery charges or gas money for your own vehicle. And in these challenging times, every little bit of money you save helps! Sell It If you have items around the house that you no longer use, try selling them rather than throwing them away. Whether you sell the items for very little money at a garage sale or on eBay, you'll be making money...rather than paying the garbage company to haul it away! If you've never sold an item on eBay, you can find a lot of helpful information on the get started on eBay website. Donate It Not every item can be sold, but that doesn't mean you have to resort to trashing it or paying to have it hauled away. By donating old clothing items or even a broken-down car, you can save on the garbage bill and even make money at the end of the year in the form of a tax deduction. It's a win-win-win situation! TurboTax provides information and a video about donating on its website. Take a look for ideas on what to donate and how to make sure you qualify for a deduction. Reuse It One of the best ways to reduce waste - and save on your shopping bills - is to simply reuse items. That can mean using your regular plates and glasses, rather than paper or plastic cups that fill your garbage bin (and have to be purchased over and over again). Reusing plastic containers from products like sour cream or cottage cheese also means you don't have to throw those items away and you don't have to purchase plastic bags for leftovers. Other ideas include using washable towels and napkins instead of paper towels and paper napkins. You can also save wrapping paper from a birthday party or holiday celebration for use later...that alone can eliminate the unnecessary bill of paying for additional garbage bags after a celebration. Finally, don't forget items such as shower curtains. For example, by purchasing a shower curtain made out of Pack Cloth that's washable, you'll save not only on the expense of disposing of old shower curtains every few months, but also the expense of buying new ones so often. As an added benefit, Pack Cloth doesn't give off harmful toxins, so your home and family will be safer while you save. By following these simple steps, you'll not only save by reducing waste, but you can actually make some money in the process!
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of April 19 - April 23 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. April 19 | 10:00 | Index of Leading Econ Ind (LEI) | Mar | 1.0% | | 0.1% | Low | | Wed. April 21 | 10:30 | Crude Inventories | 4/17 | NA | | -2.20M | Moderate | | Thu. April 22 | 08:30 | Jobless Claims (Initial) | 4/17 | NA | | 484K | Moderate | | Thu. April 22 | 08:30 | Core Producer Price Index (PPI) | Mar | 0.1% | | 0.1% | Moderate | | Thu. April 22 | 08:30 | Producer Price Index (PPI) | Mar | 0.5% | | -0.6% | Moderate | | Thu. April 22 | 08:30 | Existing Home Sales | Mar | 5.30M | | 5.02M | Moderate | | Fri. April 23 | 08:30 | Durable Goods Orders | Mar | 0.0% | | 0.9% | Moderate | | Fri. April 23 | 10:00 | New Home Sales | Mar | 320K | | 308K | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 15 Yr Fixed 4.625% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 5.250% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 5/1 ARM 3.750% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. | For the week of Apr 12, 2010 --- Vol. 8, Issue 15 |
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"THE FUTURE INFLUENCES THE PRESENT JUST AS MUCH AS THE PAST." While getting your mind around that brain-bender from philosopher Friedrich Nietzsche might be a bit of labor...the point of influence is very well-taken. And while the present health of the housing market is certainly influenced by the present health of the labor market - last week brought a bit of welcome good news on the housing front. The Pending Home Sales number came in with a surprising 8.2% boost in February. Although the report is only a prediction of sales that will close in a month or two, it's a good sign for the housing market...not to mention that it's very good news for those homebuyers who are now under contract in time to take advantage of the Homebuyer Tax Credit before the deadline! Remember, contracts must be in place by the end of this month - April 30th - in order to qualify for the tax credit. But indeed, the health of housing will be influenced by the labor market - and a lot of work remains to be done in that area of the economy. As you can see in the chart below, the national Unemployment Rate remains at 9.7%, but has moved below the 10.1% rate seen in October. -----------------------
Chart: U.S. Unemployment Rate (By Month)  Although the employment picture overall still needs to see some real improvement, there's still good reason to believe that housing will continue to stabilize over the next year, and then begin to move modestly higher. With home loan rates having improved this past week - buyers still have a chance to get into a great home loan rate...and get the Homebuyers Tax Credit before the deadline of April 30th. SPEAKING OF DEADLINES - DON'T FORGET THAT APRIL 15TH IS THIS THURSDAY. BUT THIS "TAXING" TIME OF THE YEAR IS ALSO A GREAT TIME TO EDUCATE KIDS ABOUT MONEY AND FINANCIAL DECISIONS. FOR A LIST OF MONEY SKILLS EVERY CHILD SHOULD MASTER, CHECK OUT THE SPECIAL MORTGAGE MARKET GUIDE VIDEO VIEW ARTICLE AND VIDEO BELOW. |
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After a relatively slow economic report week, the calendar picks up again during the week ahead. On Wednesday, we'll see more news about the labor market when the ADP National Employment Report is released with new data on the employment front. Then on Thursday, we'll see another round of Initial Jobless Claims. After last week's increase in new unemployment claims, you can bet the markets will be waiting to see how this report comes in. Wednesday brings an update on the all-important topic of inflation when the Consumer Price Index is released. The Fed still officially feels that inflation is not a present concern - but some Fed members have expressed their opinions that upcoming monetary decisions should be made with a "data-dependent" eye. This means that the upcoming data - like the Consumer Price Index - will be analyzed very carefully. We'll also see updates on the manufacturing sector of the economy, with reports on Industrial Production and Capacity Utilization as well as the Philadelphia Fed Index on Thursday. Finally, Friday brings another dose of news on the health of the housing industry, with reports on the number of Housing Starts and Building Permits recorded during March. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, there has been a great deal of volatility in the market of late - and particularly with the Fed having exited their buying program, the wild ride isn't likely going to be over anytime soon. If you have any questions about home loan rates - and the volatility seen over the past several weeks, just give me a call or send me an email. I'm always glad to hear from you! |
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| 6 Money Skills Kids Should Master By Age 18 If the current economic climate has taught us anything, it's that financial education and responsibility are critical in today's fast-paced, wired world. All too often, however, children grow up immune to the financial world around them. As a result, they're often ill equipped to manage their own finances when they become adults and leave home. With April 15th approaching fast, now's a perfect time to start educating your children about how to manage money more responsibly. Check out this video from Kiplinger.com for 6 Money Skills Kids Should Master By Age 18. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of April 12 - April 16 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. April 13 | 08:30 | Balance of Trade | Feb | -$39.0B | | $-37.3B | Moderate | | Wed. April 14 | 08:30 | Core Consumer Price Index (CPI) | Mar | 0.1% | | 0.1% | HIGH | | Wed. April 14 | 08:30 | Consumer Price Index (CPI) | Mar | 0.1% | | 0.0% | HIGH | | Wed. April 14 | 08:30 | Retail Sales | Mar | 1.1% | | 0.3% | HIGH | | Wed. April 14 | 08:30 | Retail Sales ex-auto | Mar | 0.5% | | 0.8% | HIGH | | Wed. April 14 | 10:30 | Crude Inventories | 4/10 | NA | | 1.98M | Moderate | | Wed. April 14 | 02:00 | Beige Book | | | | | Moderate | | Thu. April 15 | 10:00 | Philadelphia Fed Index | Apr | 20.0 | | 18.9 | HIGH | | Thu. April 15 | 09:15 | Industrial Production | Mar | 0.7% | | 0.1% | Moderate | | Thu. April 15 | 09:15 | Capacity Utilization | Mar | 73.3% | | 72.7% | Moderate | | Thu. April 15 | 08:30 | Jobless Claims (Initial) | 4/10 | 440K | | 460K | Moderate | | Fri. April 16 | 08:30 | Building Permits | Mar | 626K | | 612K | Moderate | | Fri. April 16 | 08:30 | Housing Starts | Mar | 610K | | 575K | Moderate | | Fri. April 16 | 10:00 | Consumer Sentiment Index (UoM) | Apr | 75.0 | | 73.6 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 15 Yr Fixed 4.625% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 15 Yr Fixed 5.375% ½ Point 5/1 Arm 4.875% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% ½ Point 5/1 ARM 4.000% 0 Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Apr 05, 2010 --- Vol. 8, Issue 14 |
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"YOU DON'T KNOW WHAT YOU GOT UNTIL IT'S GONE - AND I FOUND OUT A LITTLE TOO LATE..." The words from Chicago's hit song from the 80's sums up the market's sentiment on the ending of the Federal Reserve's Mortgage Backed Security buying program, and the resulting volatility for home loan rates that has already begun. The Fed did what they set out to do - purchasing $1.25 Trillion in Mortgage Backed Securities, and succeeding in their plan to lower home loan rates and help stabilize the housing sector. And even though they stretched out the length of the program slightly - in order to soften the impact of the end of the program - the training wheels are now off, the safety net is gone, and home loan rates have already moved higher. In fact - as the Fed will now gradually become a seller of their massive holdings of Mortgage Backed Securities - rates are very likely to continue to move higher still. Even after home loan rates took a jump higher last week, they still remain at reasonably low levels - which makes right now a crucial time to take advantage of the opportunities that exist, including the Homebuyers Tax Credit which is down to its last month. To take advantage of the generous credit, purchase contracts must be signed by the end of April. If you or someone you know has questions about this credit - please don't wait to get in touch with me. Adding to last week's volatility, the official Jobs Report was released last Friday - and according to the report, 162,000 jobs were created in March, making it the biggest one-month increase in three years. Additionally, there were upward revisions to January and February, which brought the last two months' net job losses to near zero. -----------------------
Chart: Nonfarm Payrolls (By Month)  While it was good to see some positive numbers, we're not exactly out of the woods just yet, as there were some concerning aspects of this Jobs Report. For example, Average Hourly Earnings actually fell 0.1% in March. This could be viewed as a negative sign, indicating that there's no pressure on companies to pay workers more to retain them. It also shows continued temporary hiring at a lower pay scale. The official Unemployment Rate remained steady at 9.7%, but when factoring in the "underemployed", including people who accepted part-time work because full-time work is simply not available, the rate of unemployment overall rose from 16.8% to 16.9%. This is a big number that continues to weigh on the labor market. Also in the news last week, the US Savings rate moved down to its lowest Level since October 2008. Check out the mortgage market guide view article below for some simple ways to boost your savings. |
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This week's economic calendar may seem slow after the wave of economic news last week. But there are still some big items on tap, starting off right away Monday morning when the Pending Home Sales report gives us a look at the health of the housing industry. Tuesday brings us the Meeting Minutes from the latest Fed Meeting. Although we already know what the Fed's policy announcement was, the markets will be looking at the discussion contained in the Meeting Minutes as an indication of what Fed members are thinking and what they may do in the future. On Thursday we'll get another look at Initial Jobless Claims. Last week, Initial Jobless Claims were reported basically in line with expectations and down from the previous week's number, and Continuing Jobless Claims declined as well. With those numbers and last week's official Jobs Report in mind, the market will be watching to see if the labor market can continue to make positive strides. Finally, in addition to those reports, the Treasury Department will auction off $82 Billion in Treasuries. And since most of those will be longer maturities that compete with Mortgage Backed Securities, the auctions could add volatility to the markets depending on how they are received. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Mortgage Bond prices plunged last week and rates increased .25%. |
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Boost Your Savings...Without Hardly Trying These days most people would welcome the idea of having more money in their savings account. Here are a few ideas that can help make that possible. And the best part is...you'll hardly feel it! Bring Your Lunch to Work - Most people spend $6 (or more) when they buy their lunch, yet spend $2 when they pack it themselves. That's a potential savings of $20 a week or $1,040 dollars a year. Durable over Disposable - Using products like Handi-Wipes (semi-disposable rags) as opposed to paper towels, and a rechargeable razor rather than the disposable kind, can save about $200 per year. Hold an Annual Yard Sale - You should have no problem making at least a hundred bucks. Besides, you'll get rid of all that household clutter in the process. Whatever you don't sell can be donated to charity and used as a tax write-off. Ask for Discounts - From buying airline tickets to paying a medical bill, always ask if there's a discount to be had. The worst that can happen is you'll be told no. Get a Library Card - As opposed to buying a book for $20 or renting a DVD for $4, get it for free. If you average 3 movie rentals a month, you'll save yourself over $140 a year. Watch Those Utilities - Changing over to energy-saving light bulbs and low-flow showerheads is a great start. Also, most utility companies offer a home audit you can complete online. If not, go to http://hes.lbl.gov for a virtual inspection of your home. You may be surprised to learn how much energy (and money) you could be saving. The good news is that suggestions like these are merely a start. Taking the time to discover inefficient habits in your household and making a few minor adjustments can lead to more savings opportunities than you may realize! And that's great news, both today and in every kind of economy! |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of April 05 - April 09 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. April 05 | 10:00 | ISM Services Index | Mar | 54.0 | 55.4 | 53.0 | Moderate | | Mon. April 05 | 10:00 | Pending Home Sales | Feb | 0.0% | 8.2% | -7.6% | Moderate | | Tue. April 06 | 02:00 | FOMC Minutes | | | | | HIGH | | Wed. April 07 | 10:30 | Crude Inventories | 4/03 | NA | | 2.93M | Moderate | | Thu. April 08 | 08:30 | Jobless Claims (Initial) | 4/03 | 433K | | 439K | Moderate |
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| For the week of Mar 29, 2010 --- Vol. 8, Issue 13 |
Last Week in Review: Learn why March is going out like a lion instead of a lamb. Also, the latest on housing numbers...and more! Forecast for the Week: The Fed's Mortgage Backed Security buying program ends Wednesday...what will this mean for home loan rates? Plus - big economic releases on jobs and inflation could be market movers. The View: Just one month left to take advantage of the Homebuyer Tax Credit, which could mean up to $8,000 in your pocket. Don't miss the details...or pass them on to someone who could benefit! |
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THEY SAY THAT MARCH COMES IN LIKE A LION AND GOES OUT LIKE A LAMB... But this year, the exact reverse is true when it comes to home loan rates - for quite a few reasons, including the end of the Federal Reserve acting as a large buyer of Mortgage Backed Securities (MBS). The "demand" created by their fifteen-month program has helped Bond prices stay high and home loan rates stay low. But the Fed's MBS purchase program will end on March 31st. The Fed has confirmed this several times, including during last week's testimony by Fed Chairman Ben Bernanke. What's more, the Fed will likely change sides entirely, and actually become a seller of MBS, since their balance sheet hangs heavy with MBS holdings. However, once the Fed begins selling MBS and puts more supply into the market - at the same time as entirely removing their past demand as buyers - this will pressure Bond prices lower and push home loan rates higher. If you or someone you know would like to learn more about how you can take advantage of today's low-rate environment, or the Homebuyer Tax Credit which is due to expire on April 30 (see the below View article for more details), just call or email me. Additionally, consider forwarding this issue to a friend, family member, neighbor or coworker who might benefit from the information. -----------------------
Chart: Gross Domestic Product  In other news, the final reading on 2009's Fourth Quarter Gross Domestic Product (GDP) roared in at 5.6%. While this was the best quarterly performance in six years, the economy shrank 2.4% during 2009, the worst single-year performance since 1946.
However, last week's housing news arrived with a bit of a whimper. While Existing Home Sales for February were reported in line with expectations, the inventory number swelled to the highest inventory level since last August. In addition, New Home Sales fell slightly in February - the fourth straight monthly drop - to yet another record low. On the new construction front - this may be due in part to buyers feeling a new home purchase may not close in time to take advantage of the Homebuyers Tax Credit before it expires on April 30th...but the bottom line is that the real fix for housing will depend on a stronger labor market.
Weak auction results and the approaching end of the Fed's MBS purchase program contributed to a volatile week in the markets, causing Bonds to fall below important technical levels. As a result, Bonds and home loan rates ended the week worse than where they began.
THERE'S JUST ONE MONTH LEFT BEFORE THE HOMEBUYERS TAX CREDIT EXPIRES ON APRIL 30! CHECK OUT THIS WEEK'S MORTGAGE MARKET GUIDE VIEW FOR IMPORTANT DETAILS. |
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March will certainly roar out with a big week of news, beginning with Monday's Personal Income and Personal Spending Reports. We'll also get a look at the Core Personal Consumption Expenditure (PCE), which is the Fed's favorite gauge of inflation. Rest assured the Fed will be watching this report closely! The Labor Market will also be in the spotlight, first with Thursday's Initial Jobless Claims Report. Last week's Initial Jobless Claims were reported lower than expectations and at the lowest reading in 6 weeks. The numbers show modest improvements and are somewhat encouraging. Hopefully, Friday's official Jobs Report from the Labor Department for March will also be encouraging. Last month's report showed that 36,000 jobs were lost in February, which was better than the 68,000+ job losses that were expected. However, while the Unemployment Rate remained stable at 9.7%, a deeper look beyond the headlines of the report showed what many consider to be the Real Unemployment Rate to be near 17%...which includes discouraged workers who are no longer seeking employment, as well as "underemployed" folks who have taken part time or low paying jobs, just to be bringing some money in the door. The bottom line is that real improvement is needed in the labor market for our economy to continue to recover. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. And with the Fed MBS buying program ending...there will likely be more volatility for home loan rates in store. As you can see in the chart below, Bonds worsened last week, causing home loan rates to rise - and rates always go up much faster than they move lower. I'll be watching closely to see what happens this week as March comes to a close - and please get in touch if I can be of any assistance in answering your questions on rates and current opportunities. Chart: Fannie Mae 4.5% Mortgage Bond (Friday Mar 26, 2010)  |
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Only 1 Month Left to Qualify...
Don't Miss Out on the Tax Credit! Last November, the government expanded and extended the new Homebuyers Tax Credit. According to the program, first-time homebuyers are eligible for a tax credit of 10% of the purchase price of the home, with a maximum credit of $8,000. And some current homeowners looking to purchase a home can receive a credit up to $6,500. Although military personnel may qualify for a special extension, the vast majority of homeowners must have contracts in effect no later than April 30, 2010 and must close no later than June 30, 2010 to qualify for the credit. That means...you only have one month to get your paperwork going to qualify for this credit before it goes away! Here is a brief overview of the Homebuyers Tax Credit - and its benefits. Dollar-for-Dollar Benefit The benefit of a tax credit is that it's a dollar-for-dollar benefit, rather than a "tax deduction" or reduction in tax liability that would save just $1,000 to $1,500 when all was said and done. So, if a first-time homebuyer who qualified for the entire benefit were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing. Even Better... It's Refundable! Remember, because it's a tax credit, it's refundable! That means a homebuyer can receive a check for the credit if he or she has little or no income tax liability. For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax, she can still receive a check for the remaining $4,000! What Are the Income Caps? Single tax filers with earnings of $125,000 or less are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers with earnings of $145,000 and above are ineligible. Joint filers with earnings of $225,000 or less are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers with earnings of $245,000 and above are ineligible. What's the Maximum Purchase Price? Qualifying buyers may purchase a property with a maximum sales price of $800,000. Remember, the Homebuyer Tax Credit program includes a number of details and qualifications. Call or email today if you have questions or would like to see if you can benefit from the tax credit...and email this article to anyone you feel it might benefit!
