Weekly Market Update from Curt and Shannon

 

May 28, 2013 Hello Brad, Want to make your listing as appealing as possible to buyers? Test smartphone signal strength when you're indoors. A number of factors may affect reception, including building materials and nearby electronic devices. Addressing these issues can help prospective buyers feel better about living in the home. It's always important to go the extra mile for customers. If there's anything I can do to help, please let me know. I'm here to make a difference. Sincerely, The Dalpiaz Team Curt and Shannon 141 S. McCormick Street Suite #107 Prescott, AZ 86303 Ph-928-777-8971 curt.dalpiaz@academy.cc shannon.dalpiaz@academy.cc LO License-#0912851 LO NMLS-#151454 NMLS #243638

When Will the Fed Taper? Average 30-year fixed rate Week of 05/24: +0.18% Week of 05/17: +0.10% ---------------------------- Stocks (Weekly) Dow: 15,250 -50 NASDAQ: 3,450 -25 HIGHLIGHTS Existing Home Sales Rose to the Highest Level Since November 2009. Continued Jobless Claims Fell to the Lowest Level Since March 2008. Chinese Manufacturing Data Was Weaker Than Expected. The Treasury Will Auction $99 billion in 2-yr, 5-yr, and 7-yr Securities This Week.

For months, investors have been focused on the question of when the Fed will begin to scale back its massive bond buying program. On Wednesday, comments from Fed Chief Bernanke and the Fed Minutes caused investors to think that the tapering may begin sooner than expected. The acknowledgment that Fed officials believe that economic growth actually could pick up quickly enough to justify a reduction in monetary stimulus was encouraging, but it was bad news for mortgage rates. One of the primary goals of the Fed's bond buying program is to keep mortgage rates low to stimulate the housing market and boost the economy. To this end, the Fed currently purchases the vast majority of newly issued mortgage-backed securities (MBS) each month. Since mortgage rates are mostly determined by MBS prices, this enormous demand from the Fed has helped mortgage rates decline to historically low levels. The Fed's MBS purchases will eventually end, however, and last week's Fed comments raised investor concerns that this will take place sooner than previously expected. On Wednesday, Bernanke acknowledged that there is a chance that the Fed could begin to taper its MBS purchases at one of its "next few meetings", based on economic conditions. The detailed Fed Minutes from the May 1 Fed meeting revealed that a number of Fed officials were open to scaling back the Fed's MBS purchases as early as next month, if economic growth picks up enough. In addition, the Minutes from the last Fed meeting revealed that there is wide disagreement among Fed officials about what would constitute sufficient economic strength to cause the Fed to cut back its MBS purchases. Neither Bernanke's testimony nor the Minutes indicated that economic growth is currently strong enough to satisfy most Fed officials, making it unlikely that tapering will begin in the next couple of months. Bernanke warned that a 'premature' tightening of monetary policy would risk slowing the economic recovery. The result of this uncertainty has been a high level of volatility around data releases and Fed speeches, and the volatility is likely to continue until the Fed actually announces a change in policy.

THE WEEK AHEAD This week, revisions to first quarter GDP and Pending Home Sales will be released on Thursday. Core PCE inflation, Personal Income, and Chicago PMI Manufacturing will come out on Friday. Consumer Confidence and Consumer Sentiment will round out the Economic Calendar. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. Mortgage markets were closed on Monday in observance of Memorial Day.

MON 05/27 TUE 05/28 WED 05/29 THURS 05/30 FRI 05/31   Confidence   GDP Core PCE   2-yr Auction   Pending Sales Income       7-yr Auction Chicago PMI

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