Mortgage Market News

Economic news was abundant today with various agencies reporting numbers. In housing, the Case Shiller 20-city Home rose by 13.7% on a year-over-year basis, just below the 13.8% expected. From October to November, the 20-city Index fell 0.1%, which was the first monthly decline since November 2012. Higher home prices and mortgage rates were cited as the cause behind the monthly decline.
 
The Commerce Department reported today that orders for products lasting for at least three years, Durable Orders, fell by 4.3% in December, which was the largest decline in five months. The drop was due in part to a big decline in commercial aircraft. The -4.3% was well below the +2.1% expected. Orders were also weaker than shipments, which makes the outlook for the economy a bit shaky, but one report doesn't necessarily reflect a trend.
The Conference Board reported today that its Consumer Confidence Index rose to 80.7 in January, up from the 77.5 registered in December and above the 77.5 that was expected. The Conference Board said that consumers assessment of current conditions continues to improve, with both business conditions and the job market rated more favorably. Looking ahead six months, consumers expect the economy and their earnings to improve, but were somewhat mixed regarding the outlook for jobs.
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Mortgage Market News

The National Association of Realtors (NAR) reported today that Existing Home Sales in December rose by 1% to an annual rate of 4.87 million units. That was slightly below the expectation of 4.90 million. In 2013, there were 5.09 million sales, up 9.1% from 2012. Within the report it revealed that the median existing home price was $198,000, up 9.9% from 2012. Inventories fell to a 4.6 month supply from 5.1 months in November.
Over in the jobs market, the Labor Department reported today that Americans filing for first time unemployment insurance rose by 1,000 in the latest week to 326,000, which was near the 327,000 expected. Taking out the weak December jobs report, which was attributed to a cold wave, the sector has been improving. But unseasonably cold weather has continued in January and the job numbers can be influenced when this month's figures are released on February 7.
Fast food giant McDonald's reported slightly better than expected earnings per share in its quarterly report. The company reported that it earned $1.40 billion in the fourth quarter on revenues of $7.09 billion. Global sales declined by 9.1%, while U.S. sales dropped 1.4%.
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Mortgage Market News

The Commerce Department reported this morning that Housing Starts finished off 2013 to the downside, falling sharply in December by 9.8% from November. Starts came in at an annual rate of 999,000, down from the 1.107 million annual units recorded in November. It was expected that Housing Starts would come in at 986,000. Building Permits, a s sign of future construction, declined by 3% to 986,000 units, below the 1 million expected.
Lower and middle income consumers across the nation were concerned about easing economic, employment and income growth in early January. The Consumer Sentiment Index fell to 80.4 from the December reading of 82.5 and below the 83.0 expected. The current economic condition component fell to 95.2 from 98.6. Sentiment in the upper income households saw a different picture as it benefited from the rise in Stock prices and home values.
The holiday sales figures were reported this week showing that they rose by 3.8% from last year for November and December combined. The gains were considered healthy in a year that retailers worried that sales would be tepid. The increase was better than the 3.5% recorded in the 2012 season and better than the 10-year average of 3.3%.
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Mortgage Market News

Consumer prices rose in December as Americans paid prices for energy and shelter costs. The Labor Department reported that the Consumer Price Index rose by 0.3% last month, which was inline with expectations. The 0.3% rise was the biggest gain since June. The Consumer measures changes in the prices paid by consumers for a representative basket of goods and services.
 
In foreclosure news, RealtyTrac reported that foreclosure filings plunged by 26% from 2012 to 2013, with 1.4 million recorded last year, which was the lowest total since 2007 as the housing sector continues to rebound. Foreclosure filings peaked in 2010 and have fallen 53% since that time.
 
Manufacturing picked up in the Philadelphia region this month, which is the second positive regional reading to begin the new year. The Philadelphia Fed Index rose to 9.4, above the 6.4 recorded in December and above the 8.0 expected. Within the report it showed that the employment component showed a mixed bag as the number of employees were up, but the average employee workweek fell to negative 5.3 from 4.8.
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Mortgage Market News

Consumers opened their wallets in December to purchase holiday gifts and took advantage of deep discounts offered by retailers. The Commerce Department reported that Retail Sales in December rose by 0.2%, above the 0.0% expected and lower than the 0.4% recorded in November, which was revised from 0.7%. The discounts from retailers helped to overcome one of worst Decembers in four years.

