Cari Anderson's East Bay Mortgage Update for June 28th 2010
Economic News: The only news released today was the Personal Income & Outlays report. Personal Income showed a nice gain in May as well as a 1.6% increase in the year over year numbers. Month over month consumer spending rose slightly and showed a 4.6% increase over the same time period last year. One confusing note on the extension of the Home Buyer Tax Credit is that discussions will begin again after the Fourth of July weekend. The only problem is the uncertainty for buyers who are unable to close escrow by this Wednesday, which was the original deadline.
Mortgage Markets: The yield on the 10 Year Note fell to 3.023% by the closing bell on Monday, continuing the rally from last week. In addition, the Mortgage Backed Securities showed continued strength as well with very aggressive rates over Friday's level. If you are looking to close on a purchase or refinance in the next 30 days today provides a great opportunity to lock.
This Week's Reports: Tuesday: Case-Shiller Home Price Index & Consumer Confidence. Wednesday: ADP Employment Report. Thursday: Jobless Claims, ISM Manufacturing Index, Construction Spending & Pending Home Sales Index. Friday: Employment Situation.
Stay tuned for the Next East Bay Mortgage Update.
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Economic News: The Existing Home Sales numbers announced Tuesday were a bit of a disappointment and the estimated annual sales rate came in much lower than expected. The New Home Sales figures announced on Wednesday also disappointed the markets. New homes sales fell 33% in May with a forecast annual rate of 300,000 units which is the lowest reading going back to 1963. Obviously the stimulus expiration is having an impact as supply of homes also increased in both the new & existing home space. As expected the Federal Open Market Committee (FOMC) met and made no change in the current overnight rate. Yesterday brought Durable Goods Orders which were not great but within the consensus. Jobless Claims were in line with expectations as well and while not signaling a near term improvement in the employment picture there was a nice drop in continuing claims. Finally, this morning's Gross Domestic Product (GDP) report was revised downward for the first quarter of 2010 to 2.70% from the initial estimate of 3.20%. 
Mortgage Markets: The yield on the 10 Year Note has fallen from 3.245% on Monday to 3.09% as of this morning. In addition, the Mortgage Backed Securities have rallied through the week but pricing looks like it may be a little worse this morning compared with yesterday's closing levels. If you are looking to close on a purchase or refinance in the next 30 days today provides a great opportunity to lock.
Economic News: Not much in the way of any pertinent economic news this morning but will be greeted with more as the week progresses. The Federal Open Market Committee (FOMC) will convene this week and the consensus is that overnight lending rates will remain unchanged.
Economic News: Tuesday's Housing Market Index (produced by the National Association of Home Builders) showed weakness in the sector post tax incentives. The index for May was measured at 22 and the initial reading for June is 17. Wednesday brought the Housing Starts, Producer Price Index (PPI) & Industrial Production. The Housing Starts results followed up on the Housing Market Index showing weakness in the Northeast & South while posting positive gains in the Midwest & West. The PPI came in within the expected range signaling no real worries about near term inflation. Industrial Production offset the weak housing numbers with the manufacturing sector continuing a nice three month growth rate. Finally, today's Consumer Price Index mirrored the PPI with muted inflation worries helped by lower prices in the energy sector. Jobless Claims still remain stubbornly high with initial claims rising 12,000 for the week of June 12th to 472,000. The four week moving average, which has been a recent bright spot, weakened compared to the month of May.
Economic News: No economic news for today but the equity markets started the week off on a positive note but gave back most of the gains by the afternoon. As the week progresses we have a fairly significant number of reports due that will give us an indication of the inflation direction in the near term.
Economic News: On Wednesday the Mortgage Bankers Association released figures noting that purchase applications as of June 4th were 35% lower than four weeks ago. There seems to be a bit of softness following the expiration of the tax credits. Thursday's Weekly Jobless Claims came in at the high end of expectations and remained stubbornly above the 450,000 level. The continuing claims numbers were taken as a positive though falling by 255,000 reaching the lowest level since late 2008. This morning's Retail Sales results were a little disappointing with May's numbers coming in far below the analysts' estimates and hopefully this is just a pause as the figures have steadily improved over the last few months. Finally, Consumer Sentiment beat estimates and the index climbed to the highest level this year. Good News!
Economic News: There is really nothing on the economic calendar for yesterday and today. There is 70 billion dollars in US Government bond offerings over the next few days but global economic concerns seem to overshadow any weakness in the offerings at this point.
Economic News: Wednesday's Pending Home Sales Index was robust and the index rose from 102.9 to 110.9 and is up 22% in the year over year comparison. The ADP employment report was looking for a rise in May payrolls of 55,000. Initial Jobless Claims were reported at 453,000 which was in line with consensus but still stubbornly high. Both of these numbers were precursors for this morning's Employment Report. The results of the report have caused a broad sell off in the equity market. Of the 430,000 jobs created 411,000 were for temporary census workers. This revealed that although the economy is slowly improving the jobs picture remains weak.