This Week's Economic Indicator Calendar Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 29 - April 02 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. March 29 | 08:30 | Personal Spending | Feb | 0.3% | | 0.5% | Moderate | | Mon. March 29 | 08:30 | Personal Income | Feb | 0.1% | | 0.1% | Moderate | | Mon. March 29 | 08:30 | Personal Consumption Expenditures and Core PCE | Feb | 0.1% | | 0.0% | HIGH | | Mon. March 29 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 1.4% | HIGH | | Tue. March 30 | 10:00 | Consumer Confidence | Mar | 49.0 | | 46.0 | Moderate | | Wed. March 31 | 10:30 | Crude Inventories | 3/27 | NA | | 7.25M | Moderate | | Wed. March 31 | 09:45 | Chicago PMI | Mar | 61.0 | | 62.6 | HIGH | | Wed. March 31 | 08:15 | ADP National Employment Report | Mar | 50K | | -20K | HIGH | | Thu. April 01 | 08:30 | Jobless Claims (Initial) | 3/27 | 445K | | 442K | Moderate | | Thu. April 01 | 10:00 | ISM Index | Mar | 57.0 | | 56.5 | HIGH | | Fri. April 02 | 08:30 | Non-farm Payrolls | Mar | 190K | | -36K | HIGH | | Fri. April 02 | 08:30 | Unemployment Rate | Mar | 9.7% | | 9.7% | HIGH | | Fri. April 02 | 08:30 | Average Work Week | Mar | 33.9 | | 33.8 | HIGH | | Fri. April 02 | 08:30 | Hourly Earnings | Mar | 0.2% | | 0.1% | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 15 Yr Fixed 4.625% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 5.125% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% ½ Point 5/1 ARM 3.875% ¼ Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. | For the week of Mar 22, 2010 --- Vol. 8, Issue 12 |
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"I WILL ACT NOW. I WILL ACT NOW. I WILL ACT NOW. " Og Mandino. And wondering what kind of action will happen on Healthcare reform was certainly on everyone's mind last week. But what does this mean for the markets and home loan rates?  Traders have been watching the debate closely, and it's possible that passage of the Healthcare Bill could have a negative impact on the Stock market. If this is the case, there could in turn be a positive outcome for Bonds and home loan rates. But that's not the only action traders were keeping an eye on last week. Tuesday's meeting of the Federal Open Market Committee offered little surprise, with no change to the Fed Funds Rate, which is the rate banks charge each other for lending overnight, or the language describing that the Fed Funds Rate would remain "exceptionally low for an extended period of time." While there is growing and well-warranted concern that continuing to keep rates low will lead to inflation down the road...and remember, inflation is the arch enemy of bonds and home loan rates...it does appear that inflation is subdued at present. Last week's reports showed that the Producer Price Index (PPI), which gauges inflation at the wholesale level, was reported well below expectations and at the largest monthly decline since July 2009. Meanwhile, the Consumer Price Index (CPI), which measures inflation at the consumer level, came in just below expectations for February. And there were additional headlines last week on other possible action that could impact Bonds and home loan rates negatively. Both Fitch Ratings and Moody's have stated that the US has moved substantially closer to losing its AAA credit rating. This would be a very bad turn of events, as it would cost the US a lot more money in interest payments, by way of higher rates, to attract new investors to buy our Bonds. And higher rates on Treasuries would influence home loan rates higher as well. If you or someone you know would like to learn more about how you can take advantage of today's low-rate environment, or the Homebuyer's Tax Credit which is due to expire on April 30, give me a call. Bonds were able to improve above important technical levels in the middle of the week, but were unable to hang on to these improvements. As a result, Bonds and home loan rates ended the week about the same as where they began. SPRING IS IN THE AIR, WHICH MEANS IT'S TIME TO TAKE SOME CLEANING ACTION! CHECK OUT THIS WEEK'S MORTGAGE MARKET GUIDE VIEW FOR SOME SAFE AND HEALTHY SPRING CLEANING TIPS. |
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The action during Sunday's healthcare vote will almost certainly impact the markets in the coming week, and there is also a full slate of economic reports to watch for. First up, there will be a double-dose of housing news with Tuesday's Existing Home Sales Report and Wednesday's New Home Sales Report. Also, on Wednesday we'll get a read on the health of the economy with the Durable Goods Report, which gives us an update on consumer and business buying behavior on big ticket items that last for an extended period of time. Friday will bring another read on the economy with the Gross Domestic Product Report, which is the broadest measure of economic activity. Not to be missed will be Thursday's weekly Initial Jobless Claims Report. While last week's initial claims were essentially inline with expectations, the ugly component of the report was the 5,888,048 people collecting EUC (Emergency Unemployment Compensation) benefits. This is a whopping 360,000 person increase from the prior week. Unfortunately, the labor market continues to be very weak. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, despite midweek volatility, Bonds and home loan rates ended the week very near where they began. With all the action in store, I'll be watching closely to see in what direction the markets and rates move this week. As always, please feel free to call or email to get more information on what the current rate climate means to you. |
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Safe Spring Cleaning for Your Home and Family Many parts of the country are already warming up to spring...and that means spring cleaning. But have you ever considered what you're using to clean your home...and if it's really safe for your family? The problem with cleaning products is that there is very little regulation and virtually no labeling requirements. "A lot of cleaning products contain toxic ingredients that aren't properly regulated, disclosed, or in some cases even tested," said Sara Mohs, co-founder of simplyneutral™, a company that promotes sustainable living through non-toxic cleaners. In fact, most household cleaners are produced using a petroleum-based formula. That's right, petroleum! In addition, they typically include chemicals, fragrances, and dyes that can be irritating to your eyes, skin, and respiratory tract. In light of last week's Poison Prevention Week, here's a list of natural alternatives that work great and are probably already in your pantry: Baking soda - We all know that baking soda absorbs odors, especially in refrigerators, but did you know it's also a simple and effective cleaner? Just mix baking soda with warm water for an inexpensive cleaner comparable to commercial "abrasive" cleaners. Vinegar - White vinegar is actually a deodorizer and a disinfectant...making it a great all-purpose cleaner. Avoid using vinegar solutions on marble or grout, but it's perfect for all of the other surfaces in the kitchen and bathroom. Lemon juice - Use lemon juice on hard-water stains, soap scum, even rust stains in the shower, tub, and toilet. Mix lemon juice with salt to remove stubborn stains from coffee pots. Or you can mix lemon juice with baking soda for a softer, paste-like cleaning solution. Add a little to olive oil for an effective wood polish. Blend it with water to make a potent air freshener. Cornstarch - Cornstarch makes an effective glass and surface cleaner. Plus, you can combine 2 tbsp of cornstarch with 3/4 cup of baking soda for an inexpensive carpet freshener. Borax - Also known as sodium borate, borax is best known as a hard-water laundry soap, but it also cleans wallpaper, painted walls, and other painted surfaces. In addition to these natural ingredients, there are also a number of non-toxic cleaners that can be bought in stores. But make sure you consider a couple of points before making your purchase. First, read the label carefully. "Although a cleaner may contain natural ingredients, it may also include dyes, fragrances, or synthetic preservatives," Mohs said. "For example, if the label says fragrances are added, it may contain up to 150 synthetic chemicals." Second, you may want to take a quick look at the company itself to see if it is serious about producing natural cleaners that are safe for your family, your home, and the environment. For more information and tips about non-toxic cleaning, visit www.simplyneutral.com. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 22 - March 26 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. March 23 | 10:00 | Existing Home Sales | Feb | 5.00M | | 5.05M | Moderate | | Wed. March 24 | 08:30 | Durable Goods Orders | Feb | 0.5% | | 2.6% | Moderate | | Wed. March 24 | 10:00 | New Home Sales | Feb | 315K | | 309K | Moderate | | Wed. March 24 | 10:30 | Crude Inventories | 3/20 | NA | | 1.01M | Moderate | | Thu. March 25 | 08:30 | Jobless Claims (Initial) | 3/20 | 450K | | 457K | Moderate | | Fri. March 26 | 08:30 | Gross Domestic Product (GDP) | Q4 | 5.9% | | 5.9% | Moderate | | Fri. March 26 | 08:30 | GDP Chain Deflator | Q4 | 0.4% | | 0.4% | Moderate | | Fri. March 26 | 10:00 | Consumer Sentiment Index (UoM) | Mar | 73.0 | | 72.5 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 0 Point 15 Yr Fixed 4.500% 0 Point Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 5.125% 1 Point FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% ½ Point 5/1 ARM 3.875% ¼ Point As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Mar 01, 2010 --- Vol. 8, Issue 9 |
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"LIKE SLUGGISH WATERS THROUGH A MARSH..." The poet Sir Walter Scott wasn't talking about the economic recovery, but his words paint a pretty vivid picture...and after last week's economic reports, perhaps a pretty accurate one on the state of the recovery. Last week's Gross Domestic Product (GDP) report showed that the economy grew 5.9% in the 4th quarter of 2009, which was in line with expectations and the best GDP reading in more than 6 years - which on the surface, sounds like a great number. However, the gains came from rebuilding of inventory and very modest business spending - not from consumer spending. The biggest component of GDP is consumer spending and the revised number on that front came in lower than expected, and far worse than the 3rd Quarter of 2009, when the government's Cash for Clunkers program temporarily boosted sales. On the housing front, Existing Home Sales for January were reported at 5.05 Million units, which was less than expectation of 5.44 Million. As you can see from the chart below, Existing Home Sales have now declined for two consecutive months. New Home Sales for January were also reported below expectations last week. Odds are that inclement weather affected the housing market negatively in January - since people are less likely to go house hunting in the midst of snowstorms and freezing temperatures. But in any case, last week's data demonstrated that the housing market remains a bit lethargic. The good news is that today's affordable home prices and amount of supply on the market - not to mention low rates and the government's Homebuyers Tax Credit - present tremendous opportunities for homebuyers who are looking for a great deal. -----------------------
Chart: Existing Home Sales (By Month)  So how do consumers feel about the economy? Last week, we got a look at two different reports...and both indicated that consumers don't share the rosy outlook of politicians and the media. Consumer Confidence was reported at 46.0, which was much lower than expectations of 55.0. In addition, the University of Michigan reported that Consumer Sentiment also fell in February. Both reports pointed to ongoing concerns over employment as a major reason for the drop in consumer attitudes about the economy. To help make ends meet during the recession, some consumers have turned to earning cash as a landlord. If you or someone you know is considering doing the same, read the view article below for important advice to help make sure you're successful! |
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This will be a big week of news, starting off right away Monday morning with reports on Personal Income and Personal Spending. We'll also get a look at the Core Personal Consumption Expenditure (PCE), which is the Fed's favorite gauge of inflation. As if that weren't enough news for one day, we'll also see the Institute for Supply Management Index on Monday. This is the king of all manufacturing indices and is considered the single best snapshot of the factory sector, so the markets will be paying attention to this report. Toward the end of the week, we'll get another look at employment and housing with the reports on Initial Jobless Claims and Pending Home Sales on Thursday. Finally, the week ends with a bang when the official Jobs Report is released. This report includes the latest government data on job losses and the unemployment rate, as well as the average work week and hourly earnings. With the ongoing concerns over the struggling job market, it will be important to get a current read on the situation. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Mortgage Bonds were able to rally last week on weak housing numbers and the struggling jobs market, resulting in improved home loan rates. I'll be watching carefully in the week ahead to see if Bonds and home loan rates can build on their positive momentum. |
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Being a Successful Landlord These days, some homeowners are choosing to rent out all or part of their home to help pay for their mortgage costs. But being a successful landlord is more than just sitting back and collecting the rent. Here are some tips to help if you ever choose to become a landlord. Charge a Fair Price: All real estate is local, and the best and quickest way to success is to know your marketplace and what you can expect to charge for a fair rent in your area. Some things you can do to determine a fair price include studying local classified ads, scouring the Internet, and finding out what neighbors are charging for rent. Write the Right Ad: Getting the right tenant is even more important than picking the right price to charge. Attract the right tenants with ad phrases such as "good credit and references," "no pets," "no smokers," etc. Create a Thorough Application Process: Be sure to require proof of identity, past addresses and landlord contact information, employment information, and references. Also, ask questions like how many people will be living with the applicant and how long they plan to rent. Check References EVERY Time: Call their previous landlords and ask if the rent was paid on time. Find out how the property was left when they vacated. Were the tenants loud and troublesome? Did they complain a lot? Did they report small repairs in a timely manner? It's easier to avoid a bad tenant now than to try and evict one later. A Final Creative Idea: Before signing the deal, make an unexpected visit to your prospective tenants' current apartment or residence. You will get a good look at how they keep their home as it is likely to be the way they keep yours. And Always Ask the Experts: Be sure to check with your tax professional to make sure you file your taxes correctly and to see if there are any rebates or other benefits you qualify for. Some people choose to be landlords, while others have it thrust upon them due to market conditions. Either way, taking the steps mentioned here will help make the experience more successful for everyone involved. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 01 - March 05 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. March 01 | 01:00 | Personal Income | Jan | 0.4% | | 0.4% | Moderate | | Mon. March 01 | 01:00 | Personal Spending | Jan | 0.4% | | 0.2% | Moderate | | Mon. March 01 | 01:00 | Personal Consumption Expenditures and Core PCE | Jan | 0.1% | | 0.1% | HIGH | | Mon. March 01 | 01:00 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 1.5% | HIGH | | Mon. March 01 | 10:00 | ISM Index | Feb | 58.0 | | 58.4 | HIGH | | Wed. March 03 | 08:15 | ADP National Employment Report | Feb | -35K | | -22k | HIGH | | Wed. March 03 | 02:00 | Beige Book | | | | | Moderate | | Wed. March 03 | 10:00 | ISM Services Index | Feb | 51.0 | | 50.5 | Moderate | | Thu. March 04 | 08:30 | Productivity | Q4 | 6.2% | | 6.2% | Moderate | | Thu. March 04 | 10:00 | Pending Home Sales | Jan | 1.7% | | 1.0% | Moderate | | Thu. March 04 | 08:30 | Jobless Claims (Initial) | 2/27 | NA | | 496K | Moderate | | Fri. March 05 | 08:30 | Unemployment Rate | Feb | 9.8% | | 9.7% | HIGH | | Fri. March 05 | 08:30 | Hourly Earnings | Feb | 0.2% | | 0.2% | HIGH | | Fri. March 05 | 08:30 | Non-farm Payrolls | Feb | -20K | | -20K | HIGH | | Fri. March 05 | 08:30 | Average Work Week | Feb | 33.7 | | 33.9 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 0 Point 15 Yr Fixed 4.375% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 5.250% ½ Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% ½ Points 5/1 ARM 3.750% 0 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. | For the week of Feb 22, 2010 --- Vol. 8, Issue 8 |
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"OPINION HAS CAUSED MORE TROUBLE ON THIS LITTLE EARTH THAN PLAGUES..." Voltaire. And lately, there have been a lot of opinions about inflation being voiced from Fed officials, respected economists, and the media. But what does all this talk really mean for our economy and home loan rates? Here's what you need to know. On Friday, the Consumer Price Index (CPI), which measures the prices US consumers pay, came in lower than expected for January. The chart below shows the year-over-year headline CPI at 2.6%, below expectations of 2.8%. What's more, when volatile food and energy are removed from the equation, the "Core" Consumer Price Index was actually negative - and the last time that happened was 28 years ago. -----------------------
Chart: Consumer Price Index  So, if the CPI Report shows that inflation is currently non-existent, why are so many people expressing concern? The reality is that the factors which are currently restraining inflation pressures could easily swing the other way. In fact, Kansas City Fed President Thomas Hoenig recently said, "Fiscal policy is on an unsustainable course. The US Government must make adjustments in its spending and tax programs. It is that simple. If pre-emptive corrective action is not taken regarding the fiscal outlook, then the United States risks precipitating its own next crisis." And part of the crisis Mr. Hoenig is warning of is the possibility of hyperinflation, which occurs when prices rise so quickly that a currency becomes worthless. Hoenig recently reminded us that he has a framed picture of a 500,000 German mark bill in his office...which would have purchased a home in 1921, but due to sudden inflation, wouldn't purchase a loaf of bread just two years later. Adding to the inflation talk, recent Produce Price Index Reports, which measure inflation at the wholesale level, have shown a trend higher in wholesale inflation. January's report, for example, was significantly higher than expected, due to rising energy costs. Also chiming in with an opinion, Philadelphia Fed President Charles Plosser made some interesting comments regarding monetary policy and sales of assets that the Fed currently owns. Mr. Plosser stated that the Fed should begin to sell off their stockpile of Mortgage Backed Securities (MBS) as the economic recovery gains strength. With the Fed MBS buying program ending soon, and the Fed now potentially turning into a seller of MBS, Bond prices and home loan rates will very likely worsen over time. (More on this in the special "Video View" below...don't miss it!) In other news, the Empire State Manufacturing Index came in higher than expected and up from January's reading. The report also showed business activity picking up and business leaders forecasting better economic conditions in the coming months. In addition, Housing Starts for January came in better than expected and at the highest level since July, thanks in large part to the extension of the Homebuyer Tax Credit. Bond prices were unable to improve after falling below an important technical level this week, and as a result, home loan rates ended the week worse than where they began. MANY PEOPLE ARE ASKING FOR OPINIONS ABOUT WHERE HOME LOAN RATES ARE HEADED...AND WHY. CHECK OUT THIS WEEK'S MORTGAGE MARKET GUIDE VIEW FOR A SPECIAL VIDEO THAT EXPLAINS HOW AND WHY HOME LOAN RATES MOVE...AND WHAT IT MEANS RIGHT NOW. |
