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Fed Cuts Interest Rate to a Historic Low

by Jason Daniels

The Federal Reserve made an announcement last Tuesday that it was cutting the Federal Funds rate from 1.0% to 0.25%, a historical move.  They are hoping to combat the U.S. market lull head on with this aggressive move.  The fed fund rate is the percentage banks charge when they borrow money from each other.  The funds rate serves as a benchmark for a wide range of loans in the U.S. economy.

The Fed’s rate cut was larger than expected.   The move highlighted the Fed’s determination to act aggressively along with the reality that the U.S. recession is deepening rapidly.

In theory, the Fed’s action should reduce the cost of borrowing for consumers and businesses, since the prime rate-what banks charge their best customers-moves in tandem with the federal funds rate.

The prime rate typically influences rates for car loans, student loans, credit cards and other debt. With Tuesday’s cut, the prime rate is expected to fall to 3.0 to 3.25% from 4%.  This move to cut rates had a positive effect on Wall Street earlier this week with positive gains.

The Fed has little room left to maneuver on interest-rate policy now and will use other tools.   The Fed statement said that the central bank was weighing the possibility of purchasing long-term Treasury bonds, which would drive down their yield and make other investments such as corporate and municipal bonds more attractive.

The Fed’s statement also said that it will extend credit to households and small businesses early next year. Other experts think that the Fed will increase its purchases of troubled assets to unclog credit markets.

The Fed already has become the buyer of last resort for financial products that aren’t moving in today’s frozen credit markets. It’s bypassed banks and is purchasing short-term promissory notes issued by big U.S. corporations, called commercial paper. It’s also announced plans to buy pooled car loans, student loans and credit card debt, collectively called asset-backed securities.

In another creative step to boost the housing market, the central bank also has been purchasing pooled mortgages-called mortgage-backed securities-and debt issued by Fannie Mae and Freddie Mac, the mortgage finance giants that the government seized in September. The senior Fed official said that efforts to purchase mortgages backed by Fannie Mae and Freddie Mac were being ramped up.

It appears for now that the governments actions and aggressive decisions have helped the economy from slipping any further at this point in time.  With a new president in the White House, a new Senate, and new  House of Representatives taking over in a few weeks it is unknown if these actions will have a long term effect on the U.S. economy.

Now is definitely a great time to buy real estate.  First time home buyers, move-up buyers looking for a larger or nicer home, investors, and anyone else who wants to take advantage of these historically low rates and low home prices.  The interest rates for a 30 year fixed loan have been hovering around 5.0%.  On average, for every $100,000 in a loan, a buyer will save around $100 per month with a loan at 5% when compared to a 6% interest rate.  That is real money saved in your pocket, or if gives you more purchasing power when selecting a home.   That extra $100 per month would allow a buyer around $14,000 more purchasing power.

 

www.jasondanielshomes.com

Colorado Springs Local Market Update - December 2008

by Jason Daniels
Presented by: Jason Daniels
my picture logo
 
For the Colorado Springs Area
LISTING AND SALES SUMMARY
For the Colorado Springs Area
November 2008
 
                                                       All Homes                                                     Existing Homes  
MONTHLY SUMMARY                    
    Oct 2008 Nov 2008 % +/- Nov 2007 % +/-   Oct 2008 Nov 2008 % +/- Nov 2007 % +/-
SINGLE FAMILY/PATIO HOMES:                    
  New Listings 1,302 951 (27.0) 1,211 (21.5)   1,210 878 (27.4) 1,113 (21.1)
  Sales 649 499 (23.1) 667 (25.2)   585 445 (23.9) 574 (22.5)
  Ave. Sales Price $230,012 $213,466 (7.2) $252,074 (15.3)   $216,759 $197,871 (8.7) $238,724 (17.1)
  Median Sales Price $189,000 $187,000 (1.1) $207,500 (9.9)   $181,500 $178,900 (1.4) $199,850 (10.5)
  Total Active 5,841 5,547 (5.0) 5,967 (7.0)   5,167 4,897 (5.2) 5,168 (5.2)
                         
CONDO/TOWNHOMES:                      
  New Listings 166 140 (15.7) 160 (12.5)   146 125 (14.4) 128 (2.3)
  Sales 83 62 (25.3) 85 (27.1)   69 48 (30.4) 71 (32.4)
  Ave. Sale Price $149,204 $154,641 3.6 $138,036 12.0   $146,128 $131,944 (9.7) $125,834 4.9
  Median Sale Price $132,000 $146,250 10.8 $130,000 12.5   $118,297 $114,950 (2.8) $121,000 (5.0)
  Total Active 889 853 (4.0) 970 (12.1)   689 676 (1.9) 755 (10.5)
                         
CUMULATIVE YTD SUMMARY                  
      Jan-Nov 2008   Jan-Nov 2007 % +/-     Jan-Nov 2008   Jan-Nov 2007 % +/-
SINGLE FAMILY/PATIO HOMES:                    
  New Listings   16,881   19,730 (14.4)     15,648   18,029 (13.2)
  Sales   7,844   9,351 (16.1)     7,096   8,335 (14.9)
  Ave. Sales Price   $239,951   $260,019 (7.7)     $228,050   $246,637 (7.5)
  Volume   $1,882,175,644   $2,431,437,669 (22.6)     $1,618,242,800   $2,055,719,395 (21.3)
                         
CONDO/TOWNHOMES:                    
  New Listings   2,422   2,803 (13.6)     2,003   2,374 (15.6)
  Sales   1,026   1,365 (24.8)     814   1,080 (24.6)
  Ave. Sales Price   $159,478   $172,923 (7.8)     $146,078   $158,288 (7.7)
  Volume   $163,624,428   $236,039,895 (30.7)     $118,907,492   $170,951,040 (30.4)
 
For the Colorado Springs Area
What Does This Mean?
 
 
We are seeing a 27% decrease in the number of sales from this time last year, however there are 5% less listings on the market which means the market is correcting.  The average sales price has decreased again by 7.2% compared to November 2007, however the median sales price is down by only 1.1%.  The statistics still show a market lull, but our local market is still beating the national average and seems to be somewhat improving. Buyers still have more choice and can be more selective.  Sellers need to make sure their homes are priced correctly and are in excellent condition to be competitive.  Homes in great condition with competative prices are still selling relatively quickly.  It's still a beauty contest and price war for Sellers.  Sellers who really need to sell are dropping their prices in line with the market.  If you need to sell now, don't wait until  next spring as there will be more inventory to compete with as well as possible continued downward pressure on prices.  Those who don't need to sell might want to wait a couple of years, unless they want to buy up and get a big discount on a move-up home.  It's also a great time to invest in real estate and expand your retirement portfolio..
 
