7/23/10 Mortgage Market Week-in-Review
July 25, 2010
What Did Interest Rates Do Last Week?
** based on Freddie Mac weekly average survey **
30-yr Fixed - Slightly Lower
Last Week: 4.56% (* record lows!)
Previous Week: 4.57%
1yr Ago: 5.20%
15-yr Fixed - Slightly Lower
Last Week: 4.03%
Previous Week: 4.06%
1yr Ago: 4.68%
Jumbo Fixed (Average 30-yr Fixed) - 5.125%
Highlight of Last Week's Major Economic Reports
Home sales continue to dip since the expiration of the homebuyer tax credit back in April, and June's results - although a little better than expected - showed how fragile the housing market remains. Sales last month posted a 5.1% drop (the bad news), while median prices notched 1% higher from last year (the good news).
Additionally, the stock market enjoyed a solid rally as a result of stronger-than-expected corporate earnings. This, coupled with the weak outlook for housing, contributed to knocking mortgage rates down to another record low. Unfortunately, the still-increasing number of people filing weekly jobless claims is a huge factor resulting in not as many folks being able to take advantage of these historic rates.
What to Look for This Week
More housing data comes our way with the release of the latest New Home Sales figures, which is expected to reflect weak numbers and is foreshadowed by builder confidence hovering at the lowest levels in a year, as well as housing starts that continue to slip.
We also get a peak at the latest Fed survey of economic conditions to gauge economic progress throughout various regions of the country.
Short-Term Rate Outlook
Relatively Stable
Stay Informed: What's in the News
"Texas Leads Economic Recovery" from Texas A&M Real Estate Center
Texas is leading the United States in the current U-shaped economic recovery. The state's economy experienced its second month of positive annual employment growth after 16 months of job losses.
Texas' annual employment growth rate was 0.9 percent from June 2009 to June 2010 compared with a negative rate of 0.1 percent for the nation. After 17 months of job losses, the state's private sector posted a positive annual employment growth rate of 0.4 percent.
The state's seasonally adjusted unemployment rate rose from 7.8 percent in June 2009 to 8.2 percent in June 2010, while the U.S. rate in June was 9.5 percent, the same as in June 2009.
Six Texas industries - education and health services; mining and logging; professional and business services; leisure and hospitality; manufacturing; and transportation, warehousing, utilities - and the government sector had more jobs in June 2010 than in June 2009. Five other industries experienced net job losses over the same period.
Sixteen Texas metro areas experienced positive employment growth rates from June 2009 to June 2010, up from 13 for the period from May 2009 to May 2010. College Station-Bryan ranked first in job creation followed by San Angelo, McAllen-Edinburg-Mission, Killeen-Temple-Fort Hood and Waco.
The state's actual unemployment rate in June 2010 was 8.5 percent. Midland had the lowest unemployment rate followed by Amarillo, Lubbock, San Angelo, Abilene and College Station-Bryan.
"Austin 5th Best City for College Grads" from Houston Business Journal
http://houston.bizjournals.com/houston/stories/2010/07/19/daily36.html
"Rebound or Double Dip? Dotzour's 2011 Forecast" from Texas A&M Real Estate Center
As much of the nation ponders whether the country is in rebound mode or headed for a "double-dip" recession, Real Estate Center Chief Economist Dr. Mark Dotzour sees definite signs of hope for the economy.
"There are signals that the economy is trying to turn the corner," Dotzour said. "Consumer confidence has increased from a year ago, and consumer spending has resumed its relentless upward trajectory."
He says the most important positive indicator is that corporate profits have rebounded.
"In a free-market, capitalistic system like America, profit growth is the key indicator," he said. "When profits are growing, companies hire employees. When profits flatten, they stop hiring. When profits fall, they start to fire people, and they keep on firing people until profits start to increase again. Clearly, most businesses have right-sized their firms sufficiently to regain profitability."
So why aren't they hiring people?
"The answer is uncertainty: uncertainty of capital gains and income tax rates; uncertainty about the cost of health care and the possible increase in energy costs due to 'cap and trade.' The prospect of new and increased government regulation makes it hard for business to see clearly into the future," he contends.
Dotzour points out that businesses can buy insurance against risk, but there is only one way to "insure" against uncertainty - and that is to hoard cash.
"There is now nearly $3 trillion sitting in cash on business balance sheets," he said. "They have much more capital then the Federal Reserve, the FDIC, Fannie Mae and Freddie Mac combined."
"Bankruptcy can save your house from foreclosure" from CNNmoney.com
Slick TV commercials and online ads tell delinquent borrowers that they can save their homes by filing for personal bankruptcy. But is it true -- or just too good to be true? True! Bankruptcy can bring foreclosure proceedings to a halt, end harassment from debt collectors, and give borrowers time to make up missed payments and reorganize their finances. In some cases, bankruptcy can also help mortgage borrowers save their homes permanently.
