September 2013 - Ence Homes

Primelending’s Newsletter for Sept 30th

September 30, 2013/0 Comments/in Recent News /by Ence Homes

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Geralann Tabet
Production Manager
619 S. Bluff St. Tower 1, Ste 2012
St. George, UT 84770
Direct: 435.215.7342
Fax: 877.371.4777
Cell: 435.619.2452

For the week of September 30th, 2013 – Vol. 11, Issue 39

>> Market Update

QUOTE OF THE WEEK… “What is harder than rock, or softer than water? Yet soft water hollows out hard rock. Persevere.” —Ovid, Roman poet

INFO THAT HITS US WHERE WE LIVE… The Latin bard offers good advice in the wake of last Thursday’s Pending Home Sales, down 1.6% for August. Observers said rising interest rates were partially to blame for the dip in this measure of contracts signed but not yet closed on existing homes. But national average mortgage rates have dropped the last two weeks with the Fed’s announcement it would continue buying mortgage bonds, which should boost bond prices and keep rates low. Also helping us persevere is the fact Pending Home Sales are still up 5.8% for the year.

Further encouragement came from single-family New Home Sales, up 7.9% in August and 12.6% year-over-year. They’re now at a 421,000 annual rate, not where they need to be, but rebounding strongly. There were also signs of continued success for home prices. The S&P/Case-Shiller 20-city home price index was up 0.62% in July, its 18th consecutive monthly gain, with all 20 metros ahead. Its 12.39% annual gain was its biggest since early 2006. The FHFA price index of homes financed with conforming loans was up 1% in July, also gaining 18 months in a row, and up 8.8% annually.

BUSINESS TIP OF THE WEEK… Understand your customers. When you know their wants and needs top to bottom, you can focus on giving them exactly what they want in a way no one else can.

>> Review of Last Week

WATCHING THE BUDGET… All week, the budget battle in Washington loomed large over Wall Street. The lack of progress, with the deadline for an agreement just days away, kept investors cautious, sending the Dow and the S&P 500 indexes down for the first time in four weeks, although the tech-heavy Nasdaq showed a miniscule gain. The Senate did pass a bill to avoid government shutdown, but as of Friday, it still needed House approval. The U.S. will also hit its borrowing limit on October 17 unless the debt ceiling is raised. With all this going on, economic data held little sway.

That data, as usual, was mixed. Durable Goods Orders were up 0.1% for August, following their drop in July. New Home Sales were up in August but Pending Home Sales were off. The Commerce Department left Q2 GDP, Third Estimate, unchanged, at an underwhelming 2.5% annual growth rate. The Fed’s favorite inflation measure, the Core PCE Price index, was up 0.2% in August and well within the Fed’s target range, up just 1.2% for the year. But Michigan Consumer Sentiment for September fell to its lowest final reading in five months.

The week ended with the Dow down 1.2%, to 15258; the S&P 500 down 1.1%, to 1692; but the Nasdaq was up 0.2%, to 3782.

The ongoing Washington budget wrangling drove many investors to the safe haven of bonds and prices continued to rise. The FNMA 3.5% bond we watch ended the week up 1.03, to $101.24. National average mortgage rates fell again in Freddie Mac’s Primary Mortgage Market Survey for the week ending September 26. Their chief economist commented, “These low rates should somewhat offset the house price gains… and keep housing affordability elevated.” Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?… A recent survey by a consumer financial services company reported that the majority of Americans, 55%, are confident that home prices will increase over the next 12 months.

>> This Week’s Forecast

MANUFACTURING, JOBS GROPE FORWARD… The continuing story of an economy that’s growing but oh so slowly should continue to be told this week. We’ll see two key reads on manufacturing in September, the national ISM Index and the Chicago PMI for the Midwest. Both are forecast just over 50, indicating expansion. The ISM Services index is also expected to come in with a growth number, although slightly below August’s.