Now is still a great time to buy with more selection and interest rates still at all time historical lows.  If you would like a list of homes available within your criteria visit www.allcoloradospringslistings.com
-or-
If you would like a CMA on your current home visit www.coloradohomesvalue.com
 
Make Room for the Holidays

The holiday season is upon us, and motivated buyers and sellers have a unique opportunity in today's market. Many home buyers have year-end moving goals, and sellers should do what they can to make their homes visitor-ready for potential buyers!  Here are a few tips to keep in mind this season:Welcome buyers:

  • Create a warm and inviting atmosphere: Tasteful seasonal decorations, scented candles, holiday potpourri, and fresh-baked cookies can heighten the experience.
  • Be flexible:  There are a million and one things to do this season, and sometimes it can be difficult to make room for showings.  By doing what you can to accommodate a buyer's schedule, you increase the odds of selling your home. 
  • Take a walk:  When your home is being shown, go for a drive or a walk. Take yourself, your family, and pets and let the agent and their clients have the freedom they need. An agent can always do their best job of showing your home when you are not underfoot.
  • Act decisively: When you do get an offer on your home, act quickly and decisively. Follow the advice of your agent and separate your emotions from your business side.

So enjoy the holidays, and remember to make a little room in your schedule to work with those motivated buyers. You'll be glad you did!

Mortgage Rates Still at All Time Lows
Finally, some good news for the mortgage industry! In a move to increase credit availability, the Federal Reserve and Federal Home Loan Banks announced on 11/25/08 that they would purchase up to $600 billion in Mortgage-Backed Securities (MBS), exciting news that sent interest rates for 30-year fixed-rate mortgages plummeting below 6.00% and near the lows for the year!  In fact, I just received the current mortgage rates for today from Coleen Leri at First Community Mortgage and for a 30 year fixed conventional loan the current PAR rate is 5.375%.

If you have been on the fence about buying or refinancing a home, now is the time to act. Interest rates are extremely low and home prices in some areas are at 2003-2004 levels. There is also an incredible selection of homes to choose from here in Colorado Springs.  Add to that recent declines in energy prices and lower consumer interest rates, and you have a great holiday recipe for success, but only if you give us a call.

Don't wait until it's too late. Call us today and get pre-approved. Rates have already been very volatile and this opportunity might not survive the holidays. In many markets, falling prices are bringing out buyers that have been waiting to buy and they are scooping up both bargains and hot properties. As the market improves interest rates will climb again.  Let me offer you some pointers to help you negotiate a great deal and lower your costs to close.

Please call me if you are ready to buy or if you have any questions about refinancing.  I can put you in touch with some great local lenders.  I hope you have a Merry Christmas and a Happy New Year.

 
 
RE/MAX Advantage, 5590 N Academy Blvd., Colorado Springs , CO, 80918

Interest Rates at an All Time Low!

by Jason Daniels

 

Mortgage Rates have Taken A Big Drop
Finally, some good news for the mortgage industry! In a move to increase credit availability, the Federal Reserve and Federal Home Loan Banks announced on 11/25/08 that they would purchase up to $600 billion in Mortgage-Backed Securities (MBS), exciting news that sent interest rates for 30-year fixed-rate mortgages plummeting below 6.00% and near the lows for the year!  In fact, I just received the current mortgage rates for today from Coleen Leri at First Community Mortgage and for a 30 year fixed conventional loan the current PAR rate is 5.375%.

If you have been on the fence about buying or refinancing a home, now is the time to act. Interest rates are extremely low and home prices in some areas are at 2003-2004 levels. There is also an incredible selection of homes to choose from here in Colorado Springs.  Add to that recent declines in energy prices and lower consumer interest rates, and you have a great holiday recipe for success, but only if you give us a call.

Don't wait until it's too late. Call us today and get pre-approved. Rates have already been very volatile and this opportunity might not survive the holidays. In many markets, falling prices are bringing out buyers that have been waiting to buy and they are scooping up both bargains and hot properties. As the market improves interest rates will climb again.  Let me offer you some pointers to help you negotiate a great deal and lower your costs to close.

Please call me if you are ready to buy or if you have any questions about refinancing.  I can put you in touch with some great local lenders.  I hope you have a Merry Christmas and a Happy New Year.

Oh, by the way…if you know of someone who would appreciate the level of service I provide, please call me with their name and business number and I will be happy to follow up and take great care of them.

See all MLS listings at www.JasonDanielsHomes.com

logo

Colorado Springs Local Market Update - November 2008

by Jason Daniels
Presented by: Jason Daniels

 

my picture logo
 
For the Colorado Springs Area
LISTING AND SALES SUMMARY
For the Colorado Springs Area
October 2008
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                       All Homes
 
 
 
                                            Existing Homes
 
MONTHLY SUMMARY
 
 
 
 
 
 
 
 
 
 
 
 
Sept 2008
Oct 2008
% +/-
Oct 2007
% +/-
 
Sept 2008
Oct 2008
% +/-
Oct 2007
% +/-
SINGLE FAMILY/PATIO HOMES:
 
 
 
 
 
 
 
 
 
 
New Listings
1,315
1,302
(1.0)
1,514
(14.0)
 
1,217
1,210
(0.6)
1,368
(11.5)
 
Sales
734
649
(11.6)
723
(10.2)
 
674
585
(13.2)
657
(11.0)
 
Ave. Sales Price
$239,385
$230,012
(3.9)
$243,160
(5.4)
 
$225,121
$216,759
(3.7)
$227,594
(4.8)
 
Median Sales Price
$200,000
$189,000
(5.5)
$205,000
(7.8)
 
$194,500
$181,500
(6.7)
$199,900
(9.2)
 
Total Active
6,030
5,841
(3.1)
6,470
(9.7)
 
5,346
5,167
(3.3)
5,632
(8.3)
 
 
 
 
 
 
 
 
 
 
 
 
 
CONDO/TOWNHOMES:
 
 
 
 
 
 
 
 
 
 
 
 
New Listings
201
166
(17.4)
167
(0.6)
 
154
146
(5.2)
148
(1.4)
 
Sales
99
83
(16.2)
105
(21.0)
 
79
69
(12.7)
86
(19.8)
 
Ave. Sale Price
$151,296
$149,204
(1.4)
$154,737
(3.6)
 
$135,397
$146,128
7.9
$144,996
0.8
 
Median Sale Price
$142,500
$132,000
(7.4)
$139,900
(5.6)
 
$134,000
$118,297
(11.7)
$128,000
(7.6)
 
