New Year-New Book!

I hope your holidays and New Year celebrations were wonderful! I was able to enjoy a little down time, including a trip to Disneyland. I love that place during Christmas! The lights and decorations bring out the kid in me.

I was also able to work on the final pieces of my new book, “Money Rules 101- Master Your Money Before it Masters You,” which should be out February! I’m super excited about this book, as I know it will help everyone who reads it. I’ll be starting an interest list soon, so watch for that coming!

Enjoy your weekend!

 Onto the market update…

Now that the holidays are over, let’s see if the Dow Jones Industrial Average can break the 20,000 mark. Last week the index came very close, but investor concerns about U.S. and China trade relations had many sitting on the sidelines. In addition, many people are just getting back from vacation and getting things going for the New Year and the stock market was not their primary focus.

Even though this week had enough economic news to impact the markets, it did not seem like many were paying attention. The ADP Employment Report, which typically can draw a significant market reaction, didn’t seem to do much in the investment community. ADP reported a softer labor report than most experts had anticipated. ADP announced that 153,000 new jobs were added in December. Analysts were expecting closer to 172,000.

In the housing market, construction spending picked up heading into the latter part of the year. The latest report for November 2016 showed a jump in spending by 0.9 percent. That was significantly higher than analyst’s expectations. Additionally, the spread between construction spending at this point versus the prior year increased to 4.1 percent. This was a healthy increase from the prior month in which the spread year over year was only 3.4 percent. This is the best reading on construction spending since June 2016. Residential construction accounted for a 1.0 percent increase in the report and the largest portion of the gain was in single family sector.

The Mortgage Bankers Association of American reported huge declines in refinance applications for the final week of the year. According to the MBA’s latest report, refinance applications declined 22.0 percent. Purchase applications only dipped 2.0 percent despite it being a major vacation week. Mortgage rates have stopped moving upward and have even declined slightly in the last couple of weeks. Now that the holidays are over, many eyes will be watching the direction of the housing market. Many experts are anticipating the purchase and sale market to be the best since the 2008 recession.

On Wednesday, the FOMC released their minutes from the Open Market Committee Meeting. The theme that seemed to come from reading the minutes is that the Fed is taking a wait and see attitude toward future rate increases. There are many uncertainties regarding future government spending and tax cuts under the Trump presidency. Any of the talked about initiatives can have a major impact on inflation and economic productivity. For the time being, the Fed is planning for two interest rate increases in 2017. However, they clearly indicated that they will adjust their forecasts as needed with so much unchartered governmental decisions lying ahead.

Next week’s potential market moving reports are:

 

  • Monday January 9th – Labor Market Index
  • Tuesday January 10th – JOLTS Report
  • Wednesday January 11th – MBA Applications
  • Thursday January 12th – First Time Jobless Claims
  • Friday January 13th – Producer Price Index and Retail Sales

 

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.

 

Here’s what is moving…

I can’t seem to get my head around the fact that we are 9 days away from Christmas. Honestly, how does that happen?

It seems the older I get, the faster time flies. It should be the other way around, don’t you think? As we age, time should move slowly, just like we do as we get older. 🙂

Speaking of moving, if you’re thinking of buying a new home, we should talk. Rates are moving, so we should strategize a game plan together. Whether rates move slowly or not is yet to be seen. I personally, don’t expect them to move rapidly. Unlike the holidays approaching…

Happy weekend and happy shopping!

Onto the market update…

As expected, the Fed raised interest rates by .25% at their FOMC meeting this week. What was not expected was the projection of three rates increases in 2017. Investors were expecting to hear that only two increases would be forthcoming. On this news, the bond market took a beating and yields rose rapidly. The threat of inflation works against bond values, which simply put, means mortgage rates rose higher on the Fed announcement.

To keep things in perspective, it is important to understand that the Fed is only projecting the increases. As we have experienced for many years, the Fed will change their forecasts based upon economic data, so the increases are not guaranteed.

The stock market has been hovering very close to the 20,000 mark for the entire week. The “Trump” factor, as it is now being called, is keeping consumer optimism at the highest level since the recession. The belief that Trump’s plans for reduction in regulation, which is blamed for stifling economic growth, will bolster the economy and labor markets significantly in the next couple of years. There is no guarantee on the results of his economic policies, but the perception for strong economic growth remains high.