Over in corporate earnings news, JPMorgan's profits declined by 7.3% in Q4 due to massive legal costs. Stripping out the legal costs, the bank reported profits of $1.40, above expectations of $1.35. The legal costs pulled down net earnings to $1.30 a share as the bank paid nearly $20 billion in the past 12 months for legal costs.
Small businesses showed an uptick in optimism, though still below levels that would be considered typical of post recession periods. The National Federation of Independent Business reported that its Small Business Optimism Index in December rose to 93.9, but below the mid-year readings of 94. Within the report it revealed that businesses feel that it not a good time to expand substantially.
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Morygage 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 15,000 to 330,00, the lowest level since 305,000 in the week ended November 30th. The numbers could still be skewed by the seasonal holiday jobs market, which begins Thanksgiving and ends near the middle of January.
Out placement firm Challenger, Gray & Christmas reports that planned job cuts by employers across the U.S. fell by 32% from November (45,315) to December (30,623). From 2013 to 2013, job cuts declined by 3%, the lowest planned job-cut tally since 1997. The monthly decline in planned job cuts is the first decrease since June 2000.
Government sponsored entity Freddie Mac reported this morning that the 30-year fixed rate home loan rate is at 4.75% this week, just near where they were in the previous week. However, to obtain that rate, a potential borrower would have to pay 1.5 in points and fees. Home loan rates have moved up from the record lows hit back in 2012 of 3.4%, though the current rates are still low by historical standards.
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Mortgage Market News

The job markets received good news this morning after it was reported that job growth in December was better than expected. ADP announced that private employers added 238,000 new jobs in December, above the 203,000 that was expected. The gains were broad based across all industries with heavy concentrations in construction and manufacturing.
The Mortgage Bankers Association reported this morning that its Market Composite Index, a measure of total loan application volume, rose by 2.6% in the latest week. It was the first increase in a month. The refinance index rose by 5% while the purchase index declined by 1%. The refinance portion of mortgage activity was 63% of total applications.
The National Association of Home Builders reported yesterday that newly built single family homes are getting bigger, more expensive to build and costlier for the buyer. The cost to build a single family home in 2013 was $246,453, the highest since 1998. The price of a new constructed home rose by 25% in 2013 to $399.532.
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Mortgage Market News

The housing market received good news in November as the sector continues to improve. CoreLogic reported today that its Home Price Index, which includes distressed sales, rose by 11.8% in November 2013 compared to November 2012. This marks the 21st consecutive month of year-over-year gains. Prices were up 0.1% from October to November. However, home prices still remain 17.6% below their peak from April 2006.
The Senate today agreed to push forward on extending unemployment benefits for three months for the long term unemployed, which has affected nearly 1.3 million people across the U.S. However, the Senate still has to pass the bill, and if it does pass, it would then have to pass through the Republican controlled House of Representatives where it could face some hurdles.
In an historic vote in Washington, D.C. yesterday, Janet Yellen has been confirmed as the first woman chief of the Federal Reserve Bank of the the United States. Ms. Yellen, the Fed's vice-chair since 2010, is the first woman to head the central bank in its 100-year history. Ms. Yellen was raised in Brooklyn, New York served on the Fed's board of governors in the 90s and serves as the San Francisco Federal Reserve Bank President.
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Mortgage Market News

As of December 28, 2013, 1.3 million Americans saw their weekly long-term unemployment benefits expire, after Congress failed to extend the insurance before taking off for their winter recess. The president and some members of the Senate will push for an extension, but that will not help those who were cut off last week.
Home loan rates were on the rise last week and have risen three straight weeks. Freddie Mac reported this morning that the average 30-year fixed mortgage rate rose to 4.53% in the latest week, from 4.48% in the previous week. To obtain that rate, a potential borrower would have to pay 0.8 in points and fees. A spokesman for Freddie Mac said that rates edged up last week on signs of a stronger economic recovery.
The Labor Department reported today that Americans filing for first time unemployment benefits fell in the latest week as the job markets continue to recover. Weekly initial jobless claims fell by 2,000 to 339,000. That was the lowest level in four weeks, a year ago claims were at 372,000. The holiday season could have caused the numbers to jump around in the past month, which made the reporting less reliable than usual.
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