Total Active
941
889
(5.5)
1,036
(14.2)
 
727
689
(5.2)
793
(13.1)
 
 
 
 
 
 
 
 
 
 
 
 
 
CUMULATIVE YTD SUMMARY
 
 
 
 
 
 
 
 
 
 
 
 
Jan-Oct 2008
 
Jan-Oct 2007
% +/-
 
 
Jan-Oct 2008
 
Jan-Oct 2007
% +/-
SINGLE FAMILY/PATIO HOMES:
 
 
 
 
 
 
 
 
 
 
New Listings
 
15,936
 
18,525
(14.0)
 
 
14,775
 
16,925
(12.7)
 
Sales
 
7,345
 
8,685
(15.4)
 
 
6,651
 
7,762
(14.3)
 
Ave. Sales Price
$241,752
 
$260,618
(7.2)
 
 
$230,071
 
$247,211
(6.9)
 
Volume
 
$1,775,668,440
 
$2,263,467,330
(21.6)
 
 
$1,530,202,221
 
$1,918,851,782
(20.3)
 
 
 
 
 
 
 
 
 
 
 
 
 
CONDO/TOWNHOMES:
 
 
 
 
 
 
 
 
 
 
 
New Listings
 
2,278
 
2,640
(13.7)
 
 
1,874
 
2,242
(16.4)
 
Sales
 
964
 
1,280
(24.7)
 
 
766
 
1,009
(24.1)
 
Ave. Sales Price
$159,790
 
$175,239
(8.8)
 
 
$146,963
 
$160,572
(8.5)
 
Volume
 
$154,037,560
 
$224,305,920
(31.3)
 
 
$112,573,658
 
$162,017,148
(30.5)
 
 
For the Colorado Springs Area
What Does This Mean?
We are seeing a 10.2% decrease in the number of sales from this time last year, however there are 9.7% less listings on the market which means the market is correcting.  The average sales price has decreased again by 5.4% compared to October 2007, however the median sales price is down by 7.8%.  The statistics still show a market lull, but our local market is still beating the national average and seems to be somewhat improving. Buyers still have more choice and can be more selective.  Sellers need to make sure their homes are priced correctly and are in excellent condition to be competitive.  Homes in great condition with competative prices are still selling relatively quickly.  It's a beauty contest and price war for Sellers.  Sellers who really need to sell are dropping their prices in line with the market.  If you need to sell now, don't wait until  next spring as there will be more inventory to compete with as well as possible continued downward pressure on prices.  Those who don't need to sell might want to wait a couple of years, unless they want to buy up and get a big discount on a move-up home.  It's also a great time to invest in real estate and expand your retirement portfolio..
 
Now is still a great time to buy with more selection and interest rates still at all time historical lows.  If you would like a list of homes available within your criteria visit www.allcoloradospringslistings.com
-or-
If you would like a CMA on your current home visit www.coloradohomesvalue.com
 

 

Is Your Home Energy Efficient?
Cooler temperatures and higher fuel costs have many people looking for better heating solutions. Heating and cooling systems are some of the most important investments you'll ever make in your home. These systems can account for 44% of your home's energy use. The more energy efficient an appliance is, the less it costs to run and the lower your utility bills. Home sellers with modern heating and cooling systems can command top dollar for these features, as buyers will factor the heat source into any offer.

 

The Biggest Bang For The Buck!

First-time buyers and bargain hunters everywhere are looking for ways to stretch their dollar. Here are three helpful tips for maximizing your purchasing power:

  1. Save money with a fixer-upper! Although these homes take a little elbow grease, the money you save can be significant. Put that extra money in your savings account, re-invest it in your home, or upgrade your location!
  2. Higher fuel costs have made remote properties less attractive for certain buyers. Don't be afraid to search a little farther out from your work if good public transportation is available.
  3. Size matters. Bigger homes are typically more expensive, so why not buck the trend and look for something a little smaller? There is generally less demand for smaller homes, and you can spot some great deals if you are willing to act fast!
 
 
RE/MAX Advantage, 5590 N Academy Blvd., Colorado Springs , CO, 80918

Market Mortgage Update-June 16, 2008

by Jason Daniels

Jason Daniels is pleased to provide current information regarding the Colorado Springs Real Estate market.  The following information is provided by Coleen Leri with First Community Mortgage.

Last Week in Review

"OPINION HAS CAUSED MORE TROUBLE ON THIS LITTLE EARTH THAN PLAGUES OR EARTHQUAKES." ~ Voltaire. Opinions certainly caused some trouble in the markets last week as several Fed members talked about inflation, the arch enemy of Bonds and home loan rates, and their comments shook the markets like a high-magnitude quake.

Last week began with Fed Chairman Ben Bernanke suggesting that the Fed is in no hurry to hike rates because of "slack" in the economy. Bonds traded lower on this news, and this may be because many economists disagree with Bernanke and believe a rate hike would actually help strengthen the US Dollar, drop oil prices closer to $100 per barrel, ease inflation pressure and...as a result, help Bonds and home loan rates improve.

Also chiming in last week was Philadelphia Fed President Charlie Plosser, who said the Fed has to take "appropriate steps to do something about" inflation. His remarks helped fan the flames of volatility for Bonds and home loan rates, adding to the sell off in Bonds and worsening of home loan rates.

There was some good economic news last week, but remember good economic news often causes money to flow from Bonds into Stocks, and when Bonds trade lower, home loan rates rise. And that's exactly what happened when April's Pending Home Sales report (which measures signed real estate contracts for existing single-family homes, condos and co-ops) and May's Retail Sales Report both came in much better than expected.

On Friday, the important read on consumer inflation via the Consumer Price Index (CPI) report delivered a mixed bag. Overall inflation is up 4.2% on a year-over-year basis, which is the highest it's been in awhile. This comes as no surprise, when taking into consideration how much the prices of fuel and food have both risen. But the Core Rate of inflation, which strips out both food and energy, increased at a much more reasonable rate of 2.3%. Since Core CPI is seen by most economists as the best measure of the underlying inflation rate, this was really good news. However, Stocks rallied after former Fed Chairman Alan Greenspan chimed in with his opinion that the worst of the credit crisis is over, and this halted any improvement for Bonds and home loan rates.

After all the reports and opinions, home loan rates ended the week at their worst levels in 4 months. I'll be watching closely this week for any more opinions that could shake up the market!

FRIED GREEN TOMATOES - YES, THEY'RE FINE...BUT BE CAREFUL IF THEY'RE RAW, RED, AND ROUND...AS A RECENT SALMONELLA SCARE IS PLAGUING THE NATION. CHECK OUT THIS WEEK'S VIEW FOR IMPORTANT TIPS AND INFORMATION ON HOW TO PROTECT YOUR FAMILY.