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While it's hard to say what opinions might be uttered this week, there will definitely be plenty of news in store. We'll get a look at the housing market with Wednesday's New Home Sales Report and Friday's Existing Home Sales Report. It will be interesting to see if these reports are looking more positive, as many buyers are working to take advantage of the Homebuyer's Tax Credit before it expires this spring. If you want to learn more about this Tax Credit and how it might help you or someone you know - don't hesitate to get in touch with me, I can share all the details and important timelines. Also this week, we'll get several reads on the health of the economy with Thursday's Durable Goods Report - which gives us an update on consumer and business buying behavior on big ticket items that last for an extended period of time - and Friday's Gross Domestic Product Report, which is the broadest measure of economic activity. Tuesday's Consumer Confidence Report and Thursday's Initial Jobless Claims Report will also be important to watch. Last week's Initial Jobless Claims and Continuing Claims numbers were higher than expected, showing that the labor market is still struggling. The bottom line is that while some of the recent economic reports have had encouraging signs, the economy needs to create jobs and regain consumer confidence before any positive opinions on the economy will become reality. And as if it won't be a week jam packed full of opinions already, Fed Chairman Ben Bernanke will be weighing in with some thoughts of his own, as he testifies before Congress on Wednesday and Thursday. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds ended the week below an important technical level. I'll be watching closely to see if Bonds can reverse course and move higher this week, which would result in an improvement for home loan rates. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of February 22 - February 26 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. February 23 | 10:00 | Consumer Confidence | Feb | 55.0 | | 55.9 | Moderate | | Wed. February 24 | 10:30 | Crude Inventories | 2/19 | NA | | 3.08M | Moderate | | Wed. February 24 | 10:00 | New Home Sales | Jan | 355K | | 342K | Moderate | | Thu. February 25 | 08:30 | Jobless Claims (Initial) | 2/20 | 460K | | 473K | Moderate | | Thu. February 25 | 08:30 | Durable Goods Orders | Jan | 1.5% | | 0.3% | Moderate | | Fri. February 26 | 08:30 | Gross Domestic Product (GDP) | Q4 | 5.3% | | 5.7% | HIGH | | Fri. February 26 | 09:45 | Chicago PMI | Feb | 59.0 | | 61.5 | Moderate | | Fri. February 26 | 10:00 | Consumer Sentiment Index (UoM) | Feb | 74.0 | | 73.7 | Moderate | | Fri. February 26 | 10:00 | Existing Home Sales | Jan | 5.50M | | 5.45M | Moderate | | Fri. February 26 | 08:30 | GDP Chain Deflator | Q4 | 0.6% | | 0.6% | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 15 Yr Fixed 4.625% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% ½ Point 5/1 Arm 5.250% ½ Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% ½ Points 5/1 ARM 3.875% ½ Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Feb 08, 2010 --- Vol. 8, Issue 6 |
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"BOTH OPTIMISTS AND PESSIMISTS CONTRIBUTE TO OUR SOCIETY. THE OPTIMIST INVENTS THE AIRPLANE, AND THE PESSIMIST - THE PARACHUTE." G.B. Stern. And last week's Jobs Report had something for both optimists and pessimists, as the numbers were both good and bad...depending on which survey you looked at, and what numbers you focused on. First, the headline numbers: The Labor Department reported that there were 20,000 jobs lost in January, which was worse than expectations of 15,000 jobs gained. However, the Unemployment Rate came in lower at 9.7%, down from last month's read of 10.0%. But what do these numbers actually tell us? Remember that the numbers in the Jobs Report come from two separate surveys: First, the Business Survey - also called the Establishment Survey or Current Employment Statistics Survey - which surveys about 140,000 businesses and government agencies. It uses something called the "birth/death ratio" to provide an estimate of the number of jobs gained or lost each month. This survey is used to report the headline number of jobs gained or lost. Now there is also the Household Survey, also known as the Current Population Survey, which uses actual phone calls to 50 - 60,000 households to gather its data. This survey is used to report the headline Unemployment Rate. The Business Survey is very susceptible to inaccuracy, particularly during times when the labor market is substantially worsening or improving...and you don't need to look much further than all the revisions to prior reports to see how inaccurate the report seems to be. December's report was revised to 150,000 jobs lost, nearly doubling the original report of 85,000 job losses. Although November showed 60,000 additional gains - wait a minute - October's revisions showed another 100,000 jobs lost. And if that weren't enough, the Business Survey threw in a "Benchmark Revision", which indicated that there were an additional 900,000 jobs lost from March 2008 - March 2009 from what was previously reported! -----------------------
Chart: Non-farm Payroll Change and Revisions  So what about the other report, the Household Survey? It gives us the headline Unemployment Rate, which was reported at 9.7%. That's an improvement over last month's reading of 10.0%. But this survey has its own job creation or loss number, just like the Business Survey does. The Household Survey showed that 540,000 jobs were created during January, which is really good news, and explains why the Unemployment Rate declined in the face of the Business Survey showing job losses. There are definitely some glimmers of hope for the job market - but any way you look at it, the bottom line is that continued and significant improvements need to be seen in the labor market before the economy can be considered out of the woods. Another important note for the week - Pending Home Sales for December were up significantly from November's reading, and up a healthy 10.9% over December 2008, as homebuyers take advantage of today's low rates and tax incentives. And speaking of low home loan rates, the Federal Reserve purchased $12 billion in Mortgage Backed Securities last week, bringing the total to $1.173 trillion since the program began in January of 2009...which leaves just $77 billion in purchases to be made over the next eight weeks until the program ends on March 31st. While home loan rates improved very slightly during this volatile week - don't forget that when the Fed is done buying, home loan rates will be very susceptible to moving higher. Please reach out to me to discuss how you or someone you know might benefit from current low rates, or the Homebuyers Tax Credit. The clock is ticking on both these fronts - so why wait? THE NEW MILEAGE RATES ARE HERE! THE NEW MILEAGE RATES ARE HERE! OKAY...NEWS FROM THE IRS ISN'T NECESSARILY ALL THAT EXCITING, BUT YOU DON'T WANT TO MISS OUT ON A SINGLE TAX DEDUCTION YOU MIGHT HAVE COMING. CHECK OUT THIS WEEK'S MORTGAGE MARKET GUIDE VIEW FOR THE DETAILS. |
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We have a quiet week ahead when it comes to economic reports, but whether that's good or bad news remains to be seen. Be sure to look for Thursday's Initial Jobless Claims Report, as last week's numbers came in at 480,000, quite a bit worse than the 455,000 expected and the highest count since mid-December. Last week's Continuing Claims increased slightly to 4.6 million, and remember this...the Continuing Claims number doesn't even account for the nearly 6 million people whose Unemployment benefits have expired, and are now receiving Extended Emergency Unemployment benefits. Also on tap for Thursday is the Retail Sales Report for January. This report is the most-timely indicator of broad consumer spending patterns, and it is important to see in which direction the numbers are moving. And the Treasury will be auctioning $40B in 3-year Notes on Tuesday, $25B in 10-years on Wednesday and $16B in 30-year Bonds on Thursday for a total of $81B. These auctions could move the markets, especially in the face of few scheduled economic reports. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bond prices have been improving of late, but there is tough technical resistance ahead. As always, I'll be watching closely - so give me a call this week if you'd like an update on the market action! |
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New Mileage Rates for 2010 If you drive a car, truck or van for work, you'll want to make sure you know the standard mileage rates that the Internal Revenue Service (IRS) has set for 2010. And remember, these mileage rates are not just used to calculate deductible costs for driving an automobile for business, but also for charitable, medical or moving purposes. New for 2010 As of January 1, 2010, the standard mileage rates are as follows: - Businesses = 50 cents per mile driven
- Medical or moving = 16.5 cents per mile driven
- Charitable organizations = 14 cents per mile driven
Note: The 2010 rates are slightly lower than last year's, due to generally lower transportation costs as compared to a year ago. Make Sure You Qualify Before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously. Additional Option Although the IRS provides the standard mileage rate for ease and convenience, you're not required to use it. If you prefer, you can calculate the actual costs of using your vehicle instead of using the standard mileage rates. Best yet - most people find that they save money on taxes by working with a tax professional. Let me know if you need a referral! |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of February 08 - February 12 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Wed. February 10 | 08:30 | Balance of Trade | Dec | -$35.0B | | -$36.4B | Moderate | | Thu. February 11 | 08:30 | Jobless Claims (Initial) | 2/6 | NA | | 480K | Moderate | | Thu. February 11 | 08:30 | Retail Sales | Jan | 0.4% | | -0.3% | HIGH | | Thu. February 11 | 08:30 | Retail Sales ex-auto | Jan | 0.4% | | -0.2% | HIGH | | Fri. February 12 | 10:00 | Consumer Sentiment Index (UoM) | Feb | 74.8 | | 74.4 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.000% 0 Point 15 Yr Fixed 4.375% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.875% 1/4 Point 5/1 Arm 5.250% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 0 Points 5/1 ARM 3.875% 0 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Jan 25, 2010 --- Vol. 8, Issue 4 |
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"If you are losing a tug-of-war with a tiger, give him the rope before he gets to your arm. You can always buy a new rope." Max Gunther. Such a sweet sentiment...but definitely not one that the markets adopted this week, as both Stocks and Bonds battled back and forth near key technical levels. The markets were closed on Monday in honor of the Martin Luther King, Jr. holiday, but then the Bulls and the Bears in the Bond market spent the first part of the week pushing and pulling Bond prices above and below their 200-Day Moving Average. This level is important because it can often set the stage for price direction for an extended period of time. Bonds were finally able to break above this important level, which was good news for home loan rates. And the war wasn't just being waged in Bonds...the Stock market was fighting some technical battles of its own. The Dow and the S&P both tumbled lower, falling beneath their own 50-day Moving Averages. This is very significant, as neither index has closed beneath their 50-day Moving Average since July of 2009. If Stocks are unable to regain their footing and move above this important Moving Average, we may see a continued slide lower in Stocks, which could benefit Bonds and home loan rates. -----------------------
Chart: Technical Look at the Dow  However, a possible uptick in inflation later this year and an end to the Fed's Mortgage Backed Security purchase program in March are two important factors that will likely cause home loan rates to worsen in the months ahead. While this week's Producer Price Index Report (which measures inflation at the wholesale level) was relatively tame, higher than expected inflation was reported in both the UK and India. Reports out of both countries say that they expect levels of inflation to continue higher, but not just in their own countries...they see it around the world as well. Remember, Bonds and inflation are mortal enemies. If Bonds were Superman...inflation would be Kryptonite. And when inflation does begin to tick higher here, it will send home loan rates higher as well. It's also important to note that the Fed bought $12B in MBS in the latest week, bringing their purchase total to $1.149T, leaving $101B left to purchase before the end of March. If we have not talked yet about your own home loan situation, let's be sure to connect very soon as the current low home loan rate environment may soon be a thing of the past. There was also housing news to note last week, as Housing Starts fell in December, due in part to bad weather throughout the country. However, a look down the road appears more positive, as Building Permits rose significantly in December, to the best level since October 2008. After all the tug of war this week among traders, home loan rates were able to end the week slightly better than where they began. IMPORTANT CHANGES ARE COMING TO A VERY POPULAR HOME LOAN PROGRAM...AND THEY COULD IMPACT YOU OR SOMEONE YOU KNOW. CHECK OUT THIS WEEK'S MORTGAGE MARKET GUIDE VIEW FOR THE DETAILS. |
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Looking ahead, there will be plenty of news and reports this week that could lead to more tug of war in the markets. There will be big news on Wednesday as the Fed releases its policy statement after its regularly scheduled meeting of the Federal Open Market Committee. What to listen for in particular is if the Fed once again comments on their Mortgage Backed Security purchase program, which is slated to end on March 31st. The Fed has previously stated they will not extend the program, despite recent speculation otherwise. I'll be listening closely to see what the Fed has to say. There will be a double dose of housing news this week, with Monday's Existing Home Sales Report and Wednesday's New Home Sales Report. There will also be several important reads on our economy, with Tuesday's Consumer Confidence Report, Thursday's Durable Goods Report - which is a look at consumer and business buying behavior on big ticket items that last for an extended period of time - and Friday's Gross Domestic Product Report, which is the broadest measure of economic activity. It will also be important to keep an eye on Thursday's Initial Jobless Claims Report. Last week's Initial Jobless Claims came in at 482,000, which was significantly worse than expected and reversed the trend of lower numbers we've seen. We need to see Initial Claims below 400,000 per week to see stabilization in the Unemployment Rate. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds were able to end the week above the 200-day Moving Average. I'll be watching closely to see if this trend continues. |
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New Lending Policies Announced by FHA If you were listening to the housing news last week, you probably heard a number of reports about lending changes that were announced by the Federal Housing Administration (FHA). While many of the news reports were confusing, the truth is pretty clear, and isn't as bad as some people may have heard. Overall the measures are intended to help the FHA better manage its risks and strengthen its capital reserves, while still providing home loans to the nation. The good news, as FHA Commissioner David Stevens stated recently, is that "by continuing to provide affordable, responsible mortgage products, FHA will support the housing market's recovery" and "remain the largest source of home purchase financing for underserved communities." What's Changing? If you or someone you know is considering an FHA loan, some of these changes may affect you. Here's a clear, concise rundown of the major changes and what they mean: 1. Increased mortgage insurance. The mortgage insurance premium (referred to as private mortgage insurance by many people) will be increased from 1.75% to 2.25%. This change will add some cost to purchasing a home, but will not overburden consumers since the mortgage insurance is paid over the life of the loan, rather than upfront at closing. 2. New down payment and credit score requirements. According to the new policy, homebuyers who have a credit score of at least 580 may still be able to purchase a home with 3.5% down, but those with credit scores of less than 580 will be required to put down at least 10%. This change is designed to help the FHA balance its risk, while still providing affordable down payments for consumers with a history of good credit and responsibility. 3. Reduced seller concession. Basically, this change means that the person selling the home will now only be able to offer the homebuyer 3% to help defray closing costs, as opposed to 6% under the previous policy. In addition to these changes, the new policies contain a series of new measures aimed at increasing lender enforcement. These changes will become effective on April 5, 2010. The bottom line is that the changes will impact some homebuyers more than others. But in the end, the FHA is still committed to providing affordable home loans. If you're concerned about your credit score or are worried about what these changes may mean to your specific situation, please call or email to schedule an appointment. There are many different programs available for homebuyers, so finding the right plan for you just requires a short discussion about your goals and financial picture. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of January 25 - January 29 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. January 25 | 10:00 | Existing Home Sales | Dec | 6.00M | | 6.54M | Moderate | | Tue. January 26 | 10:00 | Consumer Confidence | Jan | 52.9 | | 53.3 | Moderate | | Wed. January 27 | 02:15 | FOMC Meeting | 1/27 | .25% | | .25% | HIGH | | Wed. January 27 | 10:30 | Crude Inventories | 1/22 | NA | | -0.471M | Moderate | | Wed. January 27 | 10:00 | New Home Sales | Dec | 370K | | 355K | Moderate | | Thu. January 28 | 08:30 | Jobless Claims (Initial) | 1/23 | NA | | 482K | Moderate | | Thu. January 28 | 08:30 | Durable Goods Orders | Dec | 2.0% | | 0.2% | Moderate | | Fri. January 29 | 08:30 | Chain Deflator | Q4 | 1.3% | | 0.4% | HIGH | | Fri. January 29 | 08:30 | Employment Cost Index (ECI) | Q4 | 0.4% | | 0.4% | HIGH | | Fri. January 29 | 09:45 | Chicago PMI | Jan | 56.0 | | 58.7 | HIGH | | Fri. January 29 | 10:00 | Consumer Sentiment Index (UoM) | Jan | 73.0 | | 72.8 | Moderate | | Fri. January 29 | 08:30 | Gross Domestic Product (GDP) | Q4 | 4.5% | | 2.2% | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Point 15 Yr Fixed 4.625% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.875% 1/4 Point 5/1 Arm 5.250% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Points 5/1 ARM 4.125% 0 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Jan 18, 2010 --- Vol. 8, Issue 3 |
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"WHAT DO WE LIVE FOR, IF IT IS NOT TO MAKE LIFE LESS DIFFICULT FOR EACH OTHER?" George Eliot. The current crisis in Haiti certainly puts this sentiment into perspective. For information on how you can help, see the View article below. Last week it was reported that the inflation measuring Consumer Price Index (CPI) for December came in lower than expected. Overall, CPI for all of 2009 was fairly tame. But as you can see in the chart below, the closely watched Core CPI, which strips out volatile food and energy, rose to 1.8% year-over-year in December after hitting a multi-year low of 1.4% in August. -----------------------
