Mortgage Market News

The Labor Department reported this morning that Americans filing for first time unemployment benefits declined in the latest week. Weekly Initial Jobless Claims fell by 5,000 to 305,000 and below the 325,000 expected. The four week moving average, which smoothes out any seasonal abnormalities, dropped 7,000 to 308,000, the lowest level since June of 2007. The sector has been improving, but employers remain jittery ahead of the new healthcare laws and the possibility of a government shutdown.
In a separate government report, the third of three readings on Gross Domestic Product for the second quarter of 2013 came in at 2.5%, inline with estimates. Within the report it showed that consumer spending was unchanged at 1.8% while the inflation component fell for the first time in four years.
Yesterday, the world's largest retailer, Wal-Mart, announced that due to a decline in sales, it will be ordering less merchandise for their shelves. It is said that inventories at Wal-Mart are way above their goals. Consumer Spending is a big part of the U.S. economy and sales at Wal-Mart is a barometer for that spending.
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Mortgage News

Over in housing, the Case Shiller 20-city Home Price index rose by 1.8% from June to July, the smallest increase since the March to April reading of 2.5%. Year-over-year, prices rose 12.4% from July 2012 to July 2013. A spokespersons from Case Shiller said that the rate of increases may have peaked due to the recent rise in mortgage rates.
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Mortgage Market News

The Federal Reserve said yesterday that it will not begin to pull back on its massive Bond purchase program that is geared towards promoting economic and job growth. The news sparked a massive rally in both the Stock and Bond markets as the S&P 500 (1,725) and the Dow (15,676) both closed at record high levels.
In today's economic news, the National Association of Realtors reported that Existing Home Sales rose to a six year high in August to an annual rate of 5.48 million units. That was above the 5.30 million expected and up 1.7% from July to August as the sector continues to strengthen, despite the recent rise in home loan rates. The median home price has now risen nearly 15% from a year ago to $212,100.
Over in the manufacturing sector, the Philadelphia Fed Index surged to 22.3 in September, well above the 9.0 expected and up from the 9.3 recorded in August. Respondents in the survey were positive on general activity, new orders, shipments and employment. Any reading above 50 indicates expansion in the region's manufacturing.
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Mortgage Market News

Consumer inflation levels continued to run lower in August due to a decline in energy prices with slightly higher prices seen in housing and food costs. The Consumer Price Index (CPI) rose by 0.1% in last month versus the 0.2% expected and down from the 0.2% recorded in July. When stripping out food and energy, the Core CPI also rose by 0.1%, below the 0.2% anticipated.
Over in housing, the National Association of Home Builders reported today that its Housing Market Index was steady in September to 58, just below the 59 reading that was expected. Readings over 50 indicates a positive environment. In addition, the index of prospective buyers is the highest since October of 2005.
The AAA club said this morning that the average price for a regular gallon of gas at the pump has been at $3 or above for 1000 consecutive days, something that has never happened before. The streak started back on December 23, 2010 and the price is currently $3.52. AAA said that a price floor of $3 is basically here to stay.
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Mortgage Market News

Big news on the candidates for the Federal Reserve Chairman post that is set to be vacated by current Chairman Ben Bernanke in January of 2014. One of the front runners, former Secretary of the Treasury Lawrence Summers, has withdrawn from the race. This paves the way for current Federal Reserve Vice Chairman Janet Yellen to become the front runner to be nominated for the position.
In economic news, the New York Federal Reserve reported that its Manufacturing Index fell to 6.29 in September from 8.2 recorded in August and below the 9.0 that was expected. Within the report it showed that labor market conditions were mostly steady while the future general business conditions rose for a third straight month.
In a recent survey conducted Bankrate.com from 1,000 people showed that 40% of the respondents will pay higher costs for health care this year compared to last year with 8% reporting they will pay less. The first phase of the new Obamacare laws are due to be launched in a few weeks and the survey also reveals that about 28% said they are more negative about Obamacare than they were a year ago.
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Mortgage Market Update

Freddie Mac reported today the average rate for a 30-year fixed conventional mortgage is unchanged at 4.87%. However, to obtain that rate a potential borrower would have to pay 0.7 in points/fees. Due to the higher rates, the refinance end of the business has begun to slow, down a whopping 71% since its recent peak the week of May 3, 2013.
Over in the foreclosure front, RealtyTrac reported yesterday that foreclosure filings plunged by 34% year-over-year in the month ended in August. The decline was due in part to a rise in home prices, a pickup in job growth and less troubled loans and are at levels not seen in eight years. A RealtyTrac spokesperson said the "foreclosure flood waters have receded" in most parts of the country, but towns continue continue to clean up the damage that was left behind.
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Mortgage News

Homeowners underwater on their mortgages received positive news today as the recent gains in home prices have lifted 2.5 million residential properties into positive equity in the 2nd quarter of 2013. However, CoreLogic reports that 7.1 million residential properties still have negative equity and as home price appreciation moderates in the 2nd half, the pace of improvement will likely slow. Negative equity means that a borrower owes more on a home than it is worth.
The Syrian crisis has somewhat abated today as the White House tells lawmakers diplomacy is priority on Syria. The news has shifted investing dollars out of the safe haven of the Bond markets and back into more riskier assets, such as Stocks. Oil prices are also declining on the news.
 
In corporate news, McDonald's reported this morning that revenues rose in August, driven by a surge in sales in its European division. In addition, the International Council of Shopping Centers reported that U.S. chain store sales rose 2.3% year on year for the week ended on September 7.
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Mortgage News

Economic data was abundant today with readings on the jobs market, wage inflation and how the service sector is holding up.
The first report that hit the wires was the ADP Private Payrolls Report showing that employers added 176,000 new jobs in August, just below the 180,000 that was expected. The report is produced from ADP's actual payroll data and measures the change in nonfarm private employment each month.
Next up was a report from outplacement firm Challenger, Gray & Christmas showing that planned layoffs at companies across the nation surged by nearly 33.8% in August from July by 50,462. This was the highest level since February and up 57% from last year this time. The planned layoffs were concentrated in the industrial goods sector driven by declining global demand for mining equipment and while there is concern, it is not as worrisome as an overall slowdown in construction or manufacturing.
Rounding out the news was the Labor Department's release of its weekly jobless claims number declining by 9,000 to 323,000 and below the 333,000 that was expected. New claims continue to hover near 6-year lows. Americans that continue to collect benefits fell by 43,000 to 2.95 million.
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Mortgage News

The Mortgage Bankers Association reported today that its Market Composite Index, a measure of total loan application volume, rose by 1.3% in the latest week. It was the first positive reading in four weeks. The refinance index increased by 2% while the purchase index declined by 0.4%.
Over in housing news, CoreLogic released its monthly Home Price Index yesterday showing that prices on a year-over-year basis rose by 12.4% in the month ended in July. It was the 17th consecutive month of year-over-year home price gains. In addition, there was a 1.8% increase from June to July. However, prices are still nearly 18% below their peak levels set back in April of 2006. Looking ahead, CoreLogic sees a 12.3% increase from August 2012 to August 2013.
The government jobs report will be released this coming Friday morning at 8:30am ET and the markets and members of the Federal Reserve eagerly await the numbers. It is expected that employers added 177,000 new jobs in August, above the 162,000 that were created in July. The Federal Reserve will closely scrutinize the numbers for continued signs of a labor market recovery to base its decision as to whether or not to begin tapering the current Bond purchase program in September, or hold off until the end of the year or early in 2014.
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