*Fees and Points are the total charged by the lender at settlement. One point equals one percent of the loan amount. Primary Mortgage Market Survey® data provided by Freddie Mac

Frank Nothaft, Freddie Mac vice president and chief economist in his weekly commentary spoke of this weeks  record lows manifesting in a period where the economy is struggling  to gain momentum and to boot  inflation remains very low. Nothaft then quoted some economic stats, 

1. Growth estimates for first quarter GDP were revised down by a half percentage point over the past two months to 2.7 percent.( Bureau of Economic Analysis)
2.  Annual inflation, as measured by the 12-month change in the core CPI, held at 0.9 percent in April and May, which is the slowest pace in over 44 years( Bureau of Labor Statistics )

Nothaft then rounded up by mentioning current home prices,

• House prices are improving due in part to the homebuyer tax credit. The S&P/Case-Shiller® 20-city home price index grew 0.4 percent between March and April and was up 3.9 percent from April 2009(the largest annual gain since October 2006)
•  17 of the metropolitan areas experienced monthly gains in April, compared to 10 in March and six in February.

US Weekly Currency Interbank Exchange Rates 02/07/ 2009

The  summary from our currency expert Charles Purdy on how the US dollar fared this week...

In the USA, , pending home sales dropped by 30% in May, following an expiry of tax credits for property buyers and the ISM manufacturing index fell from 59.7 to 56.2 – the biggest fall in activity since December 2009.

The main event of Friday was the US Non-Farm payroll data. Most experts were expecting a fall of over 100,000 jobs on the month and the actual figure came in slightly worse at 125,000.

The problem that the US needs to face head on, is the nations  huge debts. However there seems to be a lack of a plan to do this. Unlike the Europeans the only thought seems to be to throw more money at the economy in an attempt to keep it moving forward.

Comment (0)

This Week Sees Mixed Economic Reports...

 The Florida  30 year fixed rate mortgage(FRM)  is sitting at 5.02, with an average 0.8 points, according to results released by Freddie Mac, for the   week ending Feb 25, 2010. The national rate for the US is  sitting  at 5.05 .This week sees the end of rates below 5 percent that were around for the past few weeks.

 *Fees and Points are the total charged by the lender at settlement. One point equals one percent of the loan amount. Primary Mortgage Market Survey® data provided by Freddie Mac

Frank Nothaft, Freddie Mac vice president and chief economist in the release from Freddie Mac this week stated that long term fixed rate mortgages had followed bond yields higher. He also stated that the current economic data is somewhat conflicting. 

He highlighted data from Conference Board showed  that the January producer price index was way above the market consensus, yet the consumer price index continues to be suppressed. Lastly and most importantly  he spoke of consumer confidence, shockingly this is at the lowest level since April 2009 (Conference Board)

Nothaft then went on to mention that conflicting reports exist as to the state of the current housing market too!

• The S&P/Case-Shiller® national home price index rose for the third consecutive quarter in the fourth quarter
•  The 20-city composite index showed an increase in December 2009 for the seventh month in a row; six metropolitan areas experienced positive year-over-year growth, compared to four in November.
• New home sales,  unexpectedly slowed in January to the smallest rate since records began in 1963
• The supply of homes at the present sales rate rose to 9.1 months, this is the most since May 2009.

Comment (0)

Affordability Is Within Reach!

The  weekly Primary Mortgage Market Survey®   for the week ending September 24th, 2009 from Freddie Mac shows  the Florida 30-year fixed-rate mortgage rate is 5.01 with an average 0.7 points. 

Frank Nothaft, Freddie Mac vice president and chief economist says,

 “Mortgage rates held relatively steady at three-month lows this week.  Correspondingly, the Mortgage Bankers Association reported that mortgage applications jumped 12.8 percent over the week of September 18th to the strongest pace since late May, boosted by refinancing activity.

In its September 23rd policy statement, the Federal Reserve (Fed) indicated that it plans to keep its benchmark interest rate exceptionally low for an extended period. This will likely benefit consumers who opt for ARMs, because they are typically tied to shorter-term interest rates. The Fed also noted that activity in the economy and housing market has picked up and financial markets have improved.”

The US$ has gained against sterling which isn’t a big  surprise given that sterling is the weakest currency over the last year losing 15% on a trade waited basis. However it has been suffering against the euro, although it did pull back from one year lows, and other currencies given its dual deficits of budget and balance of payments.

The Federal Reserve met this week and on the whole its announcement was positive on the economy with signs of improvement but cautious on the speed of the recovery given the surplus capacity that existed. So US interest rates will be kept at current levels for some time to come. The US has committed to better fiscal management given that for the US$ to maintain the status of the world’s reserve currency then it will have to prove to the world that it has some value. 

Comment (0)

 Mortgage Rates Remain Historically Low!

Freddie Mac's  weekly Primary Mortgage Market Survey®  has been released  for the week ending September 10th, 2009.  The Florida 30-year fixed-rate  mortgage rate is 5.05 with an average 0.7 points.

Frank Nothaft, Freddie Mac vice president and chief economist says,

"Mortgage applications leapt 17 percent over the week ending September 4, led by a 23 percent jump in refinancing demand, according the Mortgage Bankers Association. In fact, nearly three out of five applications were for refinancing current loans.

While the economy lost 216,000 jobs during August, it was the smallest monthly job loss since August 2008. This and the Federal Reserve’s latest “Beige Book” suggest that the economy may be on the road to recovery. Based on information up through late August, most Federal Reserve Bank districts noted that their business contacts remained cautiously positive that economic activity was stabilizing in July and August. Two out of the 12 districts also indicated that local house prices were firming.”

The US$ had a rotten week losing ground against most currencies including sterling and faced a 12 month low against a basket of major currencies. Many  reasons have been cited,

• The gold price passing through US$1,000
• Talk about finding an alternative to the US$ as the worlds reserve currency
• The rise in stock markets leading to increased risk appetite and the search by investors for higher yielding assets.

Comment (0)