Forecast for the Week

There are several reports due this week that could "plague" the markets and home loan rates. Tuesday will bring the wholesale inflation measuring Producer Price Index, as well as a read on the housing market via the Housing Starts and Building Permits Report.

Also, on Thursday, the Philadelphia Fed Report hits the wires. This monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey, and Delaware is one of the most-watched manufacturing reports, and it will be important to see if concerns about inflation have had an impact.

Remember when Bond prices move higher, home loan rates move lower...and vice versa. The chart below shows how Bond prices moved sharply lower last week on inflation concerns, so stay tuned this week! If inflation continues to shake up the markets, Bond prices and home loan rates could have another troublesome week...but prices are at the same low levels they hit last year before starting to improve. Oftentimes, history repeats itself, and should Bonds receive some friendly economic news, it is likely they will gain back some of the ground recently lost.

Chart: Fannie Mae 6.0% Mortgage Bond (Friday Jun 13, 2008)
Japanese Candlestick Chart
The Mortgage Market View...

Summer Food Safety Tips

Summer-time is one of the best times of year to enjoy fresh fruits and vegetables, especially those that aren't available year-round. But recent salmonella outbreaks like those in last year's spinach crops or this year's tomato crops are an important reminder about handling food properly.

The Centers for Disease Control (CDC) notes that there is no way for consumers to detect salmonella since it can't be smelled, tasted, or seen. Here's what they recommend to reduce the risk of exposure during this latest outbreak:

Check the Type

Since April 16, more than 220 people from twenty-three states have contracted salmonella poisoning from tainted tomatoes. As a result, the Food and Drug Administration (FDA) is advising people to eat only cherry tomatoes, grape tomatoes, tomatoes sold with the vine still attached, and tomatoes grown at home since these tomatoes are not associated with the outbreak.

If you have raw red plum, Roma, or round red tomatoes, which are the tomatoes associated with the outbreak according to preliminary data compiled by the FDA, the best thing to do is either throw them away or return them to the store where you purchased them.

Wash, Wash, Wash

One of the best ways to protect yourself is to wash all produce, including organic produce, with cold running water. You should scrub your produce gently with a vegetable brush, or you can use your hands if you don't have a brush. Make sure you remove outer layers of cabbage and lettuce. And make sure you wash fruit, too, even if you don't eat the peel.

In addition, wash your hands with soap and water before handling food and also wash cutting boards, counters, and utensils to avoid cross-contamination. When you are preparing fresh vegetables, make sure you avoid any kind of contact with raw meat. And don't forget to refrigerate sliced up fruits and vegetables.

Ask Your Waiter

If you eat out, ask your waiter what the restaurant has done in response to the outbreak. Several restaurants...including chains McDonalds, Burger King, and Taco Bell, among others...have stopped serving tomatoes, but it's always wise to double check. Keep in mind that ketchup and cooked sauces are not affected since cooking tomatoes at 145 degrees kills salmonella. Don't hesitate to ask your waiter to leave tomatoes off a sandwich or salad if the restaurant hasn't removed tomatoes from its menu. Note that if you remove the tomatoes once your order comes, the food could still be contaminated.

Make the Call

Salmonella poisoning typically resembles the flu, and symptoms usually appear 12 to 72 hours after infection and include abdominal cramps, headache, fever, diarrhea, nausea, and vomiting. If you suspect that you've contracted a case of salmonella poisoning, call your local health department. Reported cases help the CDC and FDA track the source of salmonella.

For the latest information on the tomato salmonella outbreak, visit:
FDA: Link to FDA Information
CDC: Link to CDC Information

The Week's Economic Indicator Calendar
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 June 16 – June 20

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. June 16
08:30
Empire State Index
Jun
-2.4
 
-3.2
Moderate
Tue. June 17
09:15
Industrial Production
May
0.1%
 
-0.7%
Moderate
Tue. June 17
09:15
Capacity Utilization
May
79.7%
 
79.7%
Moderate
Tue. June 17
08:30
Producer Price Index (PPI)
May
1.0%
 
0.2%
Moderate
Tue. June 17
08:30
Core Producer Price Index (PPI)
May
0.2%
 
0.4%
Moderate
Tue. June 17
08:30
Housing Starts
May
980K
 
1032K
Moderate
Tue. June 17
08:30
Building Permits
May
950K
 
978K
Moderate
Wed. June 18
10:30
Crude Inventories
6/14
NA
 
-4560K
Moderate
Thu. June 19
08:30
Jobless Claims (Initial)
6/14
NA
 
384K
Moderate
Thu. June 19
10:00
Index of Leading Econ Ind (LEI)
May
0.0%
 
0.1%
Low
Thu. June 19
10:00
Philadelphia Fed Index
Jun
-12.0
 
-15.6
HIGH

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. 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, there is no guarantee it is not without errors.

 

For all of your Colorado Springs Real Estate needs contact Jason Daniels at jasondaniels@remax.netwww.jasondanielshomes.com

Mortgage Market Update-June 9, 2008

by Jason Daniels

Jason Daniels is pleased to provide current information regarding the Colorado Springs Real Estate market.  The following information is provided by Coleen Leri with First Community Mortgage.

"THERE IS NO BARRIER TOO HIGH, NO VALLEY TOO DEEP... NO DREAM TOO EXTREME, NO CHALLENGE TOO GREAT" ~ Charles Swindoll And that motivating phrase was a great motto for last week, as both Bonds and home loan rates ended up being greatly challenged as they dreamed of breaking through technical barriers to attempt some improvement. Lots of intra-week action ensued - but when the dust settled, Bonds and home loan rates rallied in the face of challenges and ended the week very close to where they began.

Bond prices and home loan rates started the week to the upside, as Wachovia announced they were removing their CEO and Stocks faced some selling pressure on the news, moving money into Bonds and helping rates improve. But the rally was very short lived, as Wednesday's "unofficial" Employment Report by giant payroll processor ADP indicated 40,000 new private sector jobs were added in May...and while this good economic news gave Stocks a boost, it pulled money right back out of Bonds and caused home loan rates to worsen. Thursday's positive economic news that unemployment claims for the week were lower than expected caused Bonds and home loan rates to worsen even further, as traders began to speculate on what the "official" Jobs Report by the Department of Labor would contain.

And on Friday morning, along came the big enchilada, the monthly Jobs Report. The Unemployment Rate increased to 5.50%, up from 5% last month - the largest jump since February of 1986. This was much worse than the market expected. And remembering that bad economic news tends to be bad news for the Stock market, but good news in turn for the Bond market, the news was positive indeed for Bonds and home loan rates - helping them to end the week relatively unchanged.