"Austin Home Sales Down, Demand Stable" from Austin Business Journal
http://www.bizjournals.com/austin/stories/2010/07/19/daily19.html?ana=e_du_pub
** based on Freddie Mac weekly average survey **
30-yr Fixed - Slightly Lower
Last Week: 4.56% (* record lows!)
Previous Week: 4.57%
1yr Ago: 5.20%
15-yr Fixed - Slightly Lower
Last Week: 4.03%
Previous Week: 4.06%
1yr Ago: 4.68%
Jumbo Fixed (Average 30-yr Fixed) - 5.125%
Highlight of Last Week's Major Economic Reports
Home sales continue to dip since the expiration of the homebuyer tax credit back in April, and June's results - although a little better than expected - showed how fragile the housing market remains. Sales last month posted a 5.1% drop (the bad news), while median prices notched 1% higher from last year (the good news).
Additionally, the stock market enjoyed a solid rally as a result of stronger-than-expected corporate earnings. This, coupled with the weak outlook for housing, contributed to knocking mortgage rates down to another record low. Unfortunately, the still-increasing number of people filing weekly jobless claims is a huge factor resulting in not as many folks being able to take advantage of these historic rates.
What to Look for This Week
More housing data comes our way with the release of the latest New Home Sales figures, which is expected to reflect weak numbers and is foreshadowed by builder confidence hovering at the lowest levels in a year, as well as housing starts that continue to slip.
We also get a peak at the latest Fed survey of economic conditions to gauge economic progress throughout various regions of the country.
Short-Term Rate Outlook
Relatively Stable
Stay Informed: What's in the News
"Texas Leads Economic Recovery" from Texas A&M Real Estate Center
Texas is leading the United States in the current U-shaped economic recovery. The state's economy experienced its second month of positive annual employment growth after 16 months of job losses.
Texas' annual employment growth rate was 0.9 percent from June 2009 to June 2010 compared with a negative rate of 0.1 percent for the nation. After 17 months of job losses, the state's private sector posted a positive annual employment growth rate of 0.4 percent.
The state's seasonally adjusted unemployment rate rose from 7.8 percent in June 2009 to 8.2 percent in June 2010, while the U.S. rate in June was 9.5 percent, the same as in June 2009.
Six Texas industries - education and health services; mining and logging; professional and business services; leisure and hospitality; manufacturing; and transportation, warehousing, utilities - and the government sector had more jobs in June 2010 than in June 2009. Five other industries experienced net job losses over the same period.
Sixteen Texas metro areas experienced positive employment growth rates from June 2009 to June 2010, up from 13 for the period from May 2009 to May 2010. College Station-Bryan ranked first in job creation followed by San Angelo, McAllen-Edinburg-Mission, Killeen-Temple-Fort Hood and Waco.
The state's actual unemployment rate in June 2010 was 8.5 percent. Midland had the lowest unemployment rate followed by Amarillo, Lubbock, San Angelo, Abilene and College Station-Bryan.
"Austin 5th Best City for College Grads" from Houston Business Journal
http://houston.bizjournals.com/houston/stories/2010/07/19/daily36.html
"Rebound or Double Dip? Dotzour's 2011 Forecast" from Texas A&M Real Estate Center
As much of the nation ponders whether the country is in rebound mode or headed for a "double-dip" recession, Real Estate Center Chief Economist Dr. Mark Dotzour sees definite signs of hope for the economy.
"There are signals that the economy is trying to turn the corner," Dotzour said. "Consumer confidence has increased from a year ago, and consumer spending has resumed its relentless upward trajectory."
He says the most important positive indicator is that corporate profits have rebounded.
"In a free-market, capitalistic system like America, profit growth is the key indicator," he said. "When profits are growing, companies hire employees. When profits flatten, they stop hiring. When profits fall, they start to fire people, and they keep on firing people until profits start to increase again. Clearly, most businesses have right-sized their firms sufficiently to regain profitability."
So why aren't they hiring people?
"The answer is uncertainty: uncertainty of capital gains and income tax rates; uncertainty about the cost of health care and the possible increase in energy costs due to 'cap and trade.' The prospect of new and increased government regulation makes it hard for business to see clearly into the future," he contends.
Dotzour points out that businesses can buy insurance against risk, but there is only one way to "insure" against uncertainty - and that is to hoard cash.
"There is now nearly $3 trillion sitting in cash on business balance sheets," he said. "They have much more capital then the Federal Reserve, the FDIC, Fannie Mae and Freddie Mac combined."
"Bankruptcy can save your house from foreclosure" from CNNmoney.com
Slick TV commercials and online ads tell delinquent borrowers that they can save their homes by filing for personal bankruptcy. But is it true -- or just too good to be true? True! Bankruptcy can bring foreclosure proceedings to a halt, end harassment from debt collectors, and give borrowers time to make up missed payments and reorganize their finances. In some cases, bankruptcy can also help mortgage borrowers save their homes permanently.
"Austin Home Sales Down, Demand Stable" from Austin Business Journal
http://www.bizjournals.com/austin/stories/2010/07/19/daily19.html?ana=e_du_pub