The first Friday of the month will feature, as always, the prior month’s Employment Report. September Nonfarm Payrolls are predicted to be up a little, although well under 200,000 per month. This should not budge the Unemployment Rate, still above the Fed’s 6.5% target.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Sep 30 – Oct 4

Date	Time (ET)	Release	For	Consensus	Prior	Impact
M Sep 30	09:45	Chicago PMI	Sep	53.7	53.0	HIGH
Tu Oct 1	10:00	ISM Index	Sep	55.1	55.7	HIGH
W Oct 2	10:30	Crude Inventories	9/28	NA	2.635M	Moderate
Th Oct 3	08:30	Initial Unemployment Claims	9/28	315K	305K	Moderate
Th Oct 3	08:30	Continuing Unemployment Claims	9/21	2.825M	2.823M	Moderate
Th Oct 3	10:00	ISM Services	Sep	57.4	58.6	Moderate
F Oct 4	08:30	Average Workweek	Sep	34.5	34.5	HIGH
F Oct 4	08:30	Hourly Earnings	Sep	0.2%	0.2%	HIGH
F Oct 4	08:30	Nonfarm Payrolls	Sep	183K	169K	HIGH
F Oct 4	08:30	Unemployment Rate	Sep	7.3%	7.5%	HIGH

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… No one expects a hike in the Fed Funds Rate until well after it ceases its bond buying. As the Fed hasn’t even begun to taper that program, economists now expect a super low Funds Rate through much of 2014. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:	Consensus
Oct 30	0%–0.25%
Dec 18	0%–0.25%
Jan 29	0%–0.25%

Probability of change from current policy:

After FOMC meeting on:	Consensus
Oct 30	<1%
Dec 18	<1%
Jan 29	<1%

PrimeLending’s Weekly Newsletter

September 23, 2013/0 Comments/in Recent News /by Ence Homes

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Geralann Tabet
Production Manager
619 S. Bluff St. Tower 1, Ste 2012
St. George, UT 84770
Direct: 435.215.7342
Fax: 877.371.4777
Cell: 435.619.2452

For the week of September 23rd, 2013 – Vol. 11, Issue 38

>> Market Update

QUOTE OF THE WEEK… “Society is always taken by surprise at any new example of common sense.” —Ralph Waldo Emerson, American essayist, lecturer and poet

INFO THAT HITS US WHERE WE LIVE… The Fed took the markets by surprise last week when it announced it would NOT begin tapering its Treasury and mortgage bond buying. But this was just common sense. Since May, the Fed’s been hinting it could start tapering bond purchases in September, which sent bond prices south and mortgage rates north. People then worried this might hurt housing, a bright spot in our slow overall recovery. So it makes perfect sense for the Fed to keep buying billions a month worth of bonds to, in their words, “maintain downward pressure on longer-term interest rates.”

This is all great for the real estate market, although its recovery hasn’t faltered just yet. Existing Home Sales in August hit their highest level in more than six years: a 5.48 million annual rate, up 13.2% from a year ago. Builders are on the bandwagon too. Single-family Housing Starts climbed 7% in August and are up 16.9% from a year ago. Single-family Building Permits reached a five-year high, and the home builders confidence index is at its best level in nearly 8 years. So if, thanks to the Fed, mortgage rates edge back down, things should really get interesting.

BUSINESS TIP OF THE WEEK… To turn visitors into customers, optimize your website. Ask some current clients to test the site and tell you if it flows well. Then make the necessary adjustments.

>> Review of Last Week

FED, UP… All week, investors focused on Fed news and stocks finished up. Monday, former Treasury Secretary Larry Summers withdrew from consideration as the next Fed Chairman. The markets rallied, since it was feared Summers would quickly raise interest rates. Wednesday, we had the Fed’s surprise announcement it would not taper its bond buying program: “the Committee decided to await more evidence that [economic] progress will be sustained before adjusting the pace of its purchases.” Stocks hit an all-time high, then fell back Friday when two Fed members left the door open for tapering at the October meeting.

Meanwhile, the economy slowly moved ahead. Industrial Production and factory Capacity Utilization were up nicely in August. The Empire Manufacturing index dipped slightly for September but continued to show growth in the New York area, while the Philly Fed index of manufacturing in that region rose to its best reading in more than two years. Inflation stayed well under control, the Consumer Price Index up just 0.1% in August. Existing Home Sales, single-family Housing Starts and Building Permits, all up in August, show the real estate market continues to recover.

The week ended with the Dow up 0.5%, to 15451; the S&P 500 up 1.3%, to 1710; and the Nasdaq up 1.4%, to 3775.