STOCKS AND BONDS AREN'T THE ONLY THINGS ON THE MOVE THIS TIME OF YEAR. NOW THAT WE'RE INTO THE SUMMER SELLING SEASON, YOU OR SOMEONE YOU KNOW MAY BE ABOUT TO BUST A MOVE. CHANGE OF RESIDENCE IS EXCITING, BUT IT CAN ALSO BE A LOT OF WORK. READ THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME TIPS ON HOW TO TAKE THE STRESS OUT OF MOVING!

Forecast for the Week

So we know that employment numbers were the big movers and shakers for the financial markets and home loan rates last week. What's in store for the week ahead, and what could drive more market action?

Keep your eye out for the Retail Sales Report, which will be released on Thursday. The Retail Sales report is a measure of the total receipts of retail stores, and changes in these numbers are closely followed as a timely indicator of broad consumer spending patterns. Recent numbers haven't been too bad - consumers seem to still keep spending away. But, will this week's report show that inflation and high oil prices are finally taking their toll on consumer pocketbooks? A strong Retail Sales Report would be good for the Stock market - which stands to reason, as it would indicate continued consumer confidence and dollars being poured into the economy. But a strong Retail Sales Report would be bad news for Bonds and home loan rates, which benefit from weak economic news.

Sure to be a market mover is Friday's Consumer Price Index report, which gives a read on inflation at the consumer level - that is, how much more expensive are goods and services this month over last month? CPI is a widely watched inflation indicator, and will definitely make headlines. Inflation tends to be bad news for both Stocks and Bonds, so if the report indicates inflation is heating up, this could cause Bond pricing and home loan rates to worsen in response.

Remember when Bond prices move higher, home loan rates move lower...and vice versa. And as you can see in the chart below, Bonds were challenged to improve and break above a strong technical barrier at the 200-day Moving Average....only to end the week being forced below it once again. This is a very important "line in the sand," so I'll be watching closely this coming week - as always - to see if the news of the week will help Bonds break above this important barrier, or remain below it.

Chart: Fannie Mae 5.5% Mortgage Bond (Friday Jun 06, 2008)
Japanese Candlestick Chart
The Mortgage Market View...

Moving can be very exciting...but it can also be a bit of a pain as well. Besides packing and unpacking, there is a long list of details to be handled. Things like choosing a mover, connecting utilities, getting Internet and cable service, or subscribing to newspapers or magazines in a new area can be quite a chore. And if you forget to connect one of the utilities you could be stuck in your new home for several days without that much needed service. To ease the stress of moving and schedule new connections for all of the utilities in one convenient location, simply logon to www.whitefence.com.

You can quickly compare prices for movers, phone, electricity, television, or high-speed Internet. Just select the service you wish to compare--for example, phone, cable, and electric. Or, enter your address on the home page, hit search, and within seconds a list of services and prices available in that area will appear. Next, click on the service of your choice to view details and pricing or comparison shop by choosing three providers. Once you determine the provider, select the service plan, complete the requested information, enter the connection date, and within minutes a confirmation will be sent to you.

If you want to change your current provider, simply hit the icon for phone, cable, or internet, select "switch provider", complete the requested information and a list of providers in the local area will appear. Choose the new provider and the service will be changed.

Additionally, on the site you can complete a change of address form, subscribe to local newspapers, and order magazine subscriptions. Moving to a new home should be enjoyable and exciting. Using this tool can help remove a bit of the stress of moving and will also help save valuable time.

The Week's Economic Indicator Calendar
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 June 09 – June 13

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. June 10
08:30
Balance of Trade
Apr
-$59.5B
 
-$58.2B
Moderate
Wed. June 11
10:30
Crude Inventories
6/07
NA
 
-4802K
Moderate
Wed. June 11
02:00
Beige Book
 
 
 
 
Moderate
Thu. June 12
08:30
Jobless Claims (Initial)
6/07
371K
 
357K
Moderate
Thu. June 12
08:30
Retail Sales
May
0.6%
 
-0.2%
HIGH
Thu. June 12
08:30
Retail Sales ex-auto
May
0.7%
 
0.5%
HIGH
Fri. June 13
08:30
Core Consumer Price Index (CPI)
May
0.2%
 
0.1%
HIGH
Fri. June 13
08:00
Consumer Price Index (CPI)
May
0.5%
 
0.2%
HIGH
Fri. June 13
08:30
Consumer Sentiment Index (UoM)
Jun
57.5
 
59.8
Moderate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. 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, 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.

 

For all of your Colorado Springs Real Estate needs contact Jason Daniels at jasondaniels@remax.netwww.jasondanielshomes.com

Mortgage Market Update - May 2007

by Jason Daniels

TALK DERBY TO ME...If you did tune in to watch the biggest horse race of the year, you know that "Street Sense" was the lucky horse who won the "Run for the Roses", the Kentucky Derby. And the news from Wall Street was also galloping in fast and furious last week - so let's make some horse sense out of the major headlines that helped Bonds and home loan rates end up slightly improved for the week overall.

First, the Fed's favorite gauge of consumer inflation, Core Personal Consumption Expenditure Index (PCE), showed a year over year reading of 2.1%, which is very close to the Fed's target zone of 1 - 2%. With inflation moderating, the Fed might start thinking about making a cut to the Fed Funds Rate in the 2nd half of 2007. This tame read on inflation was very good news for Bonds, as the value on their fixed returns get eroded by the impact of inflation.

Then, the Jobs Report arrived, with new jobs created in April being reported at 88,000, below what most analysts expected. Additionally, revisions took 26,000 jobs away from previous months reports, the Unemployment Rate rose slightly to 4.5%, and Average Hourly Earnings were reported slightly lower than expected at 0.2%. Overall, the Job Report suggests the strong labor market is softening a touch and wage based inflation pressure is moderating - more good news for Bonds and home loan rates. Wage-based inflation comes into play when the job market is tight and therefore employers are forced to pay their employees more. This naturally results in more dollars being injected into the economy for spending - as well as the cost of doing business moving higher for employers - all of which can cause prices on goods and services to rise.

DON'T MISS THIS WEEK'S MORTGAGE MARKET VIEW, WITH TIPS ON SAVING MONEY ON HOMEOWNERS INSURANCE...QUICK, SIMPLE HITS THAT ARE "SO EASY, A CAVEMAN CAN DO IT."