The increase in mortgage rates is taking its toll on loan applications according to the Mortgage Bankers Association of America. The latest report for the week ending December 9th is that purchase applications declined 3.0 percent and refinances dropped 4.0 percent. Although some of the decline can be attributed to rising rates, we also must take note that we are heading into the final stretch of the holiday season. It is common for housing activity to slow at this time of year.

On a positive note, many experts are predicting that the housing market will increase significantly in 2017. With the projected improvement in economic conditions, the labor market should continue to expand, and personal incomes are expected to rise more than they have in years. Inflation, which is likely to increase in the coming year, leads to increased wage growth. This will most likely lead to more consumers jumping into the housing market. Even though interest rates may continue to increase, when there is positive consumer sentiment, more money tends to go into housing.

Further bolstering the sentiment that people are feeling better about the direction of the economy, producer prices rose by 0.4 percent for November. Despite that energy prices declined slightly, other areas of the economy are showing improvement which is a clear sign of positive sentiment by consumers. The Fed has wanted inflation to increase and it seems that it is beginning to occur, actually faster than anticipated. Unemployment continues to remain at very low levels.

Leading into the holiday weekend, the Bond Market will close at 2:00PM next Friday.

Next week’s potential market moving reports are:

 

  • Thursday December 22nd – First Time Jobless Claims & FHFA House Price Index
  • Friday December 23rd – New Home Sales

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 rant on social media…and your market update

As much as I enjoy social media, I’m beginning to wonder about Facebook. Not Facebook itself necessarily, I’m referring to the constant negative information and comments. If it isn’t politics, it’s about the latest murder, accidents or wrongdoing.

Don’t get me wrong, I don’t have my head in the sand with regards to world events, I just need a break from it. I stopped watching the evening news a long time ago for this reason. It just became so depressing!

I prefer to read uplifting stories, such as people doing great things in the world or about the newest medical miracle. There are a lot of wonderful things happening all around us and I feel if we focus on what is right in this world, rather than what is wrong, we may just have a happier planet.

Just my two cents…

Onto the market update…

There was a significant amount of housing data to digest this week. The beginning of the week brought us the release of the housing market index. This index, which measures overall confidence of home builders, remained unchanged for a third straight month at 58, for the month of April. This reading continues to signal solid confidence amongst home builders. Adding to the positive sentiment of the report was the expectations for sales- the next six months remains strong. The West is leading the way for builder confidence, which reinforces just how important this region of the country is for the new home sector. The South, which is the largest housing region, remained strong as well. The Northeast, which is the smallest sector, trails the rest of the country by a significant margin. Although builder confidence is high, housing starts fell a sharp 8.8 percent in March. The surprise for this report is we are now in the spring housing season and typically starts would be increasing. Permits for new construction also came in below expectations. Economists do not seem to have a consensus as to the reason for the drop. We will have to wait and see next month’s report, to determine if there is a negative trend developing.

The weakness in housing starts is split pretty much evenly between single-family and multi-family sectors. The bright side to the report is the year-on-year rates for starts are up 14.2 percent and permits are 4.6 percent ahead. Existing home sales jumped 5.1 percent to a 5.330 million annualized rate for the month of March. February’s revised numbers showed a decline of 7.3 percent. Overall sales are just a meager 1.5 percent higher than the same time last year. The good news is that when you look at the first quarter as a whole, existing home sales are up 4.8 percent. March’s gain in sales was spearheaded by single family homes, which is the most important measured component. Single family sales rose 5.5 percent. Year-on-year, single-family homes are up 2.6 percent. Existing condominium sales are up only 1.8 percent for the month; however they are down compared to the same time last year by 6.6 percent.

Home prices seem to be somewhat flat in many parts of the country. The Federal Housing Finance Agency reported that home prices rose just 0.4 percent in February. This is the softest gain in home prices since August of last year. Year-on-year home prices are up 5.6 percent. Next week week’s potential market moving reports are:

Monday April 25th – New Home Sales

  • Tuesday April 26th – Durable Goods Orders and S&P Case-Shiller House Price Index
  • Wednesday April 27th – MBA Applications, Pending Home Sales, FOMC Announcement
  • Thursday April 28th – First Time Jobless Claims and GDP

 

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.