Bonds benefited from the Fed’s commitment to keep buying them at the same healthy pace, as well as from Friday’s stock selloff. The FNMA 3.5% bond we watch ended the week up 1.91, to $100.21. Average fixed mortgage rates moved lower in Freddie Mac’s Primary Mortgage Market Survey for the week ending September 19 and mortgage applications were up 11.2% for the week ending September 13, according to the Mortgage Bankers Association. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?… The median price of an existing home sold in August was $212,100, up 14.7% from a year ago, the largest gain since October 2005.

>> This Week’s Forecast

HOME SALES MIXED, Q2 GDP HOLDS, INFLATION QUIET… New Home Sales are forecast up a notch for August, although Pending Home Sales are predicted off for another month. That measure of contracts signed indicates a dip in Existing Home Sales a few months out.

The economy still grows at a modest pace, with the GDP, Third Estimate, expected to remain at 2.5%. Inflation, however, should be benign, as Core PCE Prices are predicted to stay well within the Fed’s target range.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Sep 23 – Sep 27

Date	Time (ET)	Release	For	Consensus	Prior	Impact
Tu Sep 24	10:00	Consumer Confidence	Sep	80.0	81.5	Moderate
W Sep 25	08:30	Durable Goods Orders	Aug	0.4%	–7.4%	Moderate
W Sep 25	10:00	New Home Sales	Aug	416K	394K	Moderate
W Sep 25	10:30	Crude Inventories	9/21	NA	–4.368M	Moderate
Th Sep 26	08:30	Initial Unemployment Claims	9/21	325K	309K	Moderate
Th Sep 26	08:30	Continuing Unemployment Claims	9/14	2.775M	2.787M	Moderate
Th Sep 26	08:30	GDP – 3rd Estimate	Q2	2.5%	2.5%	Moderate
Th Sep 26	08:30	GDP Deflator – 3rd Est.	Q2	0.8%	0.8%	Moderate
Th Sep 26	10:00	Pending Home Sales	Aug	–2.3%	–1.3%	Moderate
F Sep 27	08:30	Personal Income	Aug	0.4%	0.1%	Moderate
F Sep 27	08:30	Personal Spending	Aug	0.2%	0.1%	HIGH
F Sep 27	08:30	PCE Prices – Core	Aug	0.1%	0.1%	HIGH
F Sep 27	09:55	U. of Michigan Consumer Sentiment – Final	Sep	77.3	76.8	Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… With the Fed continuing its big bond buying program, many economists now expect the Fed Funds Rate to stay at its super low level through most of next year. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:	Consensus
Oct 30	0%–0.25%
Dec 18	0%–0.25%
Jan 29	0%–0.25%

Probability of change from current policy:

After FOMC meeting on:	Consensus
Oct 30	<1%
Dec 18	<1%
Jan 29	<1%

PrimeLending Newsletter Sept 16

September 16, 2013/0 Comments/in Recent News /by Ence Homes

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Geralann Tabet
Production Manager
619 S. Bluff St. Tower 1, Ste 2012
St. George, UT 84770
Direct: 435.215.7342
Fax: 877.371.4777
Cell: 435.619.2452

For the week of September 16th, 2013 – Vol. 11, Issue 37

>> Market Update

QUOTE OF THE WEEK… “Small opportunities are often the beginning of great enterprises.” —Demosthenes, Greek orator and statesman

INFO THAT HITS US WHERE WE LIVE… Last week’s small opportunity that could turn into a great enterprise in the housing market came from reports by a few real estate data firms. One observed that as home prices continue to increase, demand from move-up buyers does too. After gaining value on rising equity, those buyers can then come up with a substantial down payment on a new home. Another firm pointed out that thanks to the recovery in home prices, 18.5 million homeowners now have at least 20% equity. That’s 40% of all homeowners who are in a prime position to sell.

The same firm added that there are an additional 8.3 million homeowners who should have at least 20% equity in the next 15 months. That’s assuming home prices keep appreciating at the rate they have. They very well may. A monthly real estate trends report from an online listing site said the median price of homes for sale in August was up more than 6% versus a year ago. Inventory, at 1.98 million in August, was up slightly from July, but down 2.5% from a year ago. The CEO commented, “… we are now looking at a housing market that much more closely resembles ‘normal.’” Nice words, those.

BUSINESS TIP OF THE WEEK… Never provide a service without delivering at least just a little bit more than the client expects.