Forecast for the Week

Benny and the Fed will take center stage this week, as they release their Interest Rate Decision and Policy Statement on Wednesday afternoon. It is highly unlikely that the Fed will make a change to the Fed Funds Rate at the meeting, but it will be especially interesting to hear the tone of the Policy Statement in light of softer Employment Report and moderating inflation.

Speaking of inflation, Fed Chairman Ben Bernanke has to be smiling, as the latest data suggests the Fed is doing a great job in handling the economy. Recent reports have shown moderate, stable economic growth and inflation pressures easing.

The chart below shows that Bonds and home loan rates may be making a move soon. The ceiling and the floor of the current technical range are putting pressure on Bonds, squeezing prices from both above and below...so they'll have to make a breakout soon. And the tone of the Fed's Policy Statement on Wednesday might just be the catalyst for a move. If it suggests that inflation is controlled, Bonds and home loan rates will like this news, and see some improvement - but if the Fed still sounds overly concerned about inflation, Bond prices and home loan rates will worsen.

Chart: Fannie Mae 5.5% Mortgage Bond (Friday May 04, 2007)
Japanese Candlestick Chart
The Mortgage Market View...

What do these slogans remind you of? "You're in good hands with..." "Like a good neighbor..." "Own a piece of the rock."

That's right, insurance. And premiums are costing us more and more every year. But there may be some savvy steps you can take to trim the bill and still have your valuables in good hands.

Items that push premiums higher include a pool with a slide or diving board, having a trampoline, or even a dog that has a record of biting others. These factors could be part of higher premium costs, so contact your insurance agent and see if changes can reduce your premium payments.

There are also interior items that can impact the cost of insurance. The coziness of the wood-burning stove may be appealing to the homeowner, but to the insurance agent it could look like a fire hazard, and result in a higher premium.

If you have not done so already, investing in a good alarm system may enable you to shave some of the cost of insurance, while giving you some added protection. And be sure to ask your insurance agent about combining auto and home policies, this could help trim the overall cost of your insurance bill too.

Often times, once the insurance policy is purchased it sits in a drawer until the need arises to file a claim. But taking the time to review your personal insurance policy, just once a year, provides the opportunity to lower the overall annual premium and make sure your valuables are adequately protected. It is also the perfect time to make any additions for personal possessions that may have been purchased or acquired during the year, like art, home furnishings, and jewelry. Additionally, if the home has been remodeled discuss the upgrades that have been made with your insurance agent to insure that all upgrades are covered in the policy. And most importantly, if you need a recommendation to a great insurance agent - just give me a call!

The Week's Economic Indicator Calendar

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 May 07 – May 11

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Wed. May 09
10:30
Crude Inventories
5/04
NA
 
1169K
Moderate
Thu. May 10
08:30
Jobless Claims (Initial)
5/05
325K
 
305K
Moderate
Thu. May 10
08:30
Balance of Trade
Mar
-$60.0B
 
-$58.4B
Moderate
Fri. May 11
08:30
Core Producer Price Index (PPI)
Apr
0.2%
 
0.0%
Moderate
Fri. May 11
08:30
Producer Price Index (PPI)
Apr
0.5%
 
1.0%
Moderate
Fri. May 11
08:30
Retail Sales
Apr
0.4%
 
0.7%
HIGH
Fri. May 11
08:30
Retail Sales ex-auto
Apr
0.5%
 
0.8%
HIGH

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. 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, 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.

 

www.jasondanielshomes.com

Mortgage Market Update - March 2007

by Jason Daniels

"TELEVISION IS NOT REAL LIFE. IN REAL LIFE, PEOPLE ACTUALLY HAVE TO LEAVE THE COFFEE SHOP, AND GO TO JOBS." Bill Gates Right on Bill...and last Friday, the Department of Labor reported that another 180,000 Americans left the coffee shops and found jobs during the month of March, with another 32,000 jobs added to prior month's reports. The Unemployment Rate dropped to 4.4%, matching the lowest rate in six years - and Average Hourly Earnings were up as well, rising to $17.22 per hour. So it was all good news for the US job market...but bad news for home loan rates, since a strong labor market can lead to inflation, the arch-enemy of Bonds and home loan rates. On the release, Bond prices slipped lower, causing home loan rates to rise slightly across the board.

And the Fed was watching too...remember that the pop in new job formations and stronger wages creates that risk of further inflation ahead, and this news comes on the heels of a higher read on inflation from the Fed's most closely watched indicator - The Personal Consumption Expenditure Index. So, despite the media and many "so called" experts saying the Fed has to cut rates soon - don't expect a cut in the near future, as the Fed's main priority is controlling inflation.

WANT TO REDUCE THE INTEREST YOU PAY ON CREDIT CARDS? YOU'RE NOT ALONE...SO DON'T MISS READING THIS WEEK'S MORTGAGE MARKET VIEW, TO GET SMART ON THE TRICKS THAT CREDIT CARD COMPANIES USE TO CHANGE THE RULES AND COST YOU MORE, IN WAYS THAT YOU MIGHT NOT EXPECT.

Forecast for the Week

What's on the docket this week? A few reports of note - and one of the more interesting items on the calendar will be the Federal Reserve Board's "Meeting Minutes" from the March 21st meeting, due for release this Wednesday afternoon. Why so intriguing? Because unlike the carefully crafted Policy Statement released just following the actual Fed Meeting, the Meeting Minutes is like the Fed "unplugged"...where all the commentary and discussion between Fed members is unbridled and unleashed to the public. Not all members vote at each meeting - but they all have a voice. Was the decision to keep the Fed Funds Rate in a paused position unanimous? Or did non-voting Fed President Jeffrey "the Dissenter" Lacker raise his voice in favor of more hikes? We'll all find out later this week - and the comments could be market movers, so stay tuned.

The chart below shows that Bond pricing has been skidding lower of late, meaning home loan rates have worsened right along with them. And the next "floor of support" to catch them is lower still - indicating that Bond pricing and home loan rates will likely get a bit worse before they get better.

The market may see some added volatility early in the week, as last Friday's trading session was condensed into just a few hours of trading before a market close in observance of Good Friday. Stocks should improve off the strong Jobs Report, which could hurt bonds and home loan rates.

Chart: Fannie Mae 5.5% Mortgage Bond (Friday Apr 06, 2007)
Japanese Candlestick Chart
The Mortgage Market View...

IT'S IN THE "FINE PRINT"...

Credit card companies do a great job at disclosing all of their terms and conditions...but do so in an exceptionally hard to read font and verbiage, designed to dissuade you from really reading the infamous "fine print". But failing to understand the terms can be costly.