Chart: Core Consumer Price Index  So what does this mean for Bonds and home loan rates? Clearly, inflation is tame at the moment...but slowly trending higher. The Fed will be watching this data very carefully in the coming months, as they seek to time perfectly the exit from what is essentially a zero rate environment. The Fed will likely err on the side of keeping the Fed Funds Rate lower for longer than they perhaps should, in order to avoid a "double dip" recession...but that will likely lead to more inflation down the road. Remember, Bonds and home loan rates hate inflation - so home loan rates are likely to trend higher as more inflation creeps into the economy. Speaking of the Fed, they stepped up their Mortgage Backed Security (MBS) buying in the latest week, purchasing $14B in MBS, whereas the most recent prior purchases were around $9.5B. The Fed now has $113B left of their $1.25T allotted commitment, with the buying program set to wrap up on March 31st. The Fed's purchases have helped home loan rates stay historically low - and although there has been some buzz about an extension of the program, it seems unlikely that will come to fruition. When the Fed purchases stop, home loan rates will be very susceptible to moving higher - so if we have not talked yet about your own home loan situation, or if you know of a friend, family member, neighbor or coworker who might like some advice, let's be sure to connect very soon...time is of the essence. The next Federal Reserve Policy Statement will be coming on January 27th, and they have gone out of their way to mention in the last several statements that the MBS buying program will not continue. Count on me to be listening closely when the Fed releases this next Statement, as this will help further gauge what home loan rates have in store. In other news, Retail Sales for December came in well below expectations and were down from the 1.8% increase seen in November. While this suggests weakness in the Retail sector, it has to be taken with a grain of salt, as it is likely that frigid temperatures and snowy conditions throughout much of the country were contributing factors to the decline. Overall, 2009 was a very tough year for retail. Retail Sales for 2009 dropped 6.2% compared with 2008, which was the biggest decline on record, dating back to 1992. There was some good news, however, on the manufacturing front, as the Empire State Manufacturing Index was reported above estimates, indicating manufacturing expansion in New York state and parts of New Jersey and Connecticut. For the week overall Bonds were able to break above important technical levels, and home loan rates ended the week slightly better than where they began. |
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The markets will be closed on Monday in observance of the Martin Luther King, Jr. holiday, but plenty of news will follow later in the week. Wednesday brings more news from the inflation front, with the Producer Price Index (PPI) Report, which measures inflation at the wholesale level. Wednesday will also bring a read on the housing market, with the Housing Starts and Building Permits Report. There's also more manufacturing news ahead on Thursday with the Philadelphia Fed Report. Also in store for Thursday is another look at the weekly Initial Jobless Claims Report...so it's sure to be an interesting week, with a variety of data for the markets to absorb. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates improved last week, largely due to tame inflation numbers and a decline in Stocks. In fact, Bonds were actually able to power through a tough technical "ceiling of resistance" at the 200-day Moving Average...but it remains to be seen if they will hold their gains. I'll be watching closely to see if Bonds and home loan rates can build on their positive momentum in the coming week. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of January 18 - January 22 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Wed. January 20 | 08:30 | Building Permits | Dec | 585K | | 584K | Moderate | | Wed. January 20 | 08:30 | Core Producer Price Index (PPI) | Dec | 0.2% | | 0.5% | Moderate | | Wed. January 20 | 08:30 | Producer Price Index (PPI) | Dec | 0.0% | | 1.8% | Moderate | | Wed. January 20 | 08:30 | Housing Starts | Dec | 580K | | 574K | Moderate | | Wed. January 20 | 10:30 | Crude Inventories | 1/15 | NA | | NA | Moderate | | Thu. January 21 | 08:30 | Jobless Claims (Initial) | 1/16 | NA | | NA | Moderate | | Thu. January 21 | 10:00 | Index of Leading Econ Ind (LEI) | Dec | NA | | 0.9% | Low | | Thu. January 21 | 10:00 | Philadelphia Fed Index | Jan | NA | | 20.4 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 1/2 Point 15 Yr Fixed 4.625% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.875% 1/4 Point 5/1 Arm 5.250% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Points 5/1 ARM 4.125% 0 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. | For the week of Jan 04, 2010 --- Vol. 8, Issue 1 |
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"We will open the book. Its pages are blank. We are going to put words on them ourselves. The book is called Opportunity and its first chapter is New Year's Day." Edith Lovejoy Pierce. And as we begin a New Year, fresh with opportunity - here's what you need to know about the last week of 2009. The holiday shortened week had some fireworks, and not just those ringing in the New Year. The Treasury Department auctioned a whopping $118 Billion in T-Notes last week, and the added supply helped bring on some volatility in Bonds. And although the financial markets in general have been quite volatile of late anyways, the potential for increased volatility is typically greater during a holiday week. This is because trading volume levels decrease, and with fewer traders and investors pushing transactions, it opens the door for exacerbated market moves, as one large trade can cause prices to rise or fall more sharply. In fact, volatility was present through a good part of 2009 - not to mention the last decade. As you can see in the chart below, Stocks experienced a roller coaster ride during 2009, hitting Bear market lows in March...only to soar 60% higher since March 9th. -----------------------
Chart: Dow Jones Industrial Average  Meanwhile, 2009 also brought some of the best home loan rates ever seen in the history of the US, but things have worsened over the last month. This is in part because the Federal Reserve is winding down their Mortgage Backed Security purchasing program...right at a time when there is an increased volume of Mortgage Backed Securities coming to market. So why are there more coming to market right now? It takes about four months for home loan originations to become securities - and summer originations were light, allowing the decreased Fed purchases during the fall to still help handle the flow of Mortgage Backed Securities coming to market at that time. But loan origination volume increased in late summer and early fall, due to lower home loan rates as well as the perceived expiration of the Home Buyer Tax Credit, which has since been extended. This increased volume of home loans are now securitized and hitting the markets, at a time when the Fed is buying less. As with any item, when there is lots of supply - in this case, the increased volume of Mortgage Backed Securities - and diminishing demand - i.e. the Fed buying less and less - Economics 101 tells us that the price of that item will subsequently go down. And as Mortgage Backed Security or Mortgage Bond prices go down, home loan rates go up, which is what we saw happen throughout December. While rates were able to end last week at about the same place as they began the week, they did worsen about .50% from the beginning of December to the end. THE NEW YEAR IS THE PERFECT TIME FOR A FINANCIAL CHECK-UP, SO MAKE SURE TO GET IN TOUCH WITH ME TO SEE IF STILL LOW HOME LOAN RATES COULD BENEFIT YOU OR SOMEONE YOU KNOW. AND SPEAKING OF SMART FINANCIAL DECISIONS, CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR GREAT TIPS ON SAVING MONEY DURING THE COMING YEAR. |
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The first major economic report of the New Year will come on Friday, with the Labor Department's official Jobs Report for December. Last month's Jobs Report showed that only 11,000 jobs were lost in November, despite expectations of 125,000 jobs lost. This marked the least number of jobs lost in nearly two years, since December 2007. In addition, the Unemployment Rate improved to 10.0%, when expectations were for it to remain at the 10.2% level. Remember, though, that we need to create an additional 125,000 jobs each month just to keep up with population growth...so there is still quite a ways to go before we're out of the woods on the employment front. And while last week's Initial Jobless Claims number showed that new Unemployment Claims were reported at the lowest weekly reading since July of 2008, the holidays and large snowfall in many parts of the country may have prevented people from getting out to the unemployment office to file their claims...so this may well have skewed the reading. The bottom line is that the labor market is a key component to our economy's recovery, so both Thursday's Initial Jobless Claims number and Friday's Jobs Report will be important to watch. Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bond prices have been on a worsening trend of late, meaning home loan rates have moved higher. As the New Year begins, remember you can count on me to be watching closely as always - and I look forward to hearing from you or any of your friends, family members, neighbors or coworkers with any questions you might have. |
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"Resolve" to Stop Wasting Money The New Year is the perfect time to take a look at your spending habits and "resolve" to avoid wasting money where you don't have to. Here are some main areas that many of us waste money unnecessarily...and some simple steps to ensure a bright financial 2010. Meals at the Workplace
Working Americans spend an average of $6 when they buy their lunch at work. The average cost drops to $2 when we bring our lunch from home. That's a difference of $4 a day, or $20 a week, or over $1,000 a year. Consider adding this savings to your savings account, and after just a few months you'll really see the difference add up. Utilize the Public Library
By obtaining a library card, you can save on books, magazines, and especially DVD rentals. If you average 3 DVD rentals a month, you're spending approximately $144 a year. That's $144 that could be deposited into your bank account. For every book you check out, find out what it would have cost if you'd bought it. Deposit that amount into your account, too. Don't be Afraid to Ask for Discounts
If you're paying bills or buying items such as airline tickets based solely on the price you're quoted, you could be wasting money. Many companies provide discounts on goods and services but only for those customers who request them. It never hurts to ask so start asking. Save Gas
Consult the owner's manual of your car and learn about the manufacturer's recommendations for optimal gas mileage. Put the suggestions into action and see what happens. After a month, you should be able to see if you're spending less on fuel. Take the savings and stash it away. Sell Your Junk
Come Springtime, go through your closets, garage, and CD collection. Figure out which items you no longer use. You can either hold a garage sale or locate stores which buy and sell used merchandise, and sell the items to them. Do Away with Disposable
From razors and batteries to paper towels and plastic bags, your home is filled with products which are meant to be thrown away. Most of these disposable items have either a permanent or semi-disposable counterpart. Switching over to these more durable items can yield a savings of $4 a week or $200 a year. Get the Most Out of Your Utilities
Many of us are overspending on our utility bills for no other reason than our own apathy. If you haven't already switched over to low-flow shower heads and toilets it's probably time to do so. Also, get into the habit of turning off lights when not in use. Did you know that most utility companies offer a free online energy audit? This way you can see exactly where you're wasting money. Here's to a bright financial future in 2010! |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of January 04 - January 08 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. January 04 | 10:00 | ISM Index | Dec | 54.0 |
| 53.6 | HIGH | | Tue. January 05 | 10:00 | Pending Home Sales | Dec | -3.0% | | 3.7% | Moderate | | Wed. January 06 | 10:00 | ISM Services Index | Dec | 50.5 |
| 48.7 | Moderate | | Wed. January 06 | 10:30 | Crude Inventories | 12/31 | NA | | -1.54M | Moderate | | Thu. January 07 | 08:30 | Jobless Claims (Initial) | 1/02 | 445K |
| 432K | Moderate | | Fri. January 08 | 08:30 | Average Work Week | Dec | 33.2 |
| 33.1 | HIGH | | Fri. January 08 | 08:30 | Hourly Earnings | Dec | 0.2% |
| 0.1% | HIGH | | Fri. January 08 | 08:30 | Non-farm Payrolls | Dec | Zero |
| -11K | HIGH | | Fri. January 08 | 08:30 | Unemployment Rate | Dec | 10.1% |
| 10.0% | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0.25 Points 15 Yr Fixed 4.750% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.875% 0 Points 5/1 Arm 5.250% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Points 5/1 ARM 4.250% 0 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. | For the week of Dec 21, 2009 --- Vol. 7, Issue 51 |
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"ALL GOOD THINGS MUST COME TO AN END..." Or so the popular saying goes. And last week, the Fed reiterated once again that their Mortgage Backed Security (MBS) purchase program...the program that has helped keep home loan rates low for much of the last year...will end on March 31, 2010 as previously stated. Here's the lowdown on what this means, and all the latest news impacting home loan rates and the markets. Last Wednesday during their regularly scheduled meeting of the Federal Open Market Committee, the Federal Reserve kept the Fed Funds Rate unchanged. But history has shown that when the Fed has left rates too low for an extended period of time, there is a price to be paid, via higher inflation. Yet if the accommodation is removed too early, it can derail an already fragile recovery. The Fed continues to walk this tightrope, trying to get it "just right." Along with this decision, the Fed emphasized and reminded that their MBS purchase program will still end on their already revised deadline date of March 31, 2010. Why is this significant? Let's look at the numbers from last week to get an idea. The Fed purchased $16B in MBS in the latest week bringing the year-to-date total to $1.087T. This means there is $163B left to purchase before March 31, which in turn means the Fed will purchase about $11.5B on average each week through the end of the buying program. This is less than half of what the Fed was buying regularly throughout 2009 and a 1/3 less than what the Fed has been buying in recent weeks. So why does this point to higher rates around the corner? When there is lots of supply and diminishing demand, the price of that item will subsequently go down - it's Economics 101. So, when Bond prices start to decrease from the diminishing demand of the Fed's purchases, home loan rates will naturally be likely to increase. Give me a call if you want to see how you can benefit from the current low rate environment...before it becomes too late. In other news, there was mixed inflation data last week, as the Producer Price Index (which measures wholesale inflation) came in significantly higher than expected. However, the Consumer Price Index was reported in line with expectations, signaling that inflation remains low - at least for now. Inflation will ultimately creep back into the economy - and as the arch-enemy of Bonds and MBS - will also contribute to rising interest rates. Housing Starts for November were in line with estimates and, as you can see in the chart below, the housing sector seems to have stabilized after bottoming out at 458,000 Housing Starts in April. -----------------------
Chart: Housing Starts  Meanwhile Building Permits, which are a leading indicator of housing construction, reached the highest level seen in the past year. This is encouraging, and the extension of the Home Buyer Tax Credit should provide an added boost for home sales over the next few months. Bonds and rates were able to improve in the middle of the week and as a result, Bonds and rates ended the week about where they began. THE HOLIDAY SEASON WILL EVENTUALLY COME TO AN END, BUT YOUR HOLIDAY MEMORIES DON'T HAVE TO! CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR GREAT TIPS TO HELP YOU TAKE GREAT HOLIDAY PICTURES. |
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The markets will enter holiday mode later this week, with both the Stock and Bond markets closing early on Thursday and remaining closed all day Friday in observance of the Christmas holiday, but not before several important reports are released. First, we'll get a read on the housing market with Tuesday's Existing Home Sales Report and Wednesday's New Home Sales Report. Tuesday also brings a read on the economy with the broadest measure of economic activity via the Gross Domestic Product Report. There is still more news on Wednesday with the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) Index, found within the Personal Income Report. With last week's mixed inflation news, this will be an especially important report to watch. And Thursday could bring some big news just before the markets close by way of the Durable Goods Report, which gives us an update on consumer and business buying behavior on big ticket items that last for an extended period of time. A look at the job market will come with the Initial Jobless Claims Report. Last week's Initial Jobless Claims and Continuing Claims numbers were higher than expected, showing that the labor market is still struggling. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and rates were able to regain some ground last week. I'll be watching to see if this continues. |
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7 Tips for Taking Perfect Holiday Pictures Over the next week, families and friends from across the country will come together to reminisce, reconnect, and enjoy the warmth of the holiday season. When it's over, only two things will remain: the memories of those celebrations and the photographs that bring those memories to life. Unfortunately, some holiday photos don't turn out quite as vivid or emotional as the moments they depict. But with the 7 simple tips below, you can help eliminate the disappointment of a photo gone wrong. - Look 'em in the eye. One of the best ways to capture the true spirit and emotion of holiday moments is to zero in on the eyes of family and friends. That means holding the camera at eye level and focusing in tightly on the twinkle in their eyes and smiles on their faces. And, when taking pictures of children or even the family pet, don't forget to lower yourself to their level.
- Brighten up the holidays...even when you're outside. One of the most important aspects to consider in any picture is the lighting. Harsh overhead lights can cast odd shadows on a person's face. And bright lights can make a person's wrinkles or subtle flaws stand out more in the picture than they do in real life. To help reduce these negative illusions, try using as much natural light as possible. If you're indoors, ask your friends to move closer to the natural light coming in through a window and turn off your flash to capture the vibrant colors better.
If you're outside, remember that the soft, warm light that occurs during the early morning, late afternoon, and on cloudy days is better than the overpowering mid-day sun. If you must shoot during mid-day, use your flash to help brighten faces and eliminate those unpleasant shadows from the sun. - Keep your distance. When you do need a flash, make sure that you know the optimal distance that your camera's flash can travel. Too often, people make the mistake of standing out of range, which can be the same as using no flash at all. For most cameras, the maximum distance between you and your subject should be approximately 15 feet (or five big steps away). But, just to be safe, you should check your camera's manual or try to stay within 10 feet to make sure your photographs don't turn out dark and dreary.
- Don't center every image. Often, centering the subject can result in a boring or lackluster photo. Instead, try to shift your subject slightly to the left or the right. The empty space that is left in the frame will help draw the eye to the subject and add a quality of balance and interest that a centered photo cannot duplicate.
- Don't just take photographs...direct them. Even if you're just taking a photo of a few people, take a moment to move them around to create interest and fill the frame. Also, don't hesitate to move distracting objects out of the background or to move the subjects to another part of the room altogether.
- Get the red out. Although some cameras come with red-eye reduction features, the best way to eliminate this problem is to stop it before it starts. To do that, have your subject look toward the camera, but not directly at the lens or the flash. So, before you snap the picture, take a moment to say "look here" and point out a spot just below your camera for them to focus on.
- Snap the picture early to capture the action. Most cameras today include a variety of features that are automatically processed before a picture is taken. That means your camera takes an extra second to process the photo and adjust its settings accordingly. So, try to snap the shot a half-a-second early.
