Economic Highlights for the Week Ending August 21, 2009
MONDAY, August 17th
The NAHB housing market index rose to a level of 18 in August from a reading of 17 in July. Ratings of present, new single-family sales were unchanged in August while homebuilders projected stronger sales six month from now as foot traffic through model homes increased. Recovery in the new home market and thus homebuilder sentiment has a long way to go to regain lost ground. Improvement will remain slow going forward since it is affected by the larger existing home market.
TUESDAY, August 18th
The producer price index fell 0.9% in July as energy prices plunged 2.4%. Over the past year the PPI is down 6.4% while energy prices dropped 29.6%. Excluding food and energy costs, the core PPI fell 0.1% on the month but has increased 2.6% on the year. Nevertheless, the core rate continues to trend lower while future gains in energy prices will likely boost headline, wholesale inflation higher in coming months.
Housing starts fell 1.0% in July to an annual pace of 581k from an upwardly revised June pace of 587k. Starts remain weak but have stabilized in the past two months. A gain in the single family sector for the fifth straight month was an encouraging sign. Recovery in new home construction continues to be slow and may face headwinds going forward related to still large inventories of unsold existing homes.
WEDNESDAY, August 19th
The MBA mortgage applications index rose 5.6% to 527.0% for the week ending August 14. The purchase index increased 3.9% on the week as refinance activity rose 6.9%. The purchase market is finding support in tax breaks and low prices while refinancing responds to rate movements. Contract mortgage rates fell sharply in the last week with refinance activity accounting for nearly 53% of total applications.
THURSDAY, August 20th
Jobless claims rose 15k to 576k for the week ending August 15. Claims have been inching back toward that 600k level in the past few weeks indicative of still weak labor market conditions and some reversal of previous improvement. Like other sectors of the economy, the road to recovery is proving a bumpy one.
The index of leading economic indicators rose for the fourth consecutive month, gaining 0.6% in July. Recent gains in the index suggest the economic downturn is fading quickly. Expectations are for the economy to begin expanding once again in the second half of this year.
Mortgage rates declined this week in response to falling yields in the bond market. 30-year fixed rate mortgages averaged 5.12% this week compared to 5.29% last week according to Freddie Mac's mortgage market survey.
FRIDAY, August 21st
Existing home sales gained 7.2% in July to an annual pace of 5.24 million, better than an expected rate of 5.00 million. This was the fourth consecutive increase in home re-sales and the biggest monthly gain since 1999. Moreover, sales were up 5.0% on the year in their first yearly increase since November 2005. The current sales pace is about on par with sales in the fall of 2007.
Stock Market Close for the Week
Index
Latest
A Week Ago
Change
DJIA
9505.96
9321.40
+184.56 or +1.98%
NASDAQ
2020.90
1985.52
+35.38 or +1.78%
WEEK IN ADVANCE
The economy is on the mend however consumers remain on the ropes making consumer confidence surveys and personal income data important to watch in the week ahead. Also, recent risk-averse plays in the bond market may give way to supply concerns this week as the Treasury plans to sell another $109 billion in debt.
Key Interest Rates
Latest
6 Mos Ago
1 Yr Ago
Prime Rate
3.25
3.25
5.00
Fed Discount
0.50
0.50
2.25
Fed Funds
0.25
0.23
2.02
11th District COF
1.599
2.757
2.829
10-Year Note
3.56
2.75
3.83
30-Year Treasury Bond
4.37
3.56
4.45
30-Yr Fixed (FHLMC)
5.12
5.04
6.47
15-Yr Fixed (FHLMC)
4.56
4.68
6.00
1-Yr Adj (FHLMC)
4.69
4.80
5.29
6-Mo Libor (FNMA)
0.92500
1.66000
3.08375
Sources: IBC's Money Fund Report; Bank Rate Monitor; Federal Home Loan Bank of San Francisco
This is the latest information on the national real estate market ending August 21, 2009.
Larry has over 15 years of experience in Bank Repos and Short Sales and non foreclosed real estate, my clients include General Electric Mortgage, Home Savings, Associates Finance, Transamerica. Current clients include Bank of America, Ocwen Financial Corporation, Countrywide and Keystone Asset Management to name a few. Larry is President of Weichman Associates located in Costa Mesa California. He has sold real estate since 1976 and is a 3rd generation Real Estate Broker. Larry has closed escrow on over 1,000 properties; from townhomes to commercial buildings. Please be sure to visit us on the Internet at
www.TeamWeichman.com,
www.OCHomeTracker.com or
www.OCRepoBroker.com or you can call me at 714-241-4532