Most people know that when your bill arrives, it needs to be paid on time or you'll be hit with a hefty late fee - but many don't know that paying late usually entitles the credit card company to raise your rate immediately and significantly. And worse yet - did you know that paying late on one of your credit cards also entitles all your other credit card companies to raise the rates you are paying them as well? You bet - it's called the "Universal Default Clause", and it basically means that if you are late on one credit card account, all other credit card companies that you have accounts with can increase the interest rate too, even if their accounts have been paid completely on time.

But the plot thickens further - this goes beyond late payments on credit cards alone.

If one of your credit card companies has the Universal Default Clause noted in their disclosure - and most of them do - this clause states that they have the right to penalize a consumer with an increased interest rate if a late payment is reported to ANY other creditor, including utilities, car loans, and home loans. Better believe that credit card companies with this clause sit back and wait for the opportunity to increase the interest rate...and continually monitor their customer's credit reports, just waiting for the opportunity to do so.

And just when you thought it couldn't get any worse...

...it's not just late payments that trigger the Universal Default Clause; interest rates can be increased if a consumer exceeds a credit limit, bounces a check, or applies for additional credit. All of these signs may be read by the credit card company that a consumer is "high risk". The penalty? You guessed it - a higher interest rate.

Further, if an offer seems too good to be true, it probably is. This popular phrase rings true for many consumers that sign up for zero percent interest offers. Although these offers sound great and every consumer goes in with the best intentions of paying the balance in full before the zero percent interest term expires, the vast majority of people do not pay off the bill before the offer ends. And what consumers do not realize is if the account is not paid in full, the creditor does not start charging interest from the date the deal expires, the creditor goes back to the day the purchase was made and charges interest on the balance for the entire period.

Or - back to the Universal Default Clause, if you are late on another credit card payment during the introductory time period with the zero percent rate offer - the card issuer of that sweet deal could prematurely break it off and force a steamed up interest rate, retroactively charged back to the original date of purchase. That smoldering rate could mean paying double or even triple for the purchased merchandise.

Try your best to only charge what you can afford to pay off in full, on a monthly basis. Beyond being just good advice, here's another little known credit card fact that could cost you.

If you charge and then pay the account in full, there is no interest due. But if you charge and choose to only pay half of the bill when it arrives, guess what - you get charged interest not just on the remaining balance, but for the entire charged balance, regardless of your paying half the bill in full. If the bill is not paid in full the following month, this game continues until the account is paid in full.

So although the fine print can be a real snoozer to read, taking the time to become familiar with credit card terms and conditions can save you some serious dollars. Review your current credit card terms and conditions and take the time to find a credit card company that truly matches your spending habits and needs. You will save yourself a few sleepless nights - and more importantly, save yourself a lot of money too!

The Week's Economic Indicator Calendar

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 April 09 – April 13

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Wed. April 11
10:30
Crude Inventories
4/06
NA
 
4307K
Moderate
Wed. April 11
02:00
FOMC Minutes
Mar
 
 
 
HIGH
Thu. April 12
08:30
Jobless Claims (Initial)
4/07
NA
 
NA
Moderate
Fri. April 13
08:30
Core Producer Price Index (PPI)
Mar
0.2%
 
0.4%
Moderate
Fri. April 13
08:30
Producer Price Index (PPI)
Mar
0.6%
 
1.3%
Moderate
Fri. April 13
08:30
Balance of Trade
Feb
-$60.5B
 
-$59.18B
Moderate
Fri. April 13
10:00
Consumer Sentiment Index (UoM)
Apr
88.0
 
88.4
Moderate

www.jasondanielshomes.com

Mortgage Market Update

by Jason Daniels

"I'M MELTING! MELTING! OH, WHAT A WORLD, WHAT A WORLD..." Wicked Witch, Wizard of Oz 1939 And last week, you couldn't watch the financial news for longer than a few minutes without hearing about the "subprime meltdown", talking about a certain type of home loan experiencing heavy rates of default and foreclosure, and what the potential consequences might be on the US economy. Although subprime lending only represents a very small portion of home loans overall, the doom-and-gloom-loving media was loving it, busy forecasting a financial disaster for the economy. While this is a bit overblown, there certainly will be some ramifications, so be sure to read this week's Mortgage Market View below, to know what you should expect, and what you can do now. Overall, the news and hype did worry investors, and both Stocks and Bonds experienced an increase in volatility...but home loan rates ended up very close to where they started for the week.

In other news, Retail Sales came in a bit weaker than anticipated last week - but with a freezing cold February across most of the US, it wasn't exactly the best month to go hit the malls. The Producer Price Index (which measures wholesale inflation) and the Consumer Price Index (which measures retail inflation) both came in a bit hotter than had been expected, indicating that inflation has been stubbornly persistent in the economy. What must the Fed think of all this - and what will they do at their upcoming meeting? Read on...

DON'T MISS THIS WEEK'S MORTGAGE MARKET VIEW, TO LEARN HOW THE ISSUES IN THE SUBPRIME HOME LOAN ARENA MAY IMPACT YOU, WHAT THE FACTS ARE...AND WHAT YOU CAN DO RIGHT NOW.

Forecast for the Week

The week ahead holds a few real headliner news items, including a new round of housing data to sift through, including Housing Starts and Building Permits on Tuesday, and Existing Home Sales next Friday. But the financial highlight of the week will be the Fed Meeting and resulting Policy Statement. There has been rumors of a Fed Funds Rate cut to help the housing market or to smooth out the subprime home loan problem...but don't believe it. The Fed's main charge is to control inflation, period. And they will only consider cutting rates if the core rate of inflation, as measured by the Personal Consumption Expenditure (PCE) Index, falls below 2% for a few consecutive months. The latest Core PCE was 2.3%, so don't look for Home Equity Lines of Credit or other adjustable home loan rates that are tied to the Fed's movements to be dropping anytime soon.

The chart below shows how Bond Prices have been on a nice upward trend for the past six weeks, meaning that home loan rates have been trending lower. But on Friday, Bonds stepped right off that friendly upward sloping trend line, which could mean that Bond prices and home loan rates will worsen over the next few days, at least until some news comes along to drive the action decisively one way or the other. And this will likely be dependent on the flavor of the Fed statement coming up this Wednesday, due to be released at 2:00pm ET.

Chart: Fannie Mae 5.5% Mortgage Bond (Friday Mar 16, 2007)
Japanese Candlestick Chart
The Mortgage Market View...

The headlines are once again full of news from the mortgage and real estate front...and this time, the "subprime meltdown" is taking center stage. What exactly is going on, and what does it mean to you?