>> Review of Last Week

TWO IN A ROW… Stocks last week posted their second consecutive gain, the Dow registering its best performance since January. Investors were starting to feel that this Wednesday’s FOMC meeting would result in a smaller reduction in the Fed bond buying program than had originally been feared. The thinking was that the disappointing August employment report might give the Fed pause about tapering its $85 billion a month in asset purchases to boost the economy. Some feel the central bankers might make a small reduction in Treasury purchases, but maintain mortgage bond buying at the current level to help keep mortgage rates low.

The week’s economic data certainly did not show much evidence of a strengthening economy. August Retail Sales, up 0.2%, fell short of expectations and University of Michigan Consumer Sentiment came in way lower than forecast. It was encouraging at first to see that Initial Weekly Unemployment Claims fell to 292,000, their lowest level since April 2006. Unfortunately this wasn’t a sign of a healthier job market, as a labor department official suggested the impressive drop was because of “faulty” reporting in two states that had experienced some computer glitches.

The week ended with the Dow up 3.0%, to 15376; the S&P 500 up 2.0%, to 1688; and the Nasdaq up 1.7%, to 3722.

Even though stocks were surging, Treasuries posted modest gains in a bond market that benefited from investors’ cautious tone approaching this week’s Fed meeting. The FNMA 3.5% bond we watch ended the week up .09, to $98.30. Average fixed mortgage rates remained unchanged in Freddie Mac’s Primary Mortgage Market Survey for the week ending September 12. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?… Fannie Mae reported that consumers polled in August anticipate home prices to go up 3.4% in the next 12 months.

>> This Week’s Forecast

INFLATION OK, HOUSING STILL HOLDING, BUT WILL THE FED TAPER?… The Consumer Price Index (CPI) for August is forecast to show inflation still in check. Housing Starts are expected up a little for August, and Building Permits should hold steady. Existing Home Sales are predicted to dip slightly but remain well north of the 5 million unit annual rate for August.

Interesting as all this is, the real focus will be on Wednesday’s FOMC meeting. We’ll finally learn if the Fed will begin tapering its bond buying program. If so, we’ll then want to note if that includes mortgage bonds. Any reduction of those bond purchases will negatively affect mortgage rates.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Sep 16 – Sep 20

Date	Time (ET)	Release	For	Consensus	Prior	Impact
M Sep 16	08:30	NY Empire Manufacturing Index	Sep	9.0	8.6	Moderate
M Sep 16	09:15	Industrial Production	Aug	0.5%	0.0%	Moderate
M Sep 16	09:15	Capacity Utilization	Aug	77.8%	77.6%	Moderate
Tu Sep 17	08:30	Consumer Price Index (CPI)	Aug	0.2%	0.2%	HIGH
Tu Sep 17	08:30	Core CPI	Aug	0.2%	0.2%	HIGH
W Sep 18	08:30	Housing Starts	Aug	910K	896K	Moderate
W Sep 18	08:30	Building Permits	Aug	943K	943K	Moderate
W Sep 18	10:30	Crude Inventories	9/14	NA	–0.219M	Moderate
W Sep 18	14:00	FOMC Rate Decision	9/18	0%–0.25%	0%–0.25%	HIGH
Th Sep 19	08:30	Initial Unemployment Claims	9/14	340K	292K	Moderate
Th Sep 19	08:30	Continuing Unemployment Claims	9/7	2.880M	2.871M	Moderate
Th Sep 19	10:00	Existing Home Sales	Aug	5.30M	5.39M	Moderate
Th Sep 19	10:00	Philadelphia Fed Index	Sep	9.0	9.3	HIGH
Th Sep 19	10:00	Leading Economic Indicators (LEI) Index	Aug	0.6%	0.6%	Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… The FOMC meets Wednesday but no one expects the Fed Funds Rate to move from its super low level. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:	Consensus
Sep 18	0%–0.25%
Oct 30	0%–0.25%
Dec 18	0%–0.25%

Probability of change from current policy:

After FOMC meeting on:	Consensus
Sep 18	<1%
Oct 30	<1%
Dec 18	<1%

PrimeLending September 9th newsletter

September 10, 2013/0 Comments/in Recent News /by Ence Homes

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Geralann Tabet
Production Manager
619 S. Bluff St. Tower 1, Ste 2012
St. George, UT 84770
Direct: 435.215.7342
Fax: 877.371.4777
Cell: 435.619.2452

For the week of September 9th, 2013 – Vol. 11, Issue 36

>> Market Update

QUOTE OF THE WEEK… “If you only care enough for a result, you will almost certainly attain it.” —William James, American philosopher and psychologist

INFO THAT HITS US WHERE WE LIVE… We all do care a lot about keeping the housing market on its steady path of recovery and last week saw more evidence of progress in that direction. An analytics and research firm that serves the industry reported home prices throughout the country were up 12.4% year-over-year in July, the 17th month in a row of annual home price growth. Another analytical company, specializing in property values, posted home prices up 10.2% year-over-year in August. They noted that the last time they saw double-digit annual home price growth was in mid-2006.