With these tips and a little practice, your photographs will capture the vivid colors, emotions, and joy of this holiday season in a way that brings those memories to life every time you look at them. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of December 21 - December 25 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. December 22 | 08:30 | Gross Domestic Product (GDP) | Q3 | 2.7% | | 2.8% | Moderate | | Tue. December 22 | 10:00 | Existing Home Sales | Nov | 6.30M | | 6.10M | Moderate | | Wed. December 23 | 10:30 | Crude Inventories | 12/18 | NA | | NA | Moderate | | Wed. December 23 | 10:00 | New Home Sales | Nov | 440K | | 430K | Moderate | | Wed. December 23 | 10:00 | Consumer Sentiment Index (UoM) | Dec | 73.9 | | 73.4 | Moderate | | Wed. December 23 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 1.4% | HIGH | | Wed. December 23 | 08:30 | Personal Consumption Expenditures and Core PCE | Nov | 0.1% | | 0.2% | HIGH | | Wed. December 23 | 08:30 | Personal Spending | Nov | 0.7% | | 0.7% | Moderate | | Wed. December 23 | 08:30 | Personal Income | Nov | 0.5% | | 0.2% | Moderate | | Thu. December 24 | 08:30 | Jobless Claims (Initial) | 12/19 | NA | | 480K | Moderate | | Thu. December 24 | 08:30 | Durable Goods Orders | Nov | 0.4% | | -0.6% | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 0 Points 15 Yr Fixed 4.375% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.875% 0 Points 5/1 Arm 5.250% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Points 5/1 ARM 4.000% 0 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Dec 14, 2009 --- Vol. 7, Issue 50 |
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"IT'S A RECESSION WHEN YOUR NEIGHBOR LOSES HIS JOB; IT'S A DEPRESSION WHEN YOU LOSE YOURS." Harry S. Truman. Very true words indeed - and last week brought some market action when Fed Chairman Ben Bernanke discussed the recession, commenting that our economic recovery still faces "formidable headwinds." As you can see in the chart below, the current recession we have been in has been the longest in nearly half a century. -----------------------
Chart: Post World War II Recessions  And because negative economic comments or news causes money to flow out of Stocks and into Bonds, Bernanke's words helped Bonds and home loan rates to improve early last week...but these improvements were short lived. Bond prices and home loan rates responded poorly to the Treasury auctions of last week, as the Treasury instruments being auctioned off are in direct competition with Mortgage Backed Securities...and the continual record amounts of supply hitting the market requires record amounts of buying to take place as well. And remember - the Federal Reserve is winding down their Mortgage Backed Security purchasing program, so as they stretch out and ration their remaining purchases through the first quarter of next year, the reduced amount of their buying just adds to the problem. And as with any item, when there is lots of supply and diminishing demand - Economics 101 tells us that the price of that item will subsequently go down. So as Bond prices go down, home loan rates go up - and last week saw home loan rates increase by at least .125% across the board. Also adding to selling pressure on Bonds in the latter part of last week were several bits of good economic news. First, the Retail Sales Report for November was better than expected, marking the third monthly increase over the past four months. It appears that lower prices and good deals are helping to spur some buying activity, though it remains to be seen how this will impact retailers' bottom lines. Consumer Sentiment was also reported quite a bit better than expected. AND SPEAKING OF RETAIL SALES AND CONSUMER SENTIMENT - ARE YOU STILL WONDERING HOW TO WISELY SPEND YOUR HARD EARNED DOLLARS WHILE HOLIDAY SHOPPING THIS YEAR...AND STILL FEEL GREAT ABOUT HAVING GIVEN A GREAT GIFT? CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR GREAT HOLIDAY GIFT IDEAS UNDER $25. |
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Last week may have been a slow one when it comes to economic reports, but the week ahead is full of action, beginning with Tuesday's Producer Price Index (PPI) Report, which measures inflation at the wholesale level. More inflation news immediately follows with Wednesday's Consumer Price Index (CPI) Report. Remember that inflation erodes the value of the fixed income that a Bond provides, so any signs of inflation can cause Bond prices and home loan rates to worsen. Wednesday will also bring a read on the housing market with the Housing Starts and Building Permits Report, as well as the Interest Rate Decision and Policy Statement from the Fed, following the end of their regularly scheduled Federal Open Market Committee meeting. A change in rates isn't expected - but any comments about inflation in the Policy Statement could rattle Bonds and home loan rates. Also important this week is a look at the manufacturing sector, via Tuesday's Empire State Index and Thursday's Philadelphia Fed Report. Manufacturing reports have been all over the boards lately, but a marked improvement in either of these reports could cause Stocks to move higher, and in turn, hurt Bonds and home loan rates. Also in store for Thursday is another look at the weekly Initial Jobless Claims Report. Last week's Continuing Jobless Claims fell to the lowest level since February, and while at first blush this decline would appear to be a good thing, it is likely that the numbers are reflective of people accepting part time or seasonal work that won't last after the holidays. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and rates worsened after last week's Treasury auctions. I'll be watching carefully to see if Bonds and rates can muster an improving rally this week in the face of a heavy news week. |
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Best Holiday Gifts for Under $25 The holiday season can be a strain on your pocketbook. Considering the current economic climate, it may be even more apparent this year than in the recent past. But there are still plenty of inexpensive holiday gifts you can give this year - even for under $25 - that will help ring in the holiday cheer! Godiva Chocolate - Godiva offers a number of chocolate selections for under $25. It's not only a delicious product, but receiving chocolate in a little gold box is about as iconic as receiving jewelry in a little blue box. Visit www.Godiva.com to see the various selections. Bottle of Wine - A bottle of wine is a great gift of holiday cheer. And for $25, you can buy a nice bottle. Christmas Tree Ornament - This gift is obviously contingent on the recipient celebrating Christmas. Nonetheless, it is a thoughtful present that can be kept forever. Depending on the ornament, some can be personalized with engraved messages, as well as the year they were purchased. Lottery Tickets - This is another inexpensive gift you should consider. The idea of scratching off 25 lottery tickets can be a lot of fun. The gift gets even better if a number of the lottery tickets pay off. Tuck them inside a thoughtful card and you're all set. French Press Coffee Pot - Every true coffee lover should have a French Press pot. And even if they already have one, they'll probably enjoy another one to keep in separate locations or to be used simultaneously for larger get-togethers. A Journal and a Pen - One does not have to be a writer in order to find countless uses for a journal and a pen. A Board Game - From single folks to families, board games provide the perfect entertainment at a gathering with friends, or even a quiet weekend night at home. Homemade Gift Basket - Putting together a gift basket for someone allows you to tailor the gift precisely to the interests of the person who's receiving it. Gift basket themes are limitless and can fit into any budget. Bath and Body Gifts - Everyone can use a little bit of pampering from time to time. With the variety of scented lotions and shower gels available today, you're sure to find something within your budget. Times may be tough, but that doesn't mean you need to completely forgo the tradition of holiday gift buying. You just have to be a bit more creative. Happy shopping...and happy holidays. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of December 14 - December 18 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. December 15 | 08:30 | Core Producer Price Index (PPI) | Nov | 0.2% | | -0.6% | Moderate | | Tue. December 15 | 08:30 | Producer Price Index (PPI) | Nov | 0.8% | | 0.3% | Moderate | | Tue. December 15 | 08:30 | Empire State Index | Dec | 25.00 | | 23.51 | Moderate | | Tue. December 15 | 09:15 | Capacity Utilization | Nov | 71.1% | | 70.7% | Moderate | | Tue. December 15 | 09:15 | Industrial Production | Nov | 0.6% | | 0.1% | Moderate | | Wed. December 16 | 02:15 | FOMC Meeting | 12/16 | | | 0.25% | HIGH | | Wed. December 16 | 10:30 | Crude Inventories | 12/11 | NA | | -3.82M | Moderate | | Wed. December 16 | 08:30 | Core Consumer Price Index (CPI) | Nov | 0.1% | | 0.3% | HIGH | | Wed. December 16 | 08:30 | Consumer Price Index (CPI) | Nov | NA | | 0.2% | HIGH | | Wed. December 16 | 08:30 | Housing Starts | Nov | 578K | | 529K | Moderate | | Wed. December 16 | 08:30 | Building Permits | Nov | 570K | | 552K | Moderate | | Thu. December 17 | 08:30 | Jobless Claims (Initial) | 12/5 | 465K | | 474K | Moderate | | Thu. December 17 | 10:00 | Index of Leading Econ Ind (LEI) | Nov | 0.7% | | 0.3% | Low | | Thu. December 17 | 10:00 | Philadelphia Fed Index | Dec | 16.0 | | 16.7 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.000% 0 Points 15 Yr Fixed 4.375% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.875% 0 Points 5/1 Arm 5.250% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 0 Points 5/1 ARM 4.000% 0 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Nov 16, 2009 --- Vol. 7, Issue 46 |
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"A STEP IN THE RIGHT DIRECTION...BUT DON'T PUSH YOUR LUCK." Barbra Streisand obviously wasn't singing about Bond prices or interest rates in her 1980's song. But those lyrics were fitting last week when the Federal Reserve stepped in with more buying of Mortgage Backed Securities (MBS), helping Bond prices recover from news of a weak Treasury Auction. Overall, home loan rates bounced around last week and ended the week very slightly improved. But that said, we can't "push our luck" and think the Fed will continue to step in and help support home loan rates...we have to remember that the Fed is actually winding down exactly this type of buying support. As you can see from the chart below, the Federal Reserve's purchases of MBS peaked at an average of $25 Billion per week back in May - and they are getting closer every day to being done spending their allotment of $1.25 Trillion. Since they announced that their remaining purchases would be rationed out until the end of March 2010 - but that they wouldn't be making any additional purchases beyond the original commitment - the average purchases per week have been moving lower, down to $14 Billion per week so far in November. -----------------------
Chart: Fed's Purchase of Mortgage Backed Securities (Weekly Averages Per Month)  Why is this important? Because home loan rates are based on MBS - so when the Fed agreed to be a big buyer, it helped provide a market and helped keep MBS prices high and home loan rates low. So as the Fed's program wraps up and eventually stops, home loan rates are quite likely to be on the rise. So while rates are still very good, they may not be for long. Let's be sure to talk if you haven't yet explored how the current rate environment might benefit you or someone you know. More employment news arrived, and it is interesting to hear the media and other experts proclaim it to be "all good news". Initial (or First Time) Jobless Claims came in at the lowest reading in 10 months and Continuing Unemployment Claims also fell lower as well - and at first blush, this seems to be very good news. But looking closer, we see that the lower Continuing Claims number was probably the result of unemployment benefits expiring before people could find work - rather than people dropping off of benefits because they found a job. Now that unemployment benefits have been extended by new legislation, we should get a more accurate look at how many people are actually unemployed. SPEAKING OF EMPLOYMENT... IF YOU OR SOMEONE YOU KNOW IS LOOKING FOR A JOB, TAKE A LOOK AT THE SPECIAL MORTGAGE MARKET GUIDE VIDEO VIEW BELOW ON TIPS FOR A SUCCESSFUL JOB INTERVIEW. IN TODAY'S CHALLENGING JOB MARKET, A LITTLE EXTRA PREPARATION MIGHT JUST BE THE KEY TO LANDING THAT POSITION. |
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This coming week is loaded with high-impact economic reports. On Monday, we'll get a glimpse of consumer's pre-holiday spending patterns when the Retail Sales report is released. You may have seen that many retailers have started the sales and specials early this year, as well as reintroducing the "layaway" option for purchases - all designed to help keep this holiday season from being dismal for retailers. Inflation news is also on tap this week, as the Producer Price Index is set for release on Tuesday, with the Consumer Price Index following on Wednesday. Also on Wednesday, we'll get a look at the health of the new construction sector of the housing industry with reports on Housing Starts and Building Permits. Thursday, we could see some volatility in the markets when the Treasury Department announces next week's auctions, which will include offerings of 2-year, 5-year, and 7-year Notes. Remember, these auctions will likely continue to cause volatility, as the Federal Reserve has ended their buying program for Treasuries, and as we discussed, has also now started to scale back their purchases of Mortgage Backed Securities (MBS). As the Fed ramps down and ultimately ends their support of the MBS market at the end of March, watch for home loan rates to rise. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bond prices hit a two-month low on October 26th - which had caused home loan rates to worsen - but Bond prices have since been pushed higher by continued Fed buying and some weak economic data. |
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| 5 Secrets to a Job Interview Earlier this month, the Labor Department reported that 190,000 jobs were lost in October and that the Unemployment Rate has risen to 10.2%. It's always important to be prepared anytime you go on a job interview, but in today's competitive market it is more important than ever. In this week's special Video View, check out a video from www.Kiplinger.com called "5 Secrets to a Job Interview." |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of November 16 - November 20 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. November 16 | 08:30 | Retail Sales | Oct | 0.9% | | -1.5% | HIGH | | Mon. November 16 | 08:30 | Retail Sales ex-auto | Oct | 0.4% | | 0.5% | HIGH | | Mon. November 16 | 08:30 | Empire State Index | Nov | 29.00 | | 34.5 | Moderate | | Tue. November 17 | 08:30 | Core Producer Price Index (PPI) | Oct | 0.1% | | -0.1% | Moderate | | Tue. November 17 | 08:30 | Producer Price Index (PPI) | Oct | 0.5% | | -0.6% | Moderate | | Tue. November 17 | 09:15 | Capacity Utilization | Oct | 70.8% | | 70.5% | Moderate | | Tue. November 17 | 09:15 | Industrial Production | Oct | 0.4% | | 0.7% | Moderate | | Wed. November 18 | 10:30 | Crude Inventories | 11/13 | NA | | NA | Moderate | | Wed. November 18 | 08:30 | Core Consumer Price Index (CPI) | Oct | 0.1% | | 0.2% | HIGH | | Wed. November 18 | 08:30 | Consumer Price Index (CPI) | Oct | 0.2% | | 0.2% | HIGH | | Wed. November 18 | 08:30 | Building Permits | Oct | 580K | | 573K | Moderate | | Wed. November 18 | 08:30 | Housing Starts | Oct | 600K | | 590K | Moderate | | Thu. November 19 | 08:30 | Jobless Claims (Initial) | 11/14 | 504K | | 502K | Moderate | | Thu. November 19 | 10:00 | Index of Leading Econ Ind (LEI) | Oct | 0.4% | | 1.0% | Low | | Thu. November 19 | 10:00 | Philadelphia Fed Index | Nov | 12.0 | | 11.5 | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% 0 Points 15 Yr Fixed 4.375% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.875% 0 Points 5/1 Arm 5.125% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 0 Points 5/1 ARM 3.625% 1 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. The Great American Homeowner ChallengeTM is a trademark of FinishRich, Inc. This trademark is used under license from FinishRich Media, LLC by Wells Fargo Home Mortgage. |
| For the week of Oct 19, 2009 --- Vol. 7, Issue 42 |
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"THE HEAT IS ON." Glenn Frey. While cooler temperatures are beginning to descend on many parts of the country, Bonds and home loan rates are feeling the heat and pressure from several fronts. Here are some details...along with why it's important to act soon to take advantage of current home loan rates, as they may never be seen again. Last week, the Core Consumer Price Index (CPI) was reported higher than expected, indicating that inflationary forces may already be underway. Remember, inflation erodes the value of the fixed return that a Bond provides - therefore, inflation is harmful to Bonds and home loan rates. Just the hint of inflation can cause home loan rates to worsen, which is what we saw last week. -----------------------
Chart: Core Consumer Price Index (CPI)
 And here's a very interesting and important note - when looking at these CPI numbers, it is important to understand the effect that the "Cash for Clunkers" program had on this index. The Cash for Clunkers program was very "creatively" accounted for as a reduction in the sales price of automobiles, which had to have a dramatic effect on lowering the CPI that was reported. Imagine how much higher CPI would have been had this "creativity" not been used. As even more inflationary fears creep into the economy, home loan rates will continue to rise. Also adding pressure to Bonds and home loan rates is the Fed's plan to ration out their remaining purchases of Mortgage Backed Securities. The Fed has purchased around $950B year-to-date out of the $1.25T allotted for the program, which is now set to expire March 31, 2010. This means the Fed will be averaging about $14B a week in purchases, a lot less than $25B or so they had been doing up until recently. And anytime demand for an item slows down...including Mortgage Backed Securities...the price goes down. And in this case, it means that home loan rates will move higher. The bottom line is that the heat is on...and home loan rates are starting to rise already. While home loan rates are still incredibly low, it is clear this won't last much longer - and we may not see rates at these levels again in our lifetimes. Give me a call if you want to discuss your own situation, or if you have a friend, family member, neighbor or coworker who might benefit from some information. In other news, Retail Sales for September fell by 1.5% - and while the numbers were better than expected, they are still dismal at best. In addition, the flood of pre-holiday sales and layaway options that are already hitting - remember, it's still mid-October - also suggests a lack of pricing power for retailers. Stock earnings season continued with some mixed news: There were reasonably strong earnings reports from Intel and JPMorgan Chase, while there were weaker than expected reports from Johnson & Johnson, General Electric and IBM. Bank of America also posted its first loss for the year. After all the week's heat and pressure, Bonds and home loan rates ended the week slightly worse than where they began. FINDING OUT THAT YOUR EMAIL OR ONLINE ACCOUNTS HAVE BEEN COMPROMISED IS ONE PRESSURE-FILLED SITUATION! CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME GREAT TIPS FOR CREATING STRONG PASSWORDS. |
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More inflation news is ahead this week, with Tuesday's Producer Price Index (PPI) Report, which measures inflation at the wholesale level. Also this week, we'll get a double dose of housing news, first with Tuesday's Housing Starts and Building Permits Report and second with Friday's Existing Home Sales numbers for September. Some of the numbers have been looking better in recent months, as buyers move quickly to take advantage of the combination of low home loan rates, discounted home prices, and for first time home buyers, a juicy tax credit that is set to expire soon. Given the state of the job market, Thursday's Initial Jobless Claims Report continues to be an important report to watch. Last week's Jobless Claims fell by 10,000 to 514,000 - and while this was lower than the 520,000 that was expected, it was still an enormous number of people applying for unemployment benefits, which highlights a weak labor market. Also, earnings season continues for Stocks, which could have a big impact on both Stocks and Bonds. The Dow had cracked the psychologically tough level of 10,000...but was unable to hold its ground, and was pressured back lower. Remember: Weak or negative economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong or positive economic news normally has the opposite result. As you can see in the chart below, Bond prices moved lower last week, meaning home loan rates moved higher. As discussed above - home loan rates are headed higher and are unlikely to return to similar levels anytime soon...and perhaps they never will again. Don't miss your opportunity to improve your own home loan situation, or make a suggestion to someone you know that might be in need of some solid advice. |
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Stolen Hotmail Passwords Demonstrate Need for Stronger Passwords By now, you've probably heard that 30,000 passwords for Hotmail and Gmail accounts were stolen earlier this month But did you know that a security group analyzed those passwords and found that the most commonly used password was 123456? If that wasn't bad enough, the second most common password that was used...yep, you guessed it...123456789. In today's electronic environment, that's unbelievable. We no longer live in a world where we can use a simple string of numbers or a child's name as a password. They're just too easy to hack...and the results can be much more devastating than merely finding your emails made public. The problem is that we all have so many passwords. So how do we make strong passwords that we can actually remember for every account? The tips below can help you avoid the most common password pitfalls and even implement a few new ideas that will make your passwords easy to remember...and hard to break! Don't Use a Password that's Easy to Guess There's no way around it...a well-protected password is hard for other people to guess. How do you do that? It's pretty simple really. Just follow this advice: - Use a random string of characters. That means no sequential letters or numbers, like those Hotmail accounts that used 123456!
- Make it looooong. The longer the better--even up to as many as 10 to 14 characters if space allows.
- Switch things up. Use a combination of upper and lower case letters, along with a few numbers mixed in the middle or end.
- Don't use substitute symbols in common words. Using "@" for "a" or "1" for "I" may look good to you, but most hackers are smart enough to break those substitutes rather quickly when the password consists of a common word.
- For that matter, avoid easy targets like words straight out of the dictionary or things like family names and birthdays.
Don't Use the Same Password for All Accounts! Most of us cheat when it comes to passwords. We have trouble remembering our passwords, so we come up with two or three that we can remember and use them everywhere. But...you should avoid the temptation! That's because all of your accounts will be vulnerable if even one account is compromised. The reality is, you need to create and remember multiple passwords--a different one for each account! Fortunately, it's easier than you think. Just follow the steps below. 4 Simple Steps to Memorable, Yet Unique Passwords Good passwords come down to two things: (1) they're easy for you to remember and (2) they're hard for others to break. Here's a sure-fire tip that can help you achieve both! - Think up a phrase. Instead of a common word or family member's name, think up a unique phrase that only you know. For example, you may think up something off the wall such as "I Like Short Hair Too."
- Make it an acronym. In our example, "I Like Short Hair Too" would become ILSHT.
- Add Complexity. Remember those substitutes you're not supposed to use with common dictionary words? Well, you CAN use them with your acronym. For example, "I Like Short Hair Too" can become "1 Like $hort Hair 2" which makes: 1L$H2. You can also use upper and lower letters to make it 1L$h2. The point is to be creative, but in a way that you can easily remember it.
- Make it unique. A password is only really unique if you use it for one account and one account only. So you can't just use 1L$h2 for every account. And, in reality it's still too short. Here's the key to the whole process: Mix in additional letters and numbers that are unique to each account. For example, if you're logging into a "gmail account" you can use the "gm" and "@cct" (for acct) to make: 1L$h2gM@cct. Then, for a Netflix account, you may use: 1L$h2Nf@cct. That way, you're passwords will be hard for others to guess and unique to each account, but also easy for you to remember!