A "subprime" home loan is a loan where the client has some significant credit issues, or was otherwise unable to qualify for a standard, conventional loan. Due to the fact that these loans tend to be quite risky for the lender...they also bear higher interest rates to match, as well as often being adjustable rates that likely have recently hiked sky high, not to mention the steep prepayment penalties they generally carry.

These loans have been around for years - so why all the drama now?

Many subprime and other adjustable home loan rates have moved dramatically higher, due in part to the Federal Reserve Boards recent rate hike cycle. So as these rates are adjusting higher - and the payment right along with it - the homeowners are finding that they are unable to keep up with the dramatic increase in payment.

In the past, homeowners in this situation would simply throw the house on the market, realize enough of a profit to cover any prepayment penalties, and literally move on. But the soft real estate market isn't making this quite so easy any more - houses are not selling as quickly, and the home appreciation rates enjoyed in the past have moderated.

So the subprime homeowner is stuck - and many of these homes are falling into foreclosure, causing even more problems. As more and more loans are defaulting, mortgage lenders are forced to tighten up their lending standards across the board in response...making it tougher for a troubled homeowner to even refinance to get out of trouble. Many subprime lenders are feeling the pain, and in some cases, actually being forced to close their doors as they are hit with all the defaulted loans and foreclosed properties coming back home to roost.

How does this impact you?

In the short term, home loan rates are benefiting, as the stock market is taking a beating, causing money to flow into Bonds and Mortgage Backed Securities, which benefits home loan rates. But the longer term picture may spell higher interest rates ahead, as lenders have to absorb the cost of the loans that went belly-up, combined with the cost of increased compliance and accountability standards.

Now in many cases, the advice and loan strategy given to the client was perfectly appropriate for the client at the time they took out the loan...but the "perfect storm" of colliding economic events may have just worked against them. Yet unfortunately, many homeowners are paying a very steep price for what may have been poor advice and counsel given them at the time of their home purchase or refi. Now more than ever before, it is clear that it pays to work with a true professional, especially when your home is on the line. If you've ever thought it's too expensive to work with a real professional...just wait until you work with an amateur. The price paid is clear - and in this case, it's a very painful one.

Because of these events, credit and lending standards are tightening across the board, so it's a great time to get a "financial check up" - both you personally, as well as your clients, friends, family members and coworkers - even if they are not immediately in need of any home loan financing.

You know that I want to build relationships for the long run, not just to provide a "transaction" - so although you may not have a need for my home loan services at this time, I'd like to invite you to contact me for a review of your current credit and financial situation. There may be recommendations I can make now, that will ensure you are in the best possible shape to obtain the most favorable financing terms when the need does arise.

Feel free to forward this newsletter directly, or print out copies for your clients, friends and coworkers who are asking about the headlines. As always, simply give me a call or email - I am always glad to hear from you, and happy to answer any questions regarding this matter or any other way I can be of service to you.

The Week's Economic Indicator Calendar

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 March 19 – March 23

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. March 20
08:30
Housing Starts
Feb
1440K
 
1408K
Moderate
Tue. March 20
08:30
Building Permits
Feb
1560K
 
1571K
Moderate
Wed. March 21
10:30
Crude Inventories
3/16
NA
 
1180K
Moderate
Wed. March 21
02:15
FOMC Meeting
 
 
 
 
HIGH
Thu. March 22
08:30
Jobless Claims (Initial)
3/17
325K
 
318K
Moderate
Thu. March 22
10:00
Index of Leading Econ Ind (LEI)
Feb
-0.3%
 
0.1%
Low
Fri. March 23
10:00
Existing Home Sales
Feb
6.35M
 
6.46M
Moderate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. 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, there is no guarantee it is not without errors.

www.jasondanielshomes.com

Mortgage Market Update

by Jason Daniels
Last Week in Review

YOU KNOW WHO IS LOOKING FOR STOCKS? NOBODY! Last week's volatility in the stock market stabbed at the hearts of both the Stock and Bond markets, with home loan rates swinging higher and lower throughout the course of the week. Economic news releases took a backseat to the massive movements in Stocks. Amazingly, when all the smoke cleared, home loan rates were unchanged to slightly improved for the week overall.

What happened? First, remember that the Stock and Bond markets compete for the same investment dollar. This means that when Stocks are worsening and investors are selling off their holdings, some of that money gets moved over into the Bond market, which helps home loan rates improve. And vice versa, when Stocks move higher and investors are buying into the Stock market, some of that money comes back out of Bonds, which causes home loan rates to worsen.

Last week's volatility began with the Chinese Stock market plunging, setting off a string of worldwide stock selling. Our own Stock market was ripe for a reversal lower, and money flowed out of Stocks and into Bonds, helping home loan rates improve. The next day, Stocks began to rebound, moving money back out of Bonds and causing home loan rates to worsen. But the "see-saw" action continued for the balance of the week - and may not be done yet, causing high amounts of volatility in Stocks and Bonds - and therefore, home loan rates.

AND ALTHOUGH WEARY INVESTORS MAY NOT BE LOOKING FOR STOCKS...MAYBE THEY ARE LOOKING FOR A NICE NEW CAR THIS SPRING. IF YOU'RE IN THE MARKET FOR A NEW VEHICLE, DON'T MISS THIS WEEK'S MORTGAGE MARKET VIEW.

Forecast for the Week

So what's the story with the Stock market? The increase in volatility, and even the recent decline, is actually perfectly normal. The steady seven month climb we have seen in Stocks was unusual, and the current 1000-day streak without a 10% decline is the second longest in history. So looking ahead, it would not be a surprise to see Stocks find their way even lower over the near term, before regrouping and making another run at new highs. The fact that outflows from Stocks are being "parked" into Bonds is a long term plus for Stocks, due to the temporary nature of this trade. This also tells us that Bonds and home loan rates will be a short term beneficiary, but will be adversely affected once Stocks start to rebound.

This week holds only one potentially major market-moving economic release, the February Jobs Report. Initial estimates are calling for the creation of 100,000 new non-farm jobs, down from January's report of 111,000 new jobs. The chart below shows some mixed signals for Bonds, with a nice "rising pennant" formation - typically good news for Bond prices and home loan rates; but also shows that Bonds are "overbought" and ripe for a reversal lower. For now, the technicals will take a backseat at least until Friday, as Stocks seem to be driving all the action for Bonds and home loan rates.

Chart: Fannie Mae 5.5% Mortgage Bond (Friday Mar 02, 2007)
Japanese Candlestick Chart

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Jason Daniels & Associates
Jason Daniels & Associates at RE/MAX Millennium
9362 Grand Cordera Pkwy Suite 100
Colorado Springs CO 80924
(719) 966-1500
(888) 351-1099