Daily Update of Prescott Area Foreclosed Homes and Land, The Bank and REO Market Place as it pertains to The Greater Prescott Area and Yavapai County. Listings courtesy of The Bergamini Group @ Realty Executives Northern Arizona
Theron Wall Sr. Mortgage Consultant 3767 Karicio Lane, Ste B Prescott, AZ 86303 Office: 928.445.8730 Fax: 928.445.1065 Cell: 928.533.7473
For the week of May 6, 2013 – Vol. 11, Issue 18
>> Market Update
QUOTE OF THE WEEK... "Great minds must be ready not only to take opportunities, but to make them." --Charles Caleb Colton, English cleric and writer INFO THAT HITS US WHERE WE LIVE... Both taking opportunities and making them have driven the housing market recovery to new accomplishments. For Q1 this year, existing home sales were at their highest level since Q4 of 2009 and new homes sales were the highest since Q3 of 2008. Last week, the National Association of Realtors (NAR) reported Pending Homes Sales were up 1.5% in March and up 7.0% compared to March a year ago. In fact, this measure of contracts signed on existing homes has now been above year-ago readings for 23 months in a row!
The NAR's chief economist said, "Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply." He added: "Job additions and rising household wealth will continue to support housing demand." Finally, the 20-city composite of the S&P/Case-Shiller Home Price Index for February came in UP 9.3% versus a year ago. This was the highest annual growth rate since May 2006. In addition, all 20 cities showed price gains for at least two months in a row. That hasn't happened since early 2005.
BUSINESS TIP OF THE WEEK... Start thinking of yourself as a brand. Then come up with a clear idea of where your brand stands and what sets it apart in the marketplace.
>> Review of Last Week
RECORD-BREAKING... Friday, new records were set for the Dow and S&P 500 stock indexes, as Wall Street went giddy over a better than expected (though still mediocre) April Employment Report. The Dow passed 15,000 during the day and ended at a record close just under that threshold. The S&P 500 nailed its record close just over 1600. The catalysts were a surprise gain of 165,000 nonfarm payrolls last month, an upwardly revised 138,000 jobs hike for March, and a drop in the unemployment rate to 7.5%, its lowest reading since December 2008. Better-than-expected Q1 corporate earnings also inspired investors.
Disappointing news did come with Personal Income, Q1 Productivity, ISM Manufacturing, and ISM Services all lower than forecast, though the manufacturing and services sectors of the economy are still showing growth. The Chicago PMI did have manufacturing contracting in that region. But Consumer Confidence and Pending Home Sales were both better than predicted, and PCE Prices, the Fed's favorite measure of inflation, stayed well within the target range. Finally, weekly Initial Unemployment Claims fell to 324,000, their lowest level since January 2008.
The week ended with the Dow up 1.8%, to 14974; the S&P 500 up 2.0%, to 1614; and the Nasdaq up 3.0%, to 3379.
Over in the bond market, Treasuries gained following lower than expected Q1 GDP growth, then lost ground after Friday's better jobs numbers. The FNMA 3.5% bond we watch ended the week down .12, at $106.04. National average mortgage rates slid for the fifth straight week in Freddie Mac's weekly Primary Mortgage Market Survey. Their chief economist commented: "Near record low mortgage rates should further drive the housing market recovery over the near term." DID YOU KNOW?... The latest NAR survey reported the median days on market for all home sales was 62 days in March compared to 91 days a year ago, and 37% of respondents reported time on market at less than 1 month when sold.
>> This Week's Forecast
JOBLESS PROGRESS, A MONTHLY FEDERAL SURPLUS, A QUIET WEEK... Compared to the last few weeks, this one is quiet in terms of economic reports. Both Initial and Continuing Unemployment Claims are expected to show the slow but steady progress they've been delivering for a while.
The Federal Budget for April should again report a surplus. Lest we think Washington has mended its profligate spending ways, remember that April always features more tax revenue coming in, while, this year, sequestration is limiting revenues going out. For now.
>> The Week's Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of May 6 – May 10
W May 8
Th May 9
Initial Unemployment Claims
Th May 9
Continuing Unemployment Claims
F May 10
>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months... Last week's policy statement said the Fed would keep the Funds Rate "exceptionally low...at least as long as the unemployment rate remains above 6.5%." Economists do not expect to see that number any time soon. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.
Current Fed Funds Rate: 0%–0.25%
After FOMC meeting on:
Probability of change from current policy:
After FOMC meeting on:
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