Tuesday, November 1, 2011
Wednesday, June 1, 2011
9 Reasons to Choose New Homes Over Resales
As the mortgage crisis continues to inundate the market with distressed properties, house hunters have no shortage of cheap, foreclosed homes to pick through. But despite all those deals in the market for previously owned homes, consumers shouldn’t overlook the potential benefits of buying a new home.
“New homes usually sell higher per square foot then resale homes,” says Jack McCabe of McCabe Research & Consulting in Deerfield Beach, Fla. “But their selling points, I think, are pretty strong.”
To help consumers understand the advantages of buying a new home, U.S. News spoke with a handful of experts and compiled a list of nine reasons to choose a new home over a resale.
1. Customization: Many homebuilders allow buyers to help design the property, which helps create a living space tailored to the consumer’s tastes. New-home buyers, for example, can often decide where their bathroom might go, choose their favorite flooring or pick the exterior paint color. Buyers moving into a subdivision can sometimes pick the lot they like best.
“There is a lot of flexibility for [new-home buyers] to kind of put their personal signature on the product,” says Patrick Costello, president of Forty West Builders, based in Ellicott City, Md. “Those kind of things you can’t do with a used house — it’s just not possible.”
2. Building envelope: Building codes have mandated higher energy-efficiency standards since they began to address the issue in the late 1970s, says Kevin Morrow, senior program manager for the National Association of Home Builders’ green-building programs. The most recent International Energy Conservation Code came out in 2009 and required about 17% more efficiency than three years earlier, he says.
“So using that as sort of a gauge to how newer homes should perform from an efficiency standpoint compared to older homes, it’s pretty clear that just as homes meet code, they are going to be more efficient,” Morrow says.
Newly constructed homes use energy more efficiently in two ways, Morrow says. First, they tend to have a tighter-sealed building envelope, or the enclosed part of a structure, that helps prevent conditioned air — cool air in the summer, warm air in the winter — from escaping. Features that create this envelope include higher-efficiency insulation, doors and windows.
“Gone are the days of the single-pane window,” Morrow says. “Now, I think you are starting to see triple- and quadruple-paned windows. These are windows that are designed to really minimize the transfer of heat either from warm to cold or vice versa, and they of course will help the building envelope.”
3. Green appliances: The more energy-efficient mechanics of the house also help reduce utility bills for new-home buyers, Morrow says. New homes often include green systems and appliances — such as high-efficiency stoves, refrigerators, washing machines, water heaters, furnaces or air conditioning units — that homes built years ago might not.
“The conditioning equipment is usually considered to be one of the larger energy-consumption devices, but certainly, those kitchen appliances matter,” Morrow says.
To read the rest of this great article, click here. http://realestate.msn.com/article.aspx?cp-documentid=25600868
Friday, February 18, 2011
Pay Off Your Loan Early!
Sounds nice, but how do you know what to do? Here is a little calculator I put together for you so you can find out how much you're saving over the course of the loan! Click here to use the calculator for free.
Friday, January 21, 2011
What Kind of Return Can I Expect From a Remodel?
When considering a remodeling project, cost is definitely an important factor. However, you must also consider whether a remodeling project will retain its value if you decide to sell your home.
Recently, Remodeling Magazine and REALTOR® Magazine published their annual Remodeling Cost vs. Value Report for 2010, which takes 35 common remodeling projects and estimates the average recouped cost for each project in 80 cities across the United States. Although these itemized estimates are based on hypothetical projects for an average American home, they are helpful in providing an overview of remodeling costs.
On a national level, the report indicates that the largest percentage of recouped costs derived from such projects as steel entry door replacement (102.1 percent of costs returned), garage door replacement (83.9 percent of costs returned) and wooden deck additions (72.8 percent of costs returned). Many of the highest financial returns were seen from projects where building costs were less than $15,000.
On a local level, estimated recouped costs were much greater than most cities in the nation, according to the report. Below are the top ten remodeling projects that yielded the highest returns for homeowners in Austin, Texas in 2010:
•Steel entry door replacement (116.6 percent)
•Garage door replacement (98.7 percent)
•Basement remodel (84.3 percent)
•Attic bedroom (78.3 percent)
•Wooden window Replacement (76.9 percent)
•Vinyl siding replacement (75.5 percent)
•Minor kitchen remodel (74.2 percent)
•Major kitchen remodel (73.8 percent)
•Wooden deck addition (72.8 percent)
•Vinyl window replacement (71.5 percent)
Keep in mind that these numbers are just estimates and that every home is different; the cost of a new kitchen in one home could cost significantly less than the same project in another home, for example. We encourage you to talk to your Central Texas REALTOR®, as he or she can help you determine how to get the most bang for your buck when it comes to remodeling your home.
source
Recently, Remodeling Magazine and REALTOR® Magazine published their annual Remodeling Cost vs. Value Report for 2010, which takes 35 common remodeling projects and estimates the average recouped cost for each project in 80 cities across the United States. Although these itemized estimates are based on hypothetical projects for an average American home, they are helpful in providing an overview of remodeling costs.
On a national level, the report indicates that the largest percentage of recouped costs derived from such projects as steel entry door replacement (102.1 percent of costs returned), garage door replacement (83.9 percent of costs returned) and wooden deck additions (72.8 percent of costs returned). Many of the highest financial returns were seen from projects where building costs were less than $15,000.
On a local level, estimated recouped costs were much greater than most cities in the nation, according to the report. Below are the top ten remodeling projects that yielded the highest returns for homeowners in Austin, Texas in 2010:
•Steel entry door replacement (116.6 percent)
•Garage door replacement (98.7 percent)
•Basement remodel (84.3 percent)
•Attic bedroom (78.3 percent)
•Wooden window Replacement (76.9 percent)
•Vinyl siding replacement (75.5 percent)
•Minor kitchen remodel (74.2 percent)
•Major kitchen remodel (73.8 percent)
•Wooden deck addition (72.8 percent)
•Vinyl window replacement (71.5 percent)
Keep in mind that these numbers are just estimates and that every home is different; the cost of a new kitchen in one home could cost significantly less than the same project in another home, for example. We encourage you to talk to your Central Texas REALTOR®, as he or she can help you determine how to get the most bang for your buck when it comes to remodeling your home.
source
Tuesday, January 18, 2011
TDHCA offering $45M to homebuyer assistance program
The Texas Department of Housing and Community Affairs has announced the release of $45 million in mortgage credit certificate authority through the Texas Mortgage Credit Program. "Despite all the negatives we hear from other states, the fact is that the Texas economy – and the demand for homeownership – both remain quite healthy," says Michael Gerber, TDHCA executive director. "Many families want and are ready to take that exciting step toward homeownership, and TDHCA wants to help them achieve their dreams through safe, reliable homebuyer lending products offered through the state, coupled with responsible homebuyer education." The program provides a dollar-for-dollar reduction of a borrower's tax liability, not to exceed $2,000 annually, and is expected to help approximately 1,000 low- to moderate-income households in Texas purchase their first home.
This is great news! Click here to contact me to learn more.
This is great news! Click here to contact me to learn more.
Wednesday, April 7, 2010
Veteran Tax Exemptions in Texas
TAX EXEMPTION FOR VETERANS
Disabled veterans who meet certain requirements, their surviving spouses and the spouses and minor children of a person who dies on active duty in the U.S. Armed Forces are eligible for property tax exemptions on the appraised value of their property. The exemption is mandatory and applies to taxes levied by all taxing authorities in the State. A veteran, whose service-connected disabilities are rated less than 10% by the Department of Veterans Affairs, or a branch of the Armed Forces, is not entitled to a property tax exemption. For those rated 10% or more, the tax exemptions below apply:
Disability Rating
Tax Exemption
10% through 29%
First $ 5,000 of appraised value
30% through 49%
First $ 7,500 of appraised value
50% through 69%
First $ 10,000 of appraised value
70% or more
First $ 12,000 of appraised value
100%
100% Exemption
A veteran whose disability is 10% or more, and who is 65 years or older, is entitled to exemption of the first $12,000 of appraised value of property. A veteran whose disability consists of the loss of use of one or more limbs, total blindness in one or both eyes, or suffers paraplegia, is exempt on the first $12,000 of the appraised value of his property. A veteran who qualifies under more than one of the exemptions may not combine the exemptions, but may take the one providing the largest exclusion. The surviving spouse of a person who dies on active duty is entitled to exemption of the first $5,000 of the appraised value of the spouse's property. A surviving child of a person who dies on active duty is exempt on the first $5,000 of appraised value of the child's property, as long as the child is unmarried and under 21 years of age. The surviving spouse of a deceased veteran who, at the time of the veteran's death had a compensable disability and was entitled to an exemption, is also entitled to that exemption (up to $12,000) if the surviving spouse is unmarried. A surviving spouse is not eligible for a 100% exemption. This law is administered at the local level by the various taxing authorities. For answers to questions about property values, exemptions, agricultural appraisal, and protests to the appraisal review board, or to apply for exemptions, obtain an application from your appraisal district. PLEASE NOTE: APPLICATION MUST BE COMPLETED BETWEEN JANUARY 1 AND APRIL 30
Find more information at http://www.tvc.state.tx.us/StateBenefits.html
Disabled veterans who meet certain requirements, their surviving spouses and the spouses and minor children of a person who dies on active duty in the U.S. Armed Forces are eligible for property tax exemptions on the appraised value of their property. The exemption is mandatory and applies to taxes levied by all taxing authorities in the State. A veteran, whose service-connected disabilities are rated less than 10% by the Department of Veterans Affairs, or a branch of the Armed Forces, is not entitled to a property tax exemption. For those rated 10% or more, the tax exemptions below apply:
Disability Rating
Tax Exemption
10% through 29%
First $ 5,000 of appraised value
30% through 49%
First $ 7,500 of appraised value
50% through 69%
First $ 10,000 of appraised value
70% or more
First $ 12,000 of appraised value
100%
100% Exemption
A veteran whose disability is 10% or more, and who is 65 years or older, is entitled to exemption of the first $12,000 of appraised value of property. A veteran whose disability consists of the loss of use of one or more limbs, total blindness in one or both eyes, or suffers paraplegia, is exempt on the first $12,000 of the appraised value of his property. A veteran who qualifies under more than one of the exemptions may not combine the exemptions, but may take the one providing the largest exclusion. The surviving spouse of a person who dies on active duty is entitled to exemption of the first $5,000 of the appraised value of the spouse's property. A surviving child of a person who dies on active duty is exempt on the first $5,000 of appraised value of the child's property, as long as the child is unmarried and under 21 years of age. The surviving spouse of a deceased veteran who, at the time of the veteran's death had a compensable disability and was entitled to an exemption, is also entitled to that exemption (up to $12,000) if the surviving spouse is unmarried. A surviving spouse is not eligible for a 100% exemption. This law is administered at the local level by the various taxing authorities. For answers to questions about property values, exemptions, agricultural appraisal, and protests to the appraisal review board, or to apply for exemptions, obtain an application from your appraisal district. PLEASE NOTE: APPLICATION MUST BE COMPLETED BETWEEN JANUARY 1 AND APRIL 30
Find more information at http://www.tvc.state.tx.us/StateBenefits.html
Wednesday, March 17, 2010
FORBES: Austin best economic recovery in U.S.
The Austin-Round Rock area tied for first on a list of large metros where the recession is easing.
Central Texas tied Washington D.C. in the Forbes.com ranking that compiles job growth and real estate industry improvement, among other indicators. Washington has one of the lowest unemployment rates in the nation, 6.2 percent, and the city produced more goods and services than another other in 2008.
Austin has also maintained relatively lower jobless rates, though the number increased to 7.6 percent last month from 7 percent, according to the Texas Workforce Commission. Statewide, the rate was unchanged at 8.2 percent from December to January, compared to 9.7 percent nationally.
Austin and Washington D.C. also benefit from their high government job generation, according to Forbes. The number of Central Texas jobs increased just shy of 1 percent between 2007 and 2009, more than any other city included in the research.
Dallas came in second on the ranking behind Austin. The number of jobs there are expected to increase more than 7 percent in the next three years. San Antonio and Houston also made the top 10 list.
Job growth projections were based on information from Moody's. The listing also considered median home sale price changes and Metropolitan Gross Domestic Product.
Monday, March 8, 2010, 10:20am CST | Modified: Monday, March 8, 2010, 10:25am
See the article: http://austin.bizjournals.com/austin/stories/2010/03/08/daily2.html?ed=2010-03-08&ana=e_du_pub
Central Texas tied Washington D.C. in the Forbes.com ranking that compiles job growth and real estate industry improvement, among other indicators. Washington has one of the lowest unemployment rates in the nation, 6.2 percent, and the city produced more goods and services than another other in 2008.
Austin has also maintained relatively lower jobless rates, though the number increased to 7.6 percent last month from 7 percent, according to the Texas Workforce Commission. Statewide, the rate was unchanged at 8.2 percent from December to January, compared to 9.7 percent nationally.
Austin and Washington D.C. also benefit from their high government job generation, according to Forbes. The number of Central Texas jobs increased just shy of 1 percent between 2007 and 2009, more than any other city included in the research.
Dallas came in second on the ranking behind Austin. The number of jobs there are expected to increase more than 7 percent in the next three years. San Antonio and Houston also made the top 10 list.
Job growth projections were based on information from Moody's. The listing also considered median home sale price changes and Metropolitan Gross Domestic Product.
Monday, March 8, 2010, 10:20am CST | Modified: Monday, March 8, 2010, 10:25am
See the article: http://austin.bizjournals.com/austin/stories/2010/03/08/daily2.html?ed=2010-03-08&ana=e_du_pub
Monday, December 28, 2009
Austin Real Estate Stats- Nov. '09
According to the Multiple Listing Service report by the Austin Board of REALTORS®, the volume of Austin-area home sales continues to surge, increasing 58 percent in November 2009 compared to November 2008.
“This is the largest increase in year-over-year homes sales the Austin market has seen in more than ten years,” explained Jay Gohil, chairman of the Austin Board of REALTORS®.
In November 2009, there were a total of 1,576 home sales, contributing $377,603,296 to the local economy. The median home price for Austin in November 2009 was $179,000, a two percent decrease from the same month the prior year.
“The combination of steady home prices with increasing demand is very encouraging for the Central Texas real estate market,” said Gohil.
In the face of increasing sales volume, the Austin real estate market is seeing a decrease in home inventory. The Real Estate Center at Texas A&M University cites 6.5 months of inventory as a balanced market, meaning demand for homes is evenly balanced with inventory of homes for sale. At approximately 5.4 months of inventory for November 2009, demand for homes in the Austin real estate market is slightly outpacing inventory.
November 2009 Statistics
•$377,603,296 – Total dollar volume of single-family properties sold, a 62 percent increase from November 2008.
•$179,000 – Median price for single-family homes, a two percent decrease from November 2008.
•1,576 – Single-family homes sold, a 58 percent increase from November 2008.
Info provided by the ABoR. For more information, contact me right away!
“This is the largest increase in year-over-year homes sales the Austin market has seen in more than ten years,” explained Jay Gohil, chairman of the Austin Board of REALTORS®.
In November 2009, there were a total of 1,576 home sales, contributing $377,603,296 to the local economy. The median home price for Austin in November 2009 was $179,000, a two percent decrease from the same month the prior year.
“The combination of steady home prices with increasing demand is very encouraging for the Central Texas real estate market,” said Gohil.
In the face of increasing sales volume, the Austin real estate market is seeing a decrease in home inventory. The Real Estate Center at Texas A&M University cites 6.5 months of inventory as a balanced market, meaning demand for homes is evenly balanced with inventory of homes for sale. At approximately 5.4 months of inventory for November 2009, demand for homes in the Austin real estate market is slightly outpacing inventory.
November 2009 Statistics
•$377,603,296 – Total dollar volume of single-family properties sold, a 62 percent increase from November 2008.
•$179,000 – Median price for single-family homes, a two percent decrease from November 2008.
•1,576 – Single-family homes sold, a 58 percent increase from November 2008.
Info provided by the ABoR. For more information, contact me right away!
Thursday, December 10, 2009
How to Find the Right Home for Your Family
When beginning the process of finding a new home, it is often difficult to know where to begin. Before researching the market or analyzing housing options, homebuyers may want to start by prioritizing their family's needs, determining what are "must-haves" versus what are "nice-to-haves." Below are some factors you may want to consider when trying to find the right home for your family.
•Think Through Location: When you begin searching for the right home for your family, you may first want to determine what would be the best location. One of the best ways to find a home location that suits your family is to assess your needs and determine how much your family can compromise. For instance, do you have small children or pets that require a large backyard to play in? Or would you be equally happy taking your kids and dog to the local park? Do you need quiet surroundings, like a dead-end street, or do you prefer the hustle and bustle of metropolitan areas? These are the types of general assessments which may help you determine an ideal location for your family.
•Analyze Potential Neighborhoods: Though it may be easy to determine what type of environment your family wants to reside in, you will want to spend more time analyzing the details of the neighborhoods you are considering. As you try to determine which neighborhoods are best for your family, you may want to take into account such factors as the quality of nearby schools and the proximity to shopping or your workplace. After seeing what different neighborhoods have to offer, compare the pros and cons of each area you are considering to determine the best location for your family.
•'Visualize' Your Ideal Home: After you have a chance to look at a few homes and research various neighborhoods, try to visualize the best home for your family. Though you have probably already thought about how many bedrooms and bathrooms your family needs, consider keeping a list of desired amenities – both essential and those that you could live without – as you continue the home buying process. You may also want to consider what type of home construction your family needs, from a standard single-family home to a condominium or even a multi-family home. Upon viewing particular homes, you may realize that your family needs a certain amount of storage space or more overall square footage than you realized. Add and subtract from this list as you look at more homes, always keeping track of where your family can compromise.
•Keep An Open Mind: If you find a home that meets all of your family's needs but has a smaller than desired garage, you could still be faced with an opportunity that is too good to pass up. Furthermore, you might find the perfect home in a neighborhood you never thought to consider, or in a specific type of construction that was initially ruled out of your search. Quite simply, try not to limit your family's options too much and remain open-minded throughout the home buying process. You might even find a great home with special features you never thought your family could afford – like a pool, a spa or an extra fireplace.
When trying to find the best home for your family, try to stay organized and keep your priorities straight. As you look at different homes, try to consider how each property fits your family's needs. After finding some homes that meet your family's needs, you may then want to focus on each home's desirable extras to help narrow down your search. By making such lists and assessing your family's needs throughout the home buying process, you might be surprised how quickly you uncover the home of your dreams.
•Think Through Location: When you begin searching for the right home for your family, you may first want to determine what would be the best location. One of the best ways to find a home location that suits your family is to assess your needs and determine how much your family can compromise. For instance, do you have small children or pets that require a large backyard to play in? Or would you be equally happy taking your kids and dog to the local park? Do you need quiet surroundings, like a dead-end street, or do you prefer the hustle and bustle of metropolitan areas? These are the types of general assessments which may help you determine an ideal location for your family.
•Analyze Potential Neighborhoods: Though it may be easy to determine what type of environment your family wants to reside in, you will want to spend more time analyzing the details of the neighborhoods you are considering. As you try to determine which neighborhoods are best for your family, you may want to take into account such factors as the quality of nearby schools and the proximity to shopping or your workplace. After seeing what different neighborhoods have to offer, compare the pros and cons of each area you are considering to determine the best location for your family.
•'Visualize' Your Ideal Home: After you have a chance to look at a few homes and research various neighborhoods, try to visualize the best home for your family. Though you have probably already thought about how many bedrooms and bathrooms your family needs, consider keeping a list of desired amenities – both essential and those that you could live without – as you continue the home buying process. You may also want to consider what type of home construction your family needs, from a standard single-family home to a condominium or even a multi-family home. Upon viewing particular homes, you may realize that your family needs a certain amount of storage space or more overall square footage than you realized. Add and subtract from this list as you look at more homes, always keeping track of where your family can compromise.
•Keep An Open Mind: If you find a home that meets all of your family's needs but has a smaller than desired garage, you could still be faced with an opportunity that is too good to pass up. Furthermore, you might find the perfect home in a neighborhood you never thought to consider, or in a specific type of construction that was initially ruled out of your search. Quite simply, try not to limit your family's options too much and remain open-minded throughout the home buying process. You might even find a great home with special features you never thought your family could afford – like a pool, a spa or an extra fireplace.
When trying to find the best home for your family, try to stay organized and keep your priorities straight. As you look at different homes, try to consider how each property fits your family's needs. After finding some homes that meet your family's needs, you may then want to focus on each home's desirable extras to help narrow down your search. By making such lists and assessing your family's needs throughout the home buying process, you might be surprised how quickly you uncover the home of your dreams.
Wednesday, December 2, 2009
>> Market Update
INFO THAT HITS US WHERE WE LIVE The economic reports before Thanksgiving were packed with housing market data and, guess what, they were all extremely positive! Monday saw Existing Home Sales UP 10.1% to an annual rate of 6.10 million, the highest since February 2007. Sales are now UP 20% in the past two months and UP 36% from their January lows. Even better, the supply of existing homes was down to just 7 months, with inventories down to 3.57 million, the lowest level in almost three years. This puts existing homes very close to the 6-month supply level of a healthy housing market. The Case-Shiller 20-City Composite Home Price Index rose 0.3% in September. The index also showed its second consecutive quarterly increase, UP 3.1% for Q3, returning to August 2003 levels.
Wednesday, New single-family Home Sales were UP 6.2% in October to an annual rate of 430,000 units. New Home Sales are now UP 30.7% over their January low. The unsold supply of new homes dropped to 6.7 months as of October, with inventories at 239,000, 58.2% down from their mid-2006 peak and at their lowest level since mid-1971. The median price was down only 0.5% from a year ago and average price down just 4.7%.
Freddie Mac reported mortgage rates down for the fourth straight week, reaching historic lows well below 5%, with an average 0.7 point, for prime borrowers with 20% down payments. Freddie Mac's chief economist said, "Interest rates for 30-year fixed-rate loans are currently 0.8 percentage points below this year's peak set in mid-June, which shaves roughly $100 off the monthly payments on a $200,000 mortgage."
>> Review of Last Week
TWO KINDS OF BLACK FRIDAY... Leading up to Thanksgiving, we had lots to be grateful for, with market gains and encouraging economic reports. Retailers' Black Friday exceeded expectations, but unfortunate financial news from Dubai turned Wall Street's Friday a depressing black, with the Dow losing 154 points on the day. The Dubai government announced there would be a six-month "standstill" on debt repayments for Dubai World, its holding company. This sent world markets reeling with fears of multi-billion dollar defaults. But Dubai is part of the super-wealthy United Arab Emirates (U.A.E.), which should provide deep support. In addition, Dubai's debt is mostly held by U.K. and European banks, with little U.S. involvement. The situation bears watching, although our recovery remains clearly on track.
On Tuesday, for example, Q3 GDP growth was revised down to a still substantial 2.8% annual rate. The key item in the report was the look at Q3 corporate profits, which grew at a very strong 50% annual rate, the third consecutive quarterly increase. Wednesday, initial jobless claims dropped to 466,000, sending the four-week moving average down to 496,500, below the level a year ago. Continuing claims are now down to 5.423 million. The Richmond Fed Manufacturing index showed expansion of activity for the seventh straight month.
Consumer Confidence went up to 49.5 for November, beating consensus estimates. This tied in nicely with Wednesday's reports showing personal incomes are rising, consumer spending is up and the savings rate is 4.4% vs. 1.7% just two years ago. Even non-mortgage consumer debt is down 5% from its mid-2008 peak.
Nonetheless, the Dubai surprise left the Dow off 0.1% for the week, at 10309.92; the S&P 500 was up just 0.11 points, to 1091.49; while the Nasdaq slipped 0.4%, to 2138.44.
Prices held higher in the bond market, as investors anticipate the fall-out from Dubai and its state supported debt issues. The FNMA 30-year 4.5% bond we watch ended up 72bp from the previous week's close, finishing at $102.50. Mortgage rates, as noted above, fell last week to historically low levels!
>> This Week’s Forecast
FOCUS ON JOBS... The week opens with insight into the continually improving manufacturing sector, while Pending Home Sales figures hold our interest on Tuesday. But the real focus for the week will be on Friday's November jobs report. Analysts will be looking for further signs of recovery in this lagging economic indicator. The consensus expects the unemployment rate to plateau, which is an improvement over rates on the rise.
>> 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 November 30 – December 4
Date Time (ET) Release For Consensus Prior Impact
M
Nov 30 09:45 Chicago PMI Index Nov 53.0 54.2 HIGH
Tu
Dec 1 10:00 ISM Index Nov 54.8 55.7 HIGH
Tu
Dec 1 10:00 Pending Home Sales Oct –0.5% 6.1% Moderate
W
Dec 2 10:30 Crude Inventories 11/27 NA 1.02M Moderate
Th
Dec 3 08:30 Initial Unemployment Claims 11/28 483K 466K Moderate
Th
Dec 3 08:30 Continuing Unemployment Claims 11/21 5.517M 5.423M Moderate
Th
Dec 3 08:30 Productivity–Rev. Q3 8.5% 9.5% Moderate
Th
Dec 3 08:30 Employment Cost Index Q4 NA 0.4% HIGH
Th
Dec 3 10:00 ISM Services Index Nov 51.5 50.6 Moderate
F
Dec 4 08:30 Average Workweek Nov 33.1 33.0 HIGH
F
Dec 4 08:30 Hourly Earnings Nov 0.2% 0.3% HIGH
F
Dec 4 08:30 Nonfarm Payrolls Nov –114K –190K HIGH
F
Dec 4 08:30 Unemployment Rate Nov 10.2% 10.2% HIGH
>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months. The Fed continues to affirm it will keep rates down until the recovery looks more solid, but inflation is always a concern. Overall consumer prices in the last six months are up at an annual rate of 2.7%, but economists don't expect any rate changes in the near future. 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: Consensus
Dec 15 0%–0.25%
Jan 27 0%–0.25%
Mar 16 0%–0.25%
Probability of change from current policy:
After FOMC meeting on: Consensus
Dec 15 1%
Jan 27 1%
Mar 16 3%
More details on this can be found by contacting Brian Patschke with Prime Lending at bpatschke@primelending.com
INFO THAT HITS US WHERE WE LIVE The economic reports before Thanksgiving were packed with housing market data and, guess what, they were all extremely positive! Monday saw Existing Home Sales UP 10.1% to an annual rate of 6.10 million, the highest since February 2007. Sales are now UP 20% in the past two months and UP 36% from their January lows. Even better, the supply of existing homes was down to just 7 months, with inventories down to 3.57 million, the lowest level in almost three years. This puts existing homes very close to the 6-month supply level of a healthy housing market. The Case-Shiller 20-City Composite Home Price Index rose 0.3% in September. The index also showed its second consecutive quarterly increase, UP 3.1% for Q3, returning to August 2003 levels.
Wednesday, New single-family Home Sales were UP 6.2% in October to an annual rate of 430,000 units. New Home Sales are now UP 30.7% over their January low. The unsold supply of new homes dropped to 6.7 months as of October, with inventories at 239,000, 58.2% down from their mid-2006 peak and at their lowest level since mid-1971. The median price was down only 0.5% from a year ago and average price down just 4.7%.
Freddie Mac reported mortgage rates down for the fourth straight week, reaching historic lows well below 5%, with an average 0.7 point, for prime borrowers with 20% down payments. Freddie Mac's chief economist said, "Interest rates for 30-year fixed-rate loans are currently 0.8 percentage points below this year's peak set in mid-June, which shaves roughly $100 off the monthly payments on a $200,000 mortgage."