Of course, these are just examples. You'll want to be creative and think up your own acronym and ways to add unique characters for each account. And then keep that little secret to yourself so no one will be able to guess your account passwords. Follow these simple steps and you'll have passwords that are tough to break, unique to every account, and easy to remember. And if you have children in your house who are starting to use passwords for email and IM accounts, teach them these steps to help educate them on the importance of strong passwords - they'll thank you later in life! |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of October 19 - October 23 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. October 20 | 08:30 | Building Permits | Sept | 590K | | 579K | Moderate | | Tue. October 20 | 08:30 | Housing Starts | Sept | 607K | | 598K | Moderate | | Tue. October 20 | 08:30 | Producer Price Index (PPI) | Sept | 0.1% | | 1.7% | Moderate | | Tue. October 20 | 08:30 | Core Producer Price Index (PPI) | Sept | 0.1% | | 0.2% | Moderate | | Wed. October 21 | 10:30 | Crude Inventories | 10/16 | NA | | .334M | Moderate | | Wed. October 21 | 02:00 | Beige Book | | | | | HIGH | | Thu. October 22 | 08:30 | Jobless Claims (Initial) | 10/17 | 517K | | 514K | Moderate | | Thu. October 22 | 10:00 | Index of Leading Econ Ind (LEI) | Sept | 0.8% | | 0.6% | Low | | Fri. October 23 | 10:00 | Existing Home Sales | Sept | 5.38M | | 5.10M | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 0 Points 15 Yr Fixed 4.625% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.875% 0 Points 5/1 Arm 5.250% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Points 5/1 ARM 3.875% 1 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. | For the week of Oct 12, 2009 --- Vol. 7, Issue 41 |
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"LISTEN TO WHAT THE MAN SAID." And those aren't just the words from Paul McCartney's hit song of the same title...they're also words of advice for anyone who's considering buying a home or refinancing. Last week, Federal Reserve Chairman Ben Bernanke said that as the economy heals, the Fed will be very vigilant to protect against inflation. While inflation is not a problem at present...it will most certainly become a problem down the road. So why does this matter if you are considering purchasing or refinancing? Because inflation is the arch-enemy of Bonds and home loan rates, and just the knowledge of it coming has been causing both Bonds and home loan rates to worsen in recent days. Along with the fear of inflation, the Fed's purchasing program of Mortgage Backed Securities is already slowing down, with the end of their buying in sight - and the reduced demand for these Bonds is also driving home loan rates higher. Bottom line: home loan rates are already on the rise, and we won't likely see these low historic levels again. Interest rates are still very near historic lows - George Washington couldn't have gotten a better interest rate - and the opportunity these low rates present is huge for homebuyers or people looking to refinance. If we haven't talked recently about your own home loan situation - or if you have a friend, family member, neighbor or coworker who needs advice - please call or send me an email. There's no time to waste. -----------------------
 On the topic of inflation - Gold has been on a tear higher of late, reaching a record high of $1048 an ounce. Remember that Gold is seen as a "safe harbor" or hedge against a falling Dollar and inflation - as Gold is not likely to lose much value in periods of rising prices. Again, fears of future inflation are pervasive, particularly in light of the massive economic stimulus that has been injected into the US economy...and inflation will drive home loan rates higher. The latest spike in Gold is more likely attributable to the Dollar's recent decline, but both factors are somewhat at play. Also last week, the Initial Jobless Claims Report came in better than expected. According to the report, 521,000 new applications for unemployment benefits were received. That number was lower than the 540,000 that were expected, and marked the fewest number of new claims since the first week in January. However, that good news must be tempered by a look at the big picture...the reality is that despite a better-than-expected number, more than half a million people per week are still applying for new unemployment benefits. That's a sign that the labor market is still very weak. In fact, just last week former Fed Chairman Alan Greenspan also commented that he sees unemployment rising beyond 10%. IN LIGHT OF THE ONGOING WEAK LABOR MARKET, NOW MAY BE A GOOD TIME TO MAKE SURE YOU'RE DOING EVERYTHING YOU CAN TO BE AS PROFICIENT - AND EFFICIENT - AT YOUR JOB AS POSSIBLE. TAKE A LOOK AT THIE MORTGAGE MARKET GUIDE VIEW ARTICLE BELOW FOR HELPFUL INFORMATION ABOUT A BETTER WAY TO EVALUATE YOURSELF AND MAKE IMPROVEMENTS WHERE NECESSARY. |
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Despite the Bond market being closed on Monday in observance of Columbus Day, the Stock market will be open, and the week ahead has plenty of market-moving economic reports on tap. On Wednesday, the Retail Sales Report will be released. This is the most-timely indicator of broad consumer spending patterns, so the markets will be watching to see if it comes in near expectations. Thursday brings us inflation news when the Consumer Price Index (CPI) is reported. After Bernanke's comment last week about the Fed protecting against inflation, the markets will be watching this report closely. On Friday, the Preliminary Consumer Sentiment Index will be reported. This survey is conducted by the University of Michigan and measures consumer attitudes regarding present and future economic conditions. The index rose at the end of September, so the markets will be watching to see if that boost in confidence continued into this month's preliminary report. In addition to the important economic reports described above, industry experts and traders will be paying close attention to the release of the Meeting Minutes from the Fed's most recent Open Market Committee meeting. Once again, any talks about future inflation could move the markets - particularly after Bernanke's comments last week. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see from the chart below, Mortgage Bonds were unable to close above a tough technical ceiling of resistance last week and were ultimately pushed lower, causing home loan rates to rise. |
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Know Thyself: Here's An Easy Way To Get Constructive Feedback That May Save Your Job In These Tough Times By Marty Nemko, Contributing Columnist, Kiplinger.com For years, I've been pushing my clients to get a 360-degree evaluation -- that is, asking their boss, co-workers and supervisees for anonymous feedback on their work. I've also suggested using a 360-degree evaluation as a fast track to personal growth, getting feedback from friends, relatives and romantic partner(s). But to be candid, few of my clients have responded to my exhortations and -- hypocrisy alert -- neither had I. An easy evaluation Because I want to practice what I preach and because -- especially as I get older -- I want to do everything I can to avoid becoming stagnant, I decided to get a 360-degree evaluation. A new Web site, Checkster.com, makes it easy to get anonymous, work-related feedback. I did a five-minute self-evaluation at the site and then entered the e-mail addresses of eight people from whom I wanted feedback (you can choose from three to eight). They included my six most recent career-coaching clients, plus my editors at Kiplinger.com and U.S. News & World Report. Checkster.com sent each person an e-mail inviting him or her to give me feedback anonymously, using the five-minute questionnaire. They were given a week to reply. Five of my six clients responded; neither of my bosses did. Hmmph. (Once three or more people responded, I was notified of who did and didn't respond but was not told which questionnaire corresponded to which person.) What I learned My evaluations confirmed a number of positive aspects about me, which I'll refrain from recounting to prevent suspicious readers from thinking that I devised this column as an opportunity to toot my own horn. On the negative side, I got a few useful nuggets: - Two of my clients said they wished I were more available between sessions. Now that they mention it, I'm guessing that some of my other clients feel that way, too. So from now on, I will more regularly invite my clients to send me e-mail about their progress and any stumbling blocks. I'll invite my needier clients to e-mail me every day with a rating of their progress.
- One of my clients wrote, "Because of his enthusiasm/energy, at times I felt that Marty was not fully in tune with someone who may just work more slowly, calmly." Although feedback from a single source should be taken with a grain of salt, that comment rings true. So I will redouble my efforts to modulate my energy level to accommodate my clients' natural style.
- Another client wrote, "Marty cannot solve all clients' problems, even if they are career-related: Therapy and career counseling are different."
I'm not sure I'll act much on the last one. I know that I can't solve all my clients' psychological problems, and perhaps I should consider referring a few more to therapy. But too often I've seen therapy actually make clients worse. Yes, therapy patients may gain insight into the causes of their problems, but their life is often no better for it. Yet frequently, in just a few minutes, I'm able to help a client identify irrational beliefs and even the childhood roots of those beliefs that have kept the client stuck. Clients are then able to move forward and implement their action plan. How to react The way I responded to the last client's feedback illustrates an important principle. Some people feel the need to act on all feedback, while others reflexively reject all criticism. The sweet spot is to consider feedback and then accept or reject it on its merits. I understand that you may still be reluctant to do a 360-degree evaluation. You could get bad news or criticism in a tough-to-improve-on area -- for example, being told you're "too intense" or you often "don't get it." But it's worth the risk. A 360-degree evaluation is arguably the most potent way to become a better professional and usually a better person. And, especially in this lousy economy, it could even save your job. (See A Career Survival Kit for more tips.) Still unwilling? Here's a second-best solution: Do a self-SWOT. Write down your strengths, weaknesses, opportunities and threats. Now what, if anything, do you want to do differently? More of? Less of? Marty Nemko is a career coach and author of Cool Careers for Dummies. Reprinted with permission. All Contents © 2009 The Kiplinger Washington Editors. www.kiplinger.com |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of October 12 - October 16 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Wed. October 14 | 08:30 | Retail Sales | Sept | -2.0% | | 2.7% | HIGH | | Wed. October 14 | 08:30 | Retail Sales ex-auto | Sept | -0.2% | | 1.1% | HIGH | | Wed. October 14 | 02:00 | FOMC Minutes | Sept | | | | HIGH | | Thu. October 15 | 10:30 | Crude Inventories | 10/09 | NA | | -0.98M | Moderate | | Thu. October 15 | 10:00 | Philadelphia Fed Index | Oct | 12.3 | | 14.1 | HIGH | | Thu. October 15 | 08:30 | ADP National Employment Report | Sept | 0.1% | | 0.1% | HIGH | | Thu. October 15 | 08:30 | Consumer Price Index (CPI) | Sept | 0.2% | | 0.4% | HIGH | | Fri. October 16 | 09:15 | Capacity Utilization | Sept | 69.7% | | 69.6% | Moderate | | Fri. October 16 | 09:15 | Industrial Production | Sept | 0.1% | | 0.8% | Moderate | | Fri. October 16 | 10:00 | Consumer Sentiment Index (UoM) | Oct | 73.5 | | 73.5 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 0 Points 15 Yr Fixed 4.625% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.875% 0 Points 5/1 Arm 5.125% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Points 5/1 ARM 4.000% 1 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. | For the week of Oct 05, 2009 --- Vol. 7, Issue 40 |
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"WORK, WORK, WORK...IT'S A LABOR OF LOVE." The words to Sammy Kershaw's country song sound pretty good right now to a number of Americans...much better, in fact, than the recent employment numbers do. Last week, the Labor Department's Jobs Report didn't show much love for US workers. As you can see in the chart below, the Labor Department reported 263,000 jobs lost in September, which was quite a bit worse than expectations. Compounding the bad news was an up-tick in the unemployment rate to 9.8% as well as downward revisions to prior Jobs Reports, showing an additional 13,000 jobs lost in July and August. Also within the Jobs Report were declines in the Average Workweek and in Average Hourly Earnings, both of which came in below expectations. The shortening of the Average Workweek may be telling us that the amount of people forced to accept part time work is growing. The decline in the Average Hourly Earnings underscores the weakness in the labor market, as it indicates that companies have no pressure to raise wages...particularly with unemployment near 10%. An improvement in Hourly Earnings will likely give us the first sign of labor recovery, so this will be important to watch in upcoming Jobs Reports. -----------------------
Chart: Jobs Report for September  Personal Spending was also reported last week, indicating that spending rose in August at its fastest monthly pace in almost 8 years! And while the news appears to be good for the economy, we have to take it with a grain of salt, since a large part of that spending was the result of the "Cash for Clunkers" vehicle purchasing incentive program, which is no longer in effect. Finally, the housing industry received some good news last week, as Pending Home Sales were up significantly at 6.4%, which was far above expectations. Some of the increase is likely due to folks working fast to take advantage of the $8,000 First-Time Homebuyer Tax Credit, which is currently set to expire on November 30th...and be sure to ask me about this, if you or any of your friends, family members, neighbors or coworkers could benefit from this great incentive. The Case-Shiller Home Price Index also came out last week with news that home prices fell less than expected. The report, which looks at the 20 largest cities, also showed that only 2 cities (Las Vegas and Seattle) experienced price declines when compared to the previous month. Overall, the numbers appear to indicate that the worst of the housing price declines may be behind us. SPEAKING OF THE HOME, IF YOU HAVE AN EXTRA ROOM THAT YOU'VE BEEN CONSIDERING TURNING INTO A HOME OFFICE, TAKE A LOOK AT THE MORTGAGE MARKET GUIDE VIEW ARTICLE BELOW. YOU'LL FIND TIPS TO MAKE SURE YOU GET THE MOST OUT OF YOUR SPACE AND CREATE AN OFFICE THAT'S COMFORTABLE AND EFFICIENT. |
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There are only a few economic reports due out this week, but that doesn't mean it won't be an exciting week. The action kicks off with the ISM Services Index on Monday morning. This report is typically less of a market mover than the ISM Manufacturing Index that came out last week, but with so few reports due out this week, the markets may be watching it closely. Thursday will bring another weekly Initial Jobless Claims report. This weekly report continues to be important to watch as the job market plays a key role in our economic recovery. In last week's report, Initial Jobless Claims increased by 17,000 to 551,000-which was higher than the 535,000 expected. Such huge numbers underscore the weakness in the labor market. Finally, on Friday the Balance of Trade for August will be reported. Expectations are that the trade deficit will be reported at -32.9 Billion. Remember, a negative balance of trade-or a trade deficit-occurs when imports surpass exports. Despite the small number of economic reports, the markets may see some volatility as the Treasury Department auctions off longer-term maturities this week, which are competitive with Mortgage Backed Securities. With the Fed scaling back their purchases of Mortgage Backed Securities, there may be less support for Mortgage Bond prices, so this week's auction could result in more of a wild ride than previous auctions. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. Last week, Stocks closed lower, and the Dow marked its worst week since mid-June. However, as you can see in the chart below, Mortgage Bonds finished the week at levels not seen since May 21, pushing home loan rates to near historic lows. |
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Creating the Perfect Home Office These days, more and more people are working all or part of the time from home, making a home office a necessity. Here are some tips for creating the perfect home office. Layout - There is no bigger mistake you can make than purchasing office furniture or equipment without knowing exactly where you'll be placing it in the room. Before you buy any new furniture, make sure you measure and plot where each piece will go, and don't forget to account for electrical and cable outlets. Furniture - A desk that's roughly 60-inches wide, 30-inches deep, and 29-inches high is not only conducive to work, but it's highly functional in terms of storing the items you use regularly. Your chair should be comfortable, but its primary function should be to promote healthy posture. Good posture will facilitate strong mental focus and will help to alleviate back and neck pain. Lighting - Don't underestimate the importance of quality lighting. If you're lucky enough to have a window in your office, this should serve as your primary light source during the day. Natural light is easy on the eyes and promotes physical energy as well as a good mood. It's also free. Large lights like floor lamps and ceiling lights should have the ability to be dimmed. Also, make sure your desk lamp is equipped with a light bulb that's easy on the eyes. These "soft" light bulbs can be found anywhere, from office supply stores to grocery stores. Storage - Identifying the type of items you need to store, as well as the quantity, will help you to determine an appropriate course of action. Here are a few helpful hints. - Closets are great for storage. Not only can they house filing cabinets, but they are also perfect for storing the items you don't need to access on a regular basis. This helps to maximize the actual workspace of your office.
- Shelving is one of the most versatile options for storage. Shelves can be purchased cheaply and come in a variety of sizes. They are easily installed and take up zero floor space.
- Don't forget about your garage. When it comes to older files or anything that is rarely accessed, a garage can provide ample storage space. Word to the wise, however, the garage can be a dirty place. Plan accordingly by storing paper items in boxes and wrapping equipment in protective plastic.
- Visit a store that's dedicated to home organization. Nowadays it seems like nearly every mall has a store of this kind. You'd be surprised at some of the inexpensive, space-saving storage options available.
Wall Organizers - Dry erase boards, chalkboards, corkboards, and magnetic boards are fantastic tools for keeping clutter off your desk. They are inexpensive and available everywhere in a variety of sizes. There are even combination boards that provide countless options. Cords - Never underestimate the importance of power strips as they provide the ability to plug multiple devices into one outlet. The better power strips also provide surge protection to the equipment that's plugged into them. In addition, cord covers are a great way to not only hide cords but to keep them from becoming a tangled mess. They can be purchased quite cheaply at any electronics store. Décor - Last but not least, once you've got all the necessities in, don't overlook decor. Certificates, diplomas, awards, trophies, and pictures not only complement an office, but they also help to personalize it. Follow these simple steps, and more organization, function, and focus could be right around the corner. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of October 05 - October 09 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. October 05 | 10:00 | ISM Services Index | Sept | 50.0 | | 48.4 | Moderate | | Wed. October 07 | 10:30 | Crude Inventories | 10/02 | NA | | 2.80M | Moderate | | Thu. October 08 | 08:30 | Jobless Claims (Initial) | 10/03 | 550K |
| 551K | Moderate | | Fri. October 09 | 08:30 | Balance of Trade | Aug | -$32.9B | | -$32.0B | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 4.875% 0 Points 15 Yr Fixed 4.375% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% 0 Points 5/1 Arm 5.000% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.125% 0 Points 5/1 ARM 3.750% 1 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Sep 28, 2009 --- Vol. 7, Issue 39 |
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"BE WILLING TO MAKE DECISIONS." General George Patton. And that's exactly what the Fed did last week at their regularly scheduled Federal Open Market Committee meeting. But just what did they decide...and what do their decisions mean for home loan rates? The Fed said they are going to ration out the remaining commitment of Mortgage Backed Security purchases through the first quarter of 2010. There will be no additional buying, but instead, a longer weaning off of the program. There was some speculation about the Fed increasing the amount of buying above the $1.25T committed to, and last week's statement is the Fed's nice way of saying "no." They will not be buying more in quantity, but what they will do is attempt to provide a smoother transition to normal market conditions. It is a given that once the Fed ceases its purchases, that interest rates will climb significantly higher...most likely back above the 6% area. So instead of a hard transition with a large bump in rates, the Fed is attempting to allow rates to gradually rise. This means that waiting to purchase or refinance will very likely mean a higher interest rate. Their decision also means that the Fed's remaining purchases will all be lower in quantity, as the remaining allotment for purchases will be spread over a longer period of time - and additionally, will not necessarily be spread out as evenly as their past purchases - which could lead to more volatility for rates in the near term. In other news, Existing Home Sales and New Home Sales were reported slightly less than expected, but both reports continue to show signs of an improving housing market. The inventory of unsold existing homes fell to its lowest inventory level since April 2007, while the inventory of unsold new homes dropped to its lowest level since January 2007. While some of the decline in new home inventory may be due to builders constructing fewer homes - these reports indicate that the housing market is indeed showing signs of life. Remember, with home loan rates still low - but slated to increase with the Fed's recent decision - as well as a juicy tax credit for First Time Home Buyers that is going to expire on November 30th, it makes sense to get off the fence if you've been considering a purchase or refinance. Or do you have a family member, neighbor, friend or coworker who might benefit from getting some good home loan advice? I'm always glad to get your referrals, so simply let me know who I might be able to help. 
Traders on the New York Stock Exchange are pondering whether Stocks have topped out. | Also in the news, Durable Goods Orders for August unexpectedly fell 2.4% for the largest decline since January. The weaker than expected economic data helped fuel a rally in the Bond market and a late week improvement in home loan rates...while on the other hand, Stocks struggled, particularly with the increasing concerns of Iran's construction of nuclear sites. This kind of geopolitical unrest is troubling on many fronts, and if the situation continues to escalate, it could have a big impact on both the Stock and Bond markets. |
THE DECISION TO BUY A HOME IS ONE OF THE MOST IMPORTANT FINANCIAL DECISIONS YOU CAN MAKE...AND OFFERS GREAT FINANCIAL BENEFITS AS WELL. WITH HOME LOAN RATES LOOKING TO MOVE HIGHER, CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW TO LEARN MORE ABOUT WHY HOMEOWNERSHIP MAKES SENSE. |
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There are several important economic reports in store for this week, the biggest likely being Friday's Jobs Report for September. The Jobs Report for August showed a troublesome 216,000 jobs lost for the month, with prior months revised to show an additional 50,000 jobs lost. In addition, the last report showed that the Unemployment Rate for August jumped to the highest level in 26 years, at 9.7% from July's 9.4%. This is more than double the rate of unemployment from just two years ago and significantly higher than the 5.9% average during the past 40 years. The Unemployment Rate portion of the Jobs Report is often seen as more reliable than the job loss numbers since it is an actual survey, where about 60,000 households are contacted - so this is a particularly important element of the report, as we watch to see signs of an improving economy. Also this week, we have a read on Consumer Confidence coming on Tuesday, while Thursday brings the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) Index, found within the Personal Income Report. Thursday will also bring another weekly Initial Jobless Claims Report, just ahead of the Labor Department's big Jobs Report coming on Friday. It will most certainly be a full week of news, particularly as the aforementioned tension in the Middle East continues to simmer. There is a meeting scheduled for this Thursday with representatives from six nations to discuss this situation further. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds were able to mount a late-week rally through a key "ceiling of resistance", and this move higher for Bonds caused home loan rates to improve. I'll be watching closely to see if Bonds can hold their ground, and continue in this improving direction in the week ahead. |
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Financial Benefits of Home Ownership There are a number of personal and emotional reasons to buy a home. But there are also some strong financial reasons to make the investment. In addition to exceptional home affordability and near historic interest rates, here are some important financial benefits of owning a home: Increased Net Worth: Few things have a greater impact on net worth than owning a home. In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400. A Big Tax Deduction: One of the largest tax deductions available is the amount of interest paid on a mortgage. In fact, a $150,000 home at a 5.50% interest rate can add up to approximately $8,000 in first year's interest. This amounts to a significant savings - effectively reducing the amount of a homeowner's monthly loan payment. Long-Term Appreciation: Over the last few years, home prices have corrected and become more affordable. While that's good news for potential buyers, it has overshadowed the long-term appreciation of a home's value. The reality is, despite market ups and downs, real estate historically appreciates around 6% per year. Even if you calculate a modest appreciation of 3%, a home purchased today for $150,000 should grow in value to $364,000 over 30 years. $8,000 Tax Credit: Don't forget, the government is offering an $8,000 tax credit for first-time homebuyers - or for folks that haven't owned a home during the past three years. However, the program is scheduled to end soon. In fact, the Internal Revenue Service recently reminded potential buyers that they must complete their first-time home purchases before December 1, 2009 to qualify for the special credit, which means the last day to close on a home and qualify for the credit is November 30, 2009. If you're considering purchasing a home or refinancing, this is an ideal time. Call or email me today to discuss your specific situation and how you can benefit from today's market. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of September 28 - October 02 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. September 29 | 10:00 | Consumer Confidence | Sept | 57.0 | | 54.1 | Moderate | | Wed. September 30 | 08:15 | ADP National Employment Report | Sept | -200K | | -298K | HIGH | | Wed. September 30 | 08:30 | Gross Domestic Product (GDP) | Q2 | -1.2% | | -1.0% | Moderate | | Wed. September 30 | 09:45 | Chicago PMI | Sept | 52.0 | | 50.0 | HIGH | | Wed. September 30 | 10:30 | Crude Inventories | 9/25 | NA | | NA | Moderate | | Thu. October 01 | 10:00 | ISM Index | Sept | 54.0 | | 52.9 | HIGH | | Thu. October 01 | 08:30 | Jobless Claims (Initial) | 9/26 | NA | | 530K | Moderate | | Thu. October 01 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 1.4% | HIGH | | Thu. October 01 | 08:30 | Personal Consumption Expenditures and Core PCE | Aug | NA | | 0.1% | HIGH | | Thu. October 01 | 08:30 | Personal Spending | Aug | 1.1% | | 0.2% | Moderate | | Thu. October 01 | 08:30 | Personal Income | Aug | 0.1% | | 0.0% | Moderate | | Thu. October 01 | 10:00 | Pending Home Sales | Aug | NA | | 12.9% | Moderate | | Fri. October 02 | 08:30 | Average Work Week | Sept | 33.1 | | 33.1 | HIGH | | Fri. October 02 | 08:30 | Hourly Earnings | Sept | 0.2% | | 0.3% | HIGH | | Fri. October 02 | 08:30 | Non-farm Payrolls | Sept | -188K | | -216K | HIGH | | Fri. October 02 | 08:30 | Unemployment Rate | Sept | 9.8% | | 9.7% | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.000% 0 Points 15 Yr Fixed 4.500% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 5.750% 0.25 Points 5/1 Arm 4.750% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Points 5/1 ARM 3.750% 1 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Sep 07, 2009 --- Vol. 7, Issue 36 |
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I hope you and your family enjoyed the Labor Day holiday. And, I sincerely hope you have been enjoying your complimentary subscription to the MORTGAGE MARKET GUIDE WEEKLY. Due to the holiday weekend, the next full issue will arrive on Monday, September 14. In the meantime, check out the special article below from Every Learner about the history of Labor Day and why we celebrate it today. This a great article that can be shared with your family, friends, and associates as we celebrate this unique holiday, so please feel free to forward this email on to them. I am pleased to provide this timely article to you as well as weekly insights into the mortgage and housing industries through the MORTGAGE MARKET GUIDE WEEKLY. If you feel that any of your clients, friends, family, or associates would benefit from keeping up to date on market and economic trends in this easy-to-read format, please let me know, and I will be more than happy to add them free of charge. Best wishes to you this holiday weekend. And remember, if you need any assistance at this time, just give a call. |
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LABOR'S DAYS PAST America's Labor Day may be summer's last hurrah, but labor's days past were no picnic. A few generations ago, American working men and women (and often children, too) struggled just to get weekends off--let alone a long one. A few generations ago, people died when labor struggled. Example: the Pullman railway strike of 1894. "I Owe My Soul to the Company Store" Just south of Chicago, the town of Pullman was literally owned by George M. Pullman, manufacturer of the Pullman sleeping car used by railroads. Company brochures painted the town as a workers' paradise, "where all that is ugly and discordant and demoralizing is eliminated, and all that inspires to self-respect is generously provided." In reality, the company town was just that, run by and for the company as a moneymaking venture. One worker said, "We are born in a Pullman house, fed from the Pullman shop, taught in the Pullman school, catechized in the Pullman church, and when we die we shall be buried in the Pullman cemetery and go to the Pullman hell." "There Is Nothing to Arbitrate" When depression struck America in 1893, Pullman slashed wages 25 percent, without reducing rents at company houses or prices at the company store. Some 5,000 workers and their families sank deep into the company's debt. Finally, in May 1894, the workers went on strike. Pullman closed the plant and rebuffed all requests for arbitration. "There is nothing to arbitrate," he said. Stymied, the union called for a boycott of Pullman cars. Beginning June 26, switchmen refused to attach Pullman cars to trains. When railway officials fired the men, trainmen everywhere walked off the job. Railroad traffic across the country ceased. Railway officials turned to the federal government for help, and got it in spades. The U.S. attorney general, a former railway lawyer, convinced the federal courts to issue a sweeping injunction against all strike activity, arguing that the strikers had formed an illegal conspiracy in restraint of trade under the Sherman Anti-Trust Act, a law passed, ironically, to combat big business. On July 4, 1894, federal troops descended on Chicago to enforce the injunction. Out of "Pullman Hell" In the powder-keg atmosphere that followed, soldiers shot into crowds trying to stop trains, and mobs set hundreds of freight cars alight. The strike collapsed. More ominously for workers, though, companies learned to use injunctions from business-friendly courts as a weapon against labor. One injunction threatened to arrest anyone "inducing or attempting to induce.any person or persons to abandon the employment of...railway companies." Yet even as the Pullman strike crumbled, the political winds began to shift. In fact, a federal commission called to investigate the incident blamed the government "for not adequately controlling monopoly and corporations, and for failing to reasonably protect the rights of labor." A new, Progressive era was born out of labor's pains. Eventually, victories would come: the 8-hour workday, the 5-day workweek, improved working conditions, child labor laws, collective bargaining rights--even a national Labor Day, approved by Congress the same year as the Pullman strike. --By Michael Himick This article was provided to you through collaboration with Every Learner. To learn more, play quizzes, and read additional articles, visit http://everylearner.com and get a one-month membership at no cost to you. Reproduced with permission. Copyright c 2002-2009 Every Learner, Inc. All rights reserved. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of September 07 - September 11 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Wed. September 09 | 10:30 | Crude Inventories | 9/04 | NA | | -372K | Moderate | | Wed. September 09 | 02:00 | Beige Book | | | | | Moderate | | Thu. September 10 | 08:30 | Jobless Claims (Initial) | 9/05 | 556K | | 570K | Moderate | | Thu. September 10 | 08:30 | Balance of Trade | Jul | -$27.0B | | -$27.0B | Moderate | | Fri. September 11 | 10:00 | Consumer Sentiment Index (UoM) | Sep | 67.3 | | 65.7 | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Points 15 Yr Fixed 4.750% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 6.250% 0 Points 5/1 Arm 5.250% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Points 5/1 ARM 4.000% 0 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Aug 31, 2009 --- Vol. 7, Issue 35 |
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"I DON'T KNOW WHY I GO TO EXTREMES." Billy Joel. Last week, Bonds went to the extremes of their trading range, battling tough layers of technical resistance as they attempted to improve. Let's take a closer look, and understand the news of the week. There was good news on the inflation front as the Federal Reserve's preferred inflation gauge, the Core Personal Consumption Expenditure Index (PCE), indicated that inflation remained tame last month. Generally tame inflation is a good sign for Bonds - but there is still concern, as inflation is certainly coming...it's just a matter of when. -----------------------
Chart: Core Personal Consumption Expenditure Index  As part of that same report, Personal Income and Spending were both reported inline with expectations. Interestingly enough, consumer spending has now risen three months in a row. However, this needs to be taken with a grain of salt, as this boost comes on the heels of the Government's "Cash for Clunkers" program, which likely boosted spending statistics. Until the labor market stabilizes, we won't likely see a meaningful pickup in consumer spending. Speaking of the consumer, the Consumer Sentiment Index was also reported in line with expectations. There was also more good news on the housing front last week. The Case-Shiller Home Price Index showed home prices rose for the second straight month while New Home Sales surged 9.6% in July from June's reading, signaling that the housing market is stabilizing. Adding to the positive tone of the report was a drop in inventories, which now stands at a 7.5-month supply from last month's 8.8 month reading. Keep in mind that some of the current buyers are adding a bit of what may be an artificial boost to the housing numbers, as they normally would have purchased in 2010 but have moved up their buying decisions to take advantage of tax credits and historically low rates. Let me know if you would like more information on these time-sensitive tax credits. It's also important to note that the revised second Quarter Gross Domestic Product Report showed that the economy has now contracted for four consecutive quarters for the first time since the Great Depression. This is another area to watch in the coming months as we gauge the pace of recovery. Remember, positive economic news typically causes money to flow from Bonds to Stocks, causing Bonds and home loan rates to worsen. However, even with the pressure of more supply from last week's Treasury auctions, Bonds and home loan rates were able to hold on to some improvements and end the week very slightly better than where they began. SITTING IN A PLANE ON THE TARMAC FOR HOURS IS AN EXTREME SITUATION NONE OF US WANTS TO EXPERIENCE! CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME GREAT INFORMATION ON PASSENGER RIGHTS. |
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Friday will be a big day this week, and not just because people will be getting ready to celebrate the Labor Day Holiday. The Labor Department's Jobs Report for August will be released at 8:30am ET. July's report showed glimmers of hope for an improving job market: 247,000 jobs lost in July versus economists' expectations of 328,000 jobs lost, the smallest loss since August 2008. Even better, the Unemployment Rate dropped to 9.4%, from the prior month's reading of 9.5%, which broke a streak of 9 straight monthly increases. It will be important to see if these trends continue. Speaking of the job market, it will also be important to keep an eye on Thursday's weekly Initial Jobless Claims Report. The recent trend of higher than expected Claims is disappointing after what appeared to be a steady decline in Claims earlier this summer. We'll want to take notice on Wednesday of the Meeting Minutes from the latest Federal Open Market Committee meeting. Any comments regarding future inflation could move the markets. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds and home loan rates faced an extremely tough triple layer of resistance at the end of last week. With no Treasury auctions ahead this week, I will be watching closely to see if Bonds and rates can bust through this resistance and improve any further. |
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Stranded on the Tarmac...What Should You Do If It Happens to You? Earlier this month, a Continental Airlines flight stranded passengers on the tarmac for 6 hours. A couple weeks after that, passengers on a Sun Country flight also sat on the tarmac for a grueling 6 hours. For proof that these aren't isolated incidents, you only have to look back in history to similar situations. In 1999, Northwest Airlines stranded a plane on the tarmac for 8 hours. American Airlines also stranded passengers for 8 hours in 2006. In 2007, JetBlue held passengers on the tarmac for 11 hours. In many of these cases, passengers were stuck on planes with no food or water-not to mention terrible odors coming from the cramped airplane bathrooms. But what can you do if you're on a flight that gets stranded on the tarmac? The information below describes what you can do to be prepared and make sure your voice is heard. Know Your Rights As a result of long delays years ago, the Air Transport Association-which includes Delta, United, Continental, Southwest, and other airlines as members-released a Customer Service Plan stating that airlines will: - Notify passengers of known flight delays and cancellations
- Meet customers' essential needs during long on-aircraft delays
- Allow reservations to be held or tickets to be refunded within 24 hours of purchase
- Be more responsive to customer complaints
The details of the self-governed Customer Service Plan should be posted on each airline's website. So, before you head to the airport, take a minute to review the airline's specific details regarding this plan. You can check out the Air Transport Association's website for links to specific airlines. If the airline you're flying on isn't listed on that website, you may be able to find a customer's bill of rights on the corporate website. For instance, JetBlue offers a detailed bill of rights on its website for customers. What Can You Do? The national debate is gaining momentum and now's the time to make sure your voice is heard. There are a number of ways that you can join the discussion. You may want to join the effort to put more stringent rules onto the law books. For example, the Coalition for Airline Passenger's Bill of Rights has proposed a set of rights to be written into law, including a requirement that airlines "establish procedures for returning passengers to terminal gate when delays occur so that no plane sits on the tarmac for longer than three hours without connecting to a gate." You can view the proposed Bill of Rights on FlyersRights.org. In addition, you can sign a Petition for the Airline Passenger Bill of Rights. You can also contact your Senators and Representative in Congress to make sure they take this issue seriously and work to protect airline passengers' rights. If you don't know how to contact your Senators and Representative, you can quickly find their names, telephone numbers, and websites by typing your zip code into the Congressional Directory on CongressMerger.com. Finally, if you do experience a horror story on the tarmac, you can submit a complaint form to make sure the incident is recorded. Be Prepared Before You Fly Before you get on your next flight, visit FlyersRights.org to download and print two important documents that you can carry on the plane. The first document is the Emergency Kit Document, which lists items you should have handy on your next flight. The second document is the Stranded Passenger Survival Guide, which features information on what you can do if your plane is stranded on the tarmac for an unreasonable amount of time. It all comes down to taking some time before you fly to know your rights, be prepared, and take part in the conversation. Have a safe, comfortable flight. |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of August 31 - September 04 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Mon. August 31 | 09:45 | Chicago PMI | Aug | 47.2 | | 43.4 | HIGH | | Tue. September 01 | 10:00 | ISM Index | Aug | 50.2 | | 48.9 | HIGH | | Wed. September 02 | 08:15 | ADP National Employment Report | Aug | -246K | | -371K | HIGH | | Wed. September 02 | 08:30 | Productivity | Q2 | 6.1% | | 6.4% | Moderate | | Wed. September 02 | 10:30 | Crude Inventories | 8/28 | NA | | +128K | Moderate | | Wed. September 02 | 02:00 | FOMC Minutes | 8/12 | | | | HIGH | | Thu. September 03 | 10:00 | ISM Services Index | Aug | 48.0 | | 46.4 | Moderate | | Thu. September 03 | 08:30 | Jobless Claims (Initial) | 8/29 | 570K |
| 570K | Moderate | | Fri. September 04 | 08:30 | Average Work Week | Aug | 33.1 | | 33.1 | HIGH | | Fri. September 04 | 08:30 | Hourly Earnings | Aug | 0.1% | | 0.2% | HIGH | | Fri. September 04 | 08:30 | Non-farm Payrolls | Aug | -225K | | -247K | HIGH | | Fri. September 04 | 08:30 | Unemployment Rate | Aug | 9.5% | | 9.4% | HIGH |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.250% 0 Points 15 Yr Fixed 4.750% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 6.250% 0 Points 5/1 Arm 5.250% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.375% 0 Points 5/1 ARM 4.125% 0 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events |
| For the week of Aug 24, 2009 --- Vol. 7, Issue 34 |
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"IF YOU BUILD IT...THEY WILL COME." And while that line from the movie Field of Dreams may have referred to a baseball field, there are some small signs that it could perhaps refer to the housing market once again before too long. The housing market continues to show signs of stabilization, and although home prices are not about to spike higher, the decline certainly seems to have subsided. Existing Home Sales came in better than expectations, reaching their highest level in two years, as you can see in the chart below. -----------------------
Chart: Existing Home Sales in July  And while the inventory of unsold homes remains lofty, it was reported at its best level in a year. In addition, while Housing Starts and Building Permits both came in slightly below expectations, they did rise in July - another sign of stabilization in the housing market. New Home Sales data will come out this Wednesday, so indeed we will soon find out if home buyers are coming out to buy those new built homes. With home loan rates still at exceptionally low levels - it presents a great opportunity to buy. Do let me know if you or one of your friends, family, neighbors or coworkers would benefit from learning more about buying a home in today's market. On the wholesale inflation front, the Labor Department reported that the Producer Price Index (PPI) fell more than expected. However, the Core PPI - which strips out volatile food and energy prices - was inline with expectations. In the past year the Overall PPI has dropped by a record -6.8%...this going back to 1947, when data was first collected on PPI. This decrease in wholesale prices is certainly reflective of the recession, but also points to the power of the cost reductions through technology and productivity gains. Remember, inflation is the arch enemy of Bonds and home loan rates. While it's good news that inflation is not currently an issue, with an unprecedented amount of government spending, no one really knows what the full impact will be down the road. This will be something to watch for in the weeks and months ahead. The job market also continues to be something to watch. Initial Jobless Claims were reported at 576,000, which was a bit higher than expected, particularly after a string of better-than-expected reports recently. Claims readings will need to be in the low 400K's before the Unemployment Rate can stabilize and start to improve.so we have a ways to go. Although not all the news of the week was necessarily positive, Stocks found ways to take a ride higher, finishing last week on the plus side and at the highest levels so far this year. The Dow surged ahead by 155 points closing at 9,505, the S&P gained 18 points to 1,026 while the Nasdaq rose 31 points ending at 2,020. But Bonds and home loan rates were in turn under pressure, and found it hard to maintain any positive momentum. And with more Treasury auctions scheduled for next week - which have not been overly friendly for Bonds and home loan rates - the pressure could increase. Let me know if you have any questions about your own home loan situation, and how I might be able to help you. EVEN THE MOST WELL-BUILT CAR WILL BREAK DOWN IF IT'S NOT TAKEN CARE OF PROPERLY - AND THESE DAYS, IT PAYS TO TAKE A FEW STEPS TO KEEP YOUR CAR OUT OF EXPENSIVE REPAIR SHOPS. CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME GREAT TIPS TO MAKE YOUR CAR LAST. |
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Consumers are in the news this week, as both the Consumer Confidence report and the Consumer Sentiment Index will be reported. Last month, Consumer Confidence dropped to a reading of 46.6 from 49.3 in June. This Tuesday, we'll see if it can climb back to expectations of 48.0. Then on Friday comes the Consumer Sentiment Index, which dipped down a bit last month. Although consumer sentiment does not always correlate exactly with consumer spending, the markets will be watching to see if this month's reading brings any good news about the consumer's mindset and outlook. Speaking of consumer spending, we'll get a look at that this week as well, when the Personal Income and Spending report comes out on Friday. Personal Spending is expected to be reported at 0.2%, which would be down slightly from last month's reading of 0.4%. Gross Domestic Product and Durable Goods Orders are also on tap this week. Last month's Durable Goods Orders report gave a mixed read on the economy. The headline number came in a bit weaker than expected and was the worst reading since January. However, when stripping out transportation orders, Durable Goods Orders actually rose better than expected. This month's report should give the markets a better idea of if the economy is beginning to stabilize. Friday will also bring a look at inflation via the important Personal Consumption Expenditure (PCE) Index - which happens to be the Fed's favorite gauge of inflation. With concern growing about how extensive inflation could be down the road, this is an especially important one to watch. Additionally, since inflation is the archenemy of Bonds and home loan rates, this report could be a market mover at the end of the week. Mixed in with all these reports will be another round of Treasury auctions, which could cause volatility for Bonds and home loan rates on Tuesday, Wednesday and Thursday, depending on how they're received. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Mortgage Bonds traded somewhat sideways after two prior weeks of dramatic volatility, but Bonds and home loan rates remain volatile overall. So again, please reach out to me to discuss your own home loan situation - I'm always glad to hear from you, and together we can determine if there are any changes that could be made for the benefit of your own financial circumstances. |
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5 Ways to Make Your Car Last Labor Day is fast approaching, which means many of us may be heading out on our last road trip of the summer. With this in mind, here are some great tips to keep your car in great shape while you are on the road...and any time of year. Your Battery... It's important to keep your car battery at full charge since this will extend its lifetime. Avoid using your radio, headlights, interior lights or other accessories when your engine is off. In addition, if you don't drive your car regularly, you can use an automatic "trickle charger" which is connected to your car battery via cables and plugged into an electrical outlet in your home to charge the battery. Trickle chargers can be purchased at most auto-part stores for less than $50. Your Gas Tank... Keep your gas tank as full as possible at all times, and never let the level fall below half a tank. This is not solely to keep you from running out of gas! Most gas tanks are made of metal, which means a partially empty tank could rust, causing rust particles to flake off and clog fuel lines and filters. And while this could take years to happen, if you want to make your car last, you want to do everything possible to save yourself from a costly fuel system repair down the road. Your Tires... It's so important to keep your tires properly inflated, since underinflated tires not only hurt gas mileage but also cause your tires to wear out faster. Most new cars have built in pressure monitors, which makes checking your tire pressure easy. For older cars, check tire pressure with a handheld gauge when the tires are cold (i.e. haven't just been driven on) at least every two weeks. Add air whenever the tire pressure is below the car manufacturer's recommended level (visit your carmaker's Web site for this information or look in your owner's manual). Your Oil... Having regular oil changes is one of the most important ways you can make your car last. Why? Because oil captures contaminants that can contribute to your car's wear and tear, and the less often you change your oil the more these contaminants build up. Make sure you change your oil at the recommended time and never go longer than one month or several hundred miles past that recommended point without having your oil changed. Your Clutch... While it's normal for a clutch to wear down during the course of regular use, there are several things you can do to extend your clutch's lifetime. And since a clutch can cost $1,000 (or more) to replace, these steps can definitely come in handy. First, change gears as smoothly as possible to minimize friction. Also, try to anticipate traffic flow and signals so you can maintain momentum instead of having to constantly shift out of a full stop in first gear. This will also help minimize the wear and tear on your clutch. Now you can see why being an alert driver isn't just important for safety reasons! Use these tips so you're spending less time and money at the repair shop...and more time heading somewhere fun! |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of August 24 - August 28 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. August 25 | 10:00 | Consumer Confidence | Aug | 48.0 | | 46.6 | Moderate | | Wed. August 26 | 08:30 | Durable Goods Orders | Jul | 3.2% | | -2.5% | Moderate | | Wed. August 26 | 10:00 | New Home Sales | Jun | 390K |
| 384K | Moderate | | Wed. August 26 | 10:30 | Crude Inventories | 8/21 | NA | | -8.40M | Moderate | | Thu. August 27 | 08:30 | Gross Domestic Product (GDP) | Q2 | -1.4% | | -1.0% | Moderate | | Thu. August 27 | 08:30 | Chain Deflator | Q2 | 0.2% | | 0.2% | Moderate | | Thu. August 27 | 08:30 | Jobless Claims (Initial) | 8/21 | 565K | | 576K | Moderate | | Fri. August 28 | 08:30 | Personal Income | Jul | 0.1% | | -1.3% | Moderate | | Fri. August 28 | 08:30 | Personal Consumption Expenditures and Core PCE | Jul | 0.1% |
| 0.2% | HIGH | | Fri. August 28 | 08:30 | Personal Consumption Expenditures and Core PCE | YOY | NA | | 1.5% | HIGH | | Fri. August 28 | 10:00 | Consumer Sentiment Index (UoM) | Aug | 64.8 | | 63.2 | Moderate | | Fri. August 28 | 08:30 | Personal Spending | Jul | 0.2% | | 0.4% | Moderate |
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Conforming >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.375% 0 Points 15 Yr Fixed 4.750% 0 Points Jumbo > $417,000 up to 80% LTV up to $2,000,000!! 30 Yr Fixed 6.375% 0 Points 5/1 Arm 5.375% 0 Points FHA/VA >$250K & </= $417K – (if < $250K add 1 point discount & lower rate 1/8th) 30 Yr Fixed 5.500% 0 Points 5/1 ARM 4.250% 0 Points As with all rate quotes: these quotes are basic and are subject to change with specific parameters of each specific loan and with market conditions. APR will be furnished upon actual review and input of an application with client. These quotes are only being provided as a convenience to agents that have requested the above and are provided for their use only as a market barometer. And as such, these quotes are only for the use of real estate professionals and are not for the use of individual clients. Thank you, Peter Pritchard
Home Mortgage Consultant
Wells Fargo Home Mortgage
C7433-021
200 W College Dr
Durango, CO 81301
(970) 385-9362 Tel
(800) 540-1398 Toll-free
(866) 617-1351 Fax
Peter.W.Pritchard@wellsfargo.com
www.wfhm.com/wfhm/peter-pritchard
As founding sponsor of The Great American Homeowner ChallengeTM, Wells Fargo Home Mortgage has formed an alliance with #1 bestselling author and financial coach, David Bach. “Nothing you’ll ever do in your lifetime is likely to make you as much money as buying a home and living in it.” Bach me for details! Or visit www.wellsfargo.com/challenge for details and a list of events. |
| For the week of Aug 10, 2009 --- Vol. 7, Issue 32 |
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Heigh Ho, Heigh Ho, It's Off to Work We Go! If ever there was a week to sing that old Disney® song, it was last week when Americans received some good employment news. Despite a worse-than-expected ADP National Employment report - which isn't known for its accuracy - the Initial Jobless Claims report came in on Thursday with some good news. According to the report, Americans filing for unemployment benefits came in at 550,000, versus the 580,000 expected. In addition, the four-week moving average declined for the sixth consecutive week. The markets received more evidence of an improving job market on Friday. The Labor Department reported 247,000 jobs lost in July versus economists' expectations of 328,000 jobs lost. As you can see in the chart below, this is down pretty sharply from June's lower, revised 443,000 jobs lost and the smallest loss since August 2008. Even better, the Unemployment Rate dropped to 9.4%, from the prior month's reading of 9.5%. This reading broke a streak of 9 straight monthly increases and gave a lot of credibility to the good news in the job market. -----------------------
Chart: US Non-Farm Payroll (jobs losses shown in thousands) 
The employment news is good news for the economy because it may signal that the worst recession in our lifetime could be ending. That said, the Obama Administration agreed on Friday that we're seeing the light at the end of the tunnel, but cautioned that the country still has a lot further to go and that the US will not have a true recovery as long as job losses continue. A stronger job market can also signal improvement in the housing market. We saw indication of that last week as the Pending Home Sales Index came in at 3.6%, which was much better than the 0.7% that was expected. The National Association of Realtors also reported that Pending Home Sales rose in June for the fifth straight month, fueled by low home loan rates and bargain home prices. Overall, the news was a strong indication that the housing market may be looking to improve. SPEAKING OF IMPROVEMENT - IF YOU ARE LIKE MOST PEOPLE, YOUR COMPUTER COULD ALSO USE SOME IMPROVEMENT. CHECK OUT THE MORTGAGE MARKET VIEW BELOW FOR 8 SIMPLE TIPS TO BOOST YOUR COMPUTER'S PERFORMANCE AND PERHAPS SQUEEZE A FEW MORE MONTHS OUT OF YOUR CURRENT MACHINE, RATHER THAN SHELLING OUT MONEY FOR NEW HARDWARE. Overall, the economic news helped boost Stocks, as the Dow gained 114 points to close the week at its highest level of the year. The economic news and increase in Stocks last week, however, put pressure on Bonds, which ended the week lower, putting upward pressure on home loan rates. |
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The Retail Sales Report comes out this Thursday, giving us our first picture of consumer spending for the month of July. Last month's report came in better than expectations at 0.6%, but that number was slightly skewed by the high gasoline station sales. This month's reading is expected to come in at 0.4%. With this report, we will see, among other things, how much impact the government's Cash for Clunkers program has had on the retail picture. Another big mover this week could be the Consumer Price Index, which is due out on Friday. Last month's report showed that the cost of living in the US rose more than forecast, due largely to a jump in energy costs. Overall, core inflation remained in the Fed's comfort zone, but that didn't stop inflation concerns from becoming a hot topic. And for good reason - when lenders see changes in inflation or even anticipate a rise, they may increase their interest rates to make up for the losses they expect. With concerns already out there, lenders and investors will be watching this report closely. In addition to these reports, the Treasury's record auction of $75 Billion worth of 3-year and 10-year Notes could shake things up. The markets will definitely be paying attention to how the auction is received. Why? Let's look at it this way, the flood of auctions lately has been like an all-you-can-eat buffet of Treasury securities - as fast as the offerings can be bought, the Treasury keeps refilling the bowls with a seemingly endless amount of supply. In the end, investor appetites may slow down as more and more supply just keeps on coming. Should that happen, higher rates may be needed to induce further buying. I will keep an eye on this situation this week and keep you posted. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Mortgage Bonds traded sharply lower due to strong Pending Home Sales, the announcement of another Treasury auction, and better-than-expected employment news. |
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8 Tips to Improve Your Computer's Performance It's hard to believe that in just a few short weeks, the majority of schools across the country will be back in session. No matter how much you and your family have used your computer this summer, now is a great time to make sure your desktop of laptop is in top shape for the school year. Here are 8 tips to help improve your computer's performance and save you from the unexpected expense of needing to replace a computer that stops working at optimal levels. - Purchase a Quality Antivirus Program: When you purchase antivirus software, it is important to make sure that, in addition to virus protection, it also protects against spyware and adware. While viruses have the ability to wipe out a computer, the spyware and adware can slow your machine to a snail's pace and compromise your personal information. Be sure to keep your software current by downloading any updates. Also, remember to renew your subscription every year.
- Perform Your Windows Updates: Your computer will periodically instruct you that there are available Windows updates. It is important to perform these updates, as many will pertain to both computer security and overall operations. You can also set Windows to automatically update for you.
- Use Your Windows Firewall: Newer versions of Microsoft Windows (including most versions available in the last 10 years) come equipped with a personal firewall, which can protect your personal network from any outside networks. But it only works if it is turned on. On newer versions of Windows, you can access your firewall settings by clicking the "Start" menu, selecting "Control Panel" and then selecting "Security Center".
For older versions, you can click the "Start" menu. Now click the "Run" button (or type run in the Start Search field). When the run window appears, type firewall.cpl and click "OK." The firewall settings are under the "General" tab.
- Make Sure You Have Plenty of RAM: Not to be confused with hard drive space, RAM is the memory your computer uses to run programs and data for files you are currently working on. If you run more programs than your computer's RAM can handle at one time, it will run more slowly as the programs compete for RAM. To fix the problem, you don't necessarily need to purchase a whole new computer. Instead, try purchasing more RAM from a local computer store.
- Uninstall Any Unused Programs: Now that you've learned about the importance of RAM, you can understand why it's crucial to keep only the programs you use. To delete any unused programs, click "Start" and then click on "Control Panel." Find the icon that says "Add or Remove Programs," and click it on. Scroll down to find the appropriate program, and have it removed. Your computer will prompt you with instructions.
- Perform Regular Housecleaning: Regularly deleting your temporary Internet files, cookies, and Internet history will do wonders for maintaining a quick and clean PC. To do so, click "Tools" on the taskbar of your Internet browser. Scroll down and click on "Internet Options." From there, select what you would like to delete. Another bit of housekeeping you should regularly perform is emptying your trash bin.
- Defragment (Defrag) Your Hard Drive: Defragmenting your hard drive may be the single best thing you can do to keep your computer running optimally. As you add programs and data to your computer, the information in question takes up blocks of actual physical space on the hard drive. Whenever one of those blocks is deleted, a blank space is created. By defragmenting your computer, you remove the blank spaces and create a more efficient pathway.
In order to perform a "defrag" on your hard drive, start by double-clicking your "My Computer" icon. Next, right-click on the "C-Drive" option. Click "Properties," "Tools," and then "Defragment Now." Depending on how fragmented your computer's hard drive is, some system defrags can take several hours - and during that time, you cannot use your computer.
- Use an Email Service with a Good Spam Filter: The ability for an email service to effectively filter out insidious spam emails is highly important when it comes to minimizing your risk. In addition to regularly cleaning out your email spam file, you should also never give personal information via an email.
By taking a proactive approach with your computer, you will save yourself a lot of time, money, and frustration...and be all ready for the coming school year! |
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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of August 10 - August 14 Date | ET | Economic Report | For | Estimate | Actual | Prior | Impact | | Tue. August 11 | 08:30 | Productivity | Q2 | 4.9% | | 1.6% | Moderate | | Wed. August 12 | 02:15 | FOMC Meeting | | | | 0.0% - 0.25% | HIGH | | Wed. August 12 | 10:30 | Crude Inventories | 8/07 | NA | | 1.67M | Moderate | | Wed. August 12 | 08:30 | Balance of Trade | Jun | -$28.5B | | -$26.0B | Moderate | | Thu. August 13 | 08:30 | Jobless Claims (Initial) | 8/08 | 545K | | 550K | Moderate | | Thu. August 13 | 08:30 | Retail Sales | Jul | 0.3% | | 0.6% | HIGH | | Thu. August 13 | 08:30 | Retail Sales ex-auto | Jul | 0.1% | | 0.3% | HIGH | | Fri. August 14 | 08:30 | Consumer Price Index (CPI) | Jul | 0.0% | | 0.7% | HIGH | | Fri. August 14 | 09:15 | Capacity Utilization | Jul | 68.1% | | 68.0% | Moderate | | Fri. August 14 | 09:15 | Industrial Production | Jul | 0.1% | | -0.4% | Moderate | | Fri. August 14 | 10:00 | Consumer Sentiment Index (UoM) | Aug | 68.5 | | 66.0 | Moderate | | Fri. August 14 | 08:30 | Core Consumer Price Index (CPI) | Jul | 0.2% | | 0.2% | HIGH |
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