MMG Weekly: Home Buyers - Prepare for Action
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| For the week of Sep 14, 2009 --- Vol. 7, Issue 37 |
| Last Week in Review |
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| "BEFORE ANYTHING ELSE...PREPARATION IS THE KEY TO SUCCESS." Alexander Graham Bell. Very true words - and preparation is especially important these days, as several circumstances will make this fall a particularly successful time for prepared home buyers. Rates for home loans remain low - but it won't last forever. The Fed continues on their purchasing plan of Mortgage Backed Securities, and the added demand has kept Bond prices high and home loan rates low. Last week, they purchased another $32.4B, bringing the total to $849B out of the $1.25T they committed to. While these Fed purchases have helped home loan rates stay near present low levels, remember that their buying program is set to be over near the end of the year. There is talk that the program will be extended - but there has also been talk that it will end early - so nothing is a guarantee, except for the fact that when the Fed purchasing program is over, home loan rates will assuredly rise. In addition, given the current expiration date of November 30, 2009 for the $8,000 First Time Homebuyer credit, it's important for homebuyers to get prepared, and take action. In fact, many homebuyers are doing just that already. The Mortgage Bankers Association reported that home loan applications surged in the latest week to their highest level since late May, as more buyers are seeing the great opportunity that exists right now. Let me know if I can answer any questions for you, or perhaps a friend, family member, neighbor or coworker that might be thinking about a home purchase. The combination of reduced home prices, motivated sellers, low home loan rates, and the potential of a juicy tax credit is too great an opportunity to miss. The Stock market is doing well - and as you can see in the chart below, the S&P 500 Index closed at its highest level of 2009 last Thursday. The S&P 500 is a basket of 500 Stocks that are considered to be widely held, and is considered by most market experts as one of the best benchmarks available to judge overall US Stock market performance. ----------------------- In other economic news, Consumer Sentiment came in stronger than expected and Initial Jobless Claims were also reported better than expected, but still at a high level. Continuing Claims, which represent the number of people still receiving unemployment benefits, dropped a bit, but this realistically may be due to benefits expiring rather than people finding new jobs. PREPARATION IS ESPECIALLY IMPORTANT WHEN IT COMES TO EMERGENCIES! AND SINCE SEPTEMBER IS "EMERGENCY PREPAREDNESS MONTH", CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME IMPORTANT TIPS ON SURVIVING EMERGENCIES INTACT. |
| Forecast for the Week |
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| Be prepared for a jam-packed week of economic reports ahead! Tuesday brings both the Retail Sales Report, which is the most-timely indicator of broad consumer spending patterns, and the Producer Price Index (PPI), which provides information about inflation at the wholesale level. There will also be more inflation news coming on Wednesday with the Consumer Price Index (CPI). CPI is an important measurement of inflation (and deflation) because it measures the average prices paid by consumers for goods and services, and what the change is in those prices over time. And things won't slow down then...Thursday will bring a read on the housing market with the Housing Starts and Building Permits Report, followed by a read on manufacturing with the Philadelphia Fed Report, which is one of the most widely-watched manufacturing reports. Thursday will also bring another Initial Jobless Claims Report. This weekly report continues to be important to watch as the job market plays a key role in our economic recovery. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds have been able to remain above a key technical support level, and I'll be watching closely to see if Bonds and rates continue to improve. Chart: Fannie Mae 4.5% Mortgage Bond (Friday Sep 11, 2009) |
| The Mortgage Market View... |
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| Are you prepared in the event of an earthquake, tornado, blackout, or worse? No one ever expects to be in an emergency situation - but those who have, generally wish they had been better prepared. September is National Preparedness Month, and the Department of Homeland Security's Federal Emergency Management Agency (FEMA) want to make sure you're prepared in the event of an emergency such as a flood, tornado or blackout. Hopefully you'll never be faced with an emergency situation of your own, but if you are, having an emergency kit will help ensure that you and your loved ones will have the bare necessities such as food, water, and items to keep you warm. Determining all the right items for each member of your family, your pets, and those with special needs could normally be a very grueling process - but thanks to FEMA's http://www.ready.gov website, it's easy! To help you get started preparing your emergency kit, FEMA has developed a user friendly website that allows you to download and print all of the items that you will need to gather for an Emergency Kit. Simply visit the special Emergency Kit webpage for a quick list of the basic emergency items you need to have on hand, as well as additional items you should consider adding to your kit. Take a few minutes to visit the site, and forward this article on to your friends, family members, and colleagues. Or better yet, prepare a starter kit for them as a gift while you're preparing one for yourself. That way, when the power snaps off unexpectedly - or worse - you won't be caught off guard. |
| The Week's Economic Indicator Calendar |
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| Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of September 14 - September 18
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| The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors. As your trusted advisor, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you. In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: david@fne.com If you prefer to send your removal request by mail the address is: David Black First New England Mortgage, FNE, Aberdeen Mortgage - Licenses Massachusetts MB5239 Colorado No License Required New Hampshire Licensed by the New Hampshire Banking Department Connecticut First Mortgage Lender/Broker #0001925 Maine Supervised Lender SLM6916 Arizona Mortgage Banker BKBR - 0107550 Rhode Island Loan Broker License Number 20031586LB Colorado Licensed at Loan Officer is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. does not grant to you a license to any content, features or materials in this email. You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.
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