Home builders are aware of this. Private residential construction was up 0.6% in July, to its highest level since September 2008. The National Association of Realtors (NAR) forecast that existing home sales are expected to increase 10% for all of 2013, then hit 5.2 million by the end of 2014. And even with the recent rise in mortgage interest rates, the Mortgage Bankers Association reported mortgage applications up 1.3% for the week ending August 30. Economists also noted that rates now are roughly the same as they were two years ago, while housing affordability is at an all-time high.

BUSINESS TIP OF THE WEEK… Overcome your personal blind spots. Push yourself to try things that are alien to you. If you’re feeling comfortable, you’re probably not pushing yourself hard enough.

>> Review of Last Week

STOCKS UP ON BOTH GOOD NEWS AND BAD… The Dow ended its four-week losing streak, as Wall Street responded positively to developments regarding Syria, as well as to good and bad economic news, led by Friday’s disappointing Employment Report. Just 169,000 nonfarm payrolls were added in August, but June and July numbers were revised downward, so the net gain was only 95,000 jobs. The unemployment rate dipped to 7.3%, but this was again from a drop in the labor force participation rate to 63.2%, its lowest level in 35 years. But investors saw this all as good news, since the Fed may hold off on tapering its bond buying program.

There was also good economic news that actually was good. Better than expected reports came in for Initial Weekly Unemployment Claims, which dropped to 323,000. Productivity was up nicely in Q2, and ISM Services showed strong growth in that important sector. New car sales hit an annualized pace of 16.09 million vehicles, a rate not seen since before the financial crisis. Even the Syrian situation proved less worrisome to investors, who keyed on political assurances that any strike would be strategic and not require American forces on the ground.

The week ended with the Dow up 0.8%, to 14923; the S&P 500 up 1.4%, to 1655; and the Nasdaq up 2.0%, to 3660.

Decent economic data pushed bond prices down before the disappointing jobs report helped Treasuries, though not all bonds. The FNMA 3.5% bond we watch ended the week down 1.01, to $98.21. Average fixed mortgage rates edged up in Freddie Mac’s Primary Mortgage Market Survey for the week ending September 5. Their chief economist blamed it on “… signs of a stronger economic recovery. Real GDP was revised upwards to 2.5% growth.” Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.

DID YOU KNOW?… Governments need to watch budget deficits, which are financed by government bonds. When more bonds are issued, more government revenues go to paying interest on them, instead of for productive purposes.

>> This Week’s Forecast

CONSUMERS SPENDING MORE AND SO ARE THE FEDS… This Friday, the important Retail Sales report for August is forecast to be up, as consumer spending keeps helping the economy. But federal government spending still exceeds monies coming in, so the Federal Budget should show a deficit for August.

We also want to watch Initial Unemployment Claims, predicted to stay at their recently improved level below 350,000. The August Producer Price Index (PPI) is expected to show a very modest inflation rate for wholesale prices.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Sep 9 – Sep 13

Date	Time (ET)	Release	For	Consensus	Prior	Impact
W Sep 11	10:30	Crude Inventories	9/7	NA	–1.836M	Moderate
Th Sep 12	08:30	Initial Unemployment Claims	9/7	327K	323K	Moderate
Th Sep 12	08:30	Continuing Unemployment Claims	8/31	2.975M	2.951M	Moderate
Th Sep 12	14:00	Federal Budget	Aug	NA	–$190.5B	Moderate
F Sep 13	08:30	Retail Sales	Aug	0.4%	0.2%	HIGH
F Sep 13	08:30	Producer Price Index (PPI)	Aug	0.2%	0.0%	Moderate
F Sep 13	08:30	Core PPI	Aug	0.1%	0.1%	Moderate
F Sep 13	09:55	Univ. of Michigan Consumer Sentiