Perspective!

I had a situation last week that was a test of my patience. I try to look at ‘tests’ as opportunities to grow and learn from, yet sometimes I fail.

This situation, a few years ago, would have made me go a little nuts. I think with age, comes wisdom and perspective. I viewed this situation differently and put it in its place. I knew it would be resolved, and my going crazy over it wouldn’t help.

In the end, it was resolved and all was good. Perspective can make or break our experiences, with anything in life. I’m going to try and step back and view situations from all angles, before ‘reacting.’

Hopefully, this will add years to my life and quality to my days. 🙂

 Onto the market update…

 Despite the makings for a very volatile week in the stock market, the indices remained in a relatively narrow range of trading. Between all of the economic reports released this week, and the constant release of Executive Orders from President Trump, investors continue to be taking a wait and see attitude on everything.

Finally, after being strong but stagnant in growth, pending home sales might finally be rising. For the month of December, the index rose a strong 1.6 percent. This was above Econoday’s highest estimate for an increase. This rise points to strong sales numbers for January and February. Pending sales were strongest in the West with a 5.0 percent increase. The Midwest trailed with an increase of 3.4 percent.

Case-Shiller’s home price index, which had shown little movement in recent months, jumped in November by 0.9 percent. This was the strongest gain since dating back to March 2015. Home prices continue to remain higher from the same time last year. Currently the spread is 5.3 percent. The East appeared to lead the country in price appreciation for the most recent monthly report. New York, which has been flat, jumped a surprising 1.2 percent in November. Despite the increase, New York continues to be the weakest of the 20 cities in the index for overall year on year growth. Boston also enjoyed nice upward movement with price appreciation of 1.2 and 1.0 percent for the last two monthly reports. Prices are also 5.5 percent higher than the same time last year. Not surprising, the West, especially the Pacific Northwest, continues to be the leader in overall yearly price appreciation. Seattle is up 10.4 percent from the same time last year and Portland, Oregon is higher by 10.1 percent.

To no surprise, the Fed did not increase rates at their FOMC meeting this week. The Fed kept monetary policy the same, however there seems to be slightly different language in their summary that upgrades the likelihood of inflation later this year. The Fed confirmed that they do have plans for rate hikes later this year, however exactly when they will occur has not been determined. Economic data will drive the Fed’s decision as to when and how much to raise rates.

The housing market continues to hum along with stable demand. Inventory remains low in many parts of the country. The Mortgage Bankers Association of American reported that purchase applications for the week of January 27th fell a seasonally adjusted 6.0 percent. Refinances dropped 1.0 percent. However, unadjusted, the purchase index jumped 12 percent from the previous week, which is higher than the same time last year by 2 percentage points. (Seasonal adjustment is a statistical method for removing the seasonal component of a time series that exhibits a seasonal pattern)

Finally, U.S. employers added 22,700 jobs in January. This is the highest growth in employment in four months. Friday’s report was far above all analyst’s estimates which topped out at 175,000.

Next week’s many potential market moving reports are:

 

  • Tuesday February 7th – JOLTS Report
  • Wednesday February 8th – MBA Applications
  • Thursday February 9th – First Time Jobless Claims
  • Friday February 10th – Consumer Sentiment

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at 661-618-1789.

 

My gift for your teens…and your market update.

As you probably know, I have a deep desire to educate and empower our youth with money smarts. In fact, if you haven’t visited my website, please do so here.

With the upcoming school semester starting, I would love to offer you an opportunity to get this material into your teens or college bound kids now! This information is invaluable and will lay the foundation for a financially peaceful future, something we all want for our children.

My Online Money School is an easy way for your kids to watch money lessons from their computer. The videos are short and easy to watch. Learn more about what we cover here.

I would like to offer you a 20% discount, good through 8/20/16 on the Complete Online Money School program. Just enter coupon code ‘summer2016’ and your discount will automatically be calculated!

Enjoy!

Onto the market update…

Mortgage Rates and Applications: Despite the fact that interest rates dropped slightly for the week ending July 29th, applications for both refinances and purchases declined 2.0 percent and 4.0 percent, respectively. This is the third consecutive week of declines in purchases. Additionally, it is the lowest pace of home purchases since February. Applications are currently running only 6.0 percent higher than the same time last year.

The question that some industry insiders are asking is “is the well running dry for refinancing?” Despite mortgage rates having declined slightly, this week’s decline in applications follows last week’s double digit drop of 15.0 percent.

Employment: As was expected, the ADP Employment Report, which provides data on private payrolls, showed that for the month of July, companies increased payrolls by 179,000. This figure was on the upper end of analyst’s expectations. The ADP Employment report this year has been far more accurate than last year.
Construction Spending: Although expectations were that spending in this sector would rise somewhere in the area of 0.6 percent, it actually declined by 0.6 percent for the month of June. May was revised with an improvement from 0.8 percent down to only a minimal drop of 0.1 percent.

Single-family construction fell 0.4 percent, which extends the negative path dating back to March. Overall, construction spending is up 4.8 percent from last year in June. One of the bright sides of this month’s report is that it appears that home improvement spending in the residential sector is up by 1.2 percent.

First Time Jobless Claims: Claims for the week ending July 30th moved up slightly to 269,000. This is an increase of 3,000 from the prior week. Overall claims remain well below the psychological benchmark of 300,000. The upward trend needs to be watched as in recent weeks there have been more increases in claims than declines.

EIA Petroleum Status: The only way you would not know that gas prices have been dropping is if you don’t use a car. With oil prices having dipped below $40 a barrel earlier in the week, we are seeing the cost of filling our vehicles steadily moving lower. This is also a reversal of the typical trend of higher gas prices during the peak driving months.

Petroleum inventories jumped by 1.4 million barrels in the week of July 29th. The overall gain in storage has increased by 14.8 percent from the same time last year. Even though refineries have cut back production slightly, it seems that less oil is being used by consumers. Next week’s potential market moving reports are:

 

  • Monday August 8th – Labor Market Conditions
  • Tuesday August 9th – Small Business Optimism Index
  • Wednesday August 10th – MBA Mortgage Applications and EIA Petroleum Report
  • Thursday August 11th – First Time Jobless Claims
  • Friday August 12th – Retail Sales, Producer Price Index, and Consumer Sentiment

 

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at 661-618-1789.