>> Review of Last Week
TWO KINDS OF BLACK FRIDAY... Leading up to Thanksgiving, we had lots to be grateful for, with market gains and encouraging economic reports. Retailers' Black Friday exceeded expectations, but unfortunate financial news from Dubai turned Wall Street's Friday a depressing black, with the Dow losing 154 points on the day. The Dubai government announced there would be a six-month "standstill" on debt repayments for Dubai World, its holding company. This sent world markets reeling with fears of multi-billion dollar defaults. But Dubai is part of the super-wealthy United Arab Emirates (U.A.E.), which should provide deep support. In addition, Dubai's debt is mostly held by U.K. and European banks, with little U.S. involvement. The situation bears watching, although our recovery remains clearly on track.
On Tuesday, for example, Q3 GDP growth was revised down to a still substantial 2.8% annual rate. The key item in the report was the look at Q3 corporate profits, which grew at a very strong 50% annual rate, the third consecutive quarterly increase. Wednesday, initial jobless claims dropped to 466,000, sending the four-week moving average down to 496,500, below the level a year ago. Continuing claims are now down to 5.423 million. The Richmond Fed Manufacturing index showed expansion of activity for the seventh straight month.
Consumer Confidence went up to 49.5 for November, beating consensus estimates. This tied in nicely with Wednesday's reports showing personal incomes are rising, consumer spending is up and the savings rate is 4.4% vs. 1.7% just two years ago. Even non-mortgage consumer debt is down 5% from its mid-2008 peak.
Nonetheless, the Dubai surprise left the Dow off 0.1% for the week, at 10309.92; the S&P 500 was up just 0.11 points, to 1091.49; while the Nasdaq slipped 0.4%, to 2138.44.
Prices held higher in the bond market, as investors anticipate the fall-out from Dubai and its state supported debt issues. The FNMA 30-year 4.5% bond we watch ended up 72bp from the previous week's close, finishing at $102.50. Mortgage rates, as noted above, fell last week to historically low levels!
>> This Week’s Forecast
FOCUS ON JOBS... The week opens with insight into the continually improving manufacturing sector, while Pending Home Sales figures hold our interest on Tuesday. But the real focus for the week will be on Friday's November jobs report. Analysts will be looking for further signs of recovery in this lagging economic indicator. The consensus expects the unemployment rate to plateau, which is an improvement over rates on the rise.
>> 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 November 30 – December 4
Date Time (ET) Release For Consensus Prior Impact
M
Nov 30 09:45 Chicago PMI Index Nov 53.0 54.2 HIGH
Tu
Dec 1 10:00 ISM Index Nov 54.8 55.7 HIGH
Tu
Dec 1 10:00 Pending Home Sales Oct –0.5% 6.1% Moderate
W
Dec 2 10:30 Crude Inventories 11/27 NA 1.02M Moderate
Th
Dec 3 08:30 Initial Unemployment Claims 11/28 483K 466K Moderate
Th
Dec 3 08:30 Continuing Unemployment Claims 11/21 5.517M 5.423M Moderate
Th
Dec 3 08:30 Productivity–Rev. Q3 8.5% 9.5% Moderate
Th
Dec 3 08:30 Employment Cost Index Q4 NA 0.4% HIGH
Th
Dec 3 10:00 ISM Services Index Nov 51.5 50.6 Moderate
F
Dec 4 08:30 Average Workweek Nov 33.1 33.0 HIGH
F
Dec 4 08:30 Hourly Earnings Nov 0.2% 0.3% HIGH
F
Dec 4 08:30 Nonfarm Payrolls Nov –114K –190K HIGH
F
Dec 4 08:30 Unemployment Rate Nov 10.2% 10.2% HIGH
>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months. The Fed continues to affirm it will keep rates down until the recovery looks more solid, but inflation is always a concern. Overall consumer prices in the last six months are up at an annual rate of 2.7%, but economists don't expect any rate changes in the near future. 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: Consensus
Dec 15 0%–0.25%
Jan 27 0%–0.25%
Mar 16 0%–0.25%
Probability of change from current policy:
After FOMC meeting on: Consensus
Dec 15 1%
Jan 27 1%
Mar 16 3%
More details on this can be found by contacting Brian Patschke with Prime Lending at bpatschke@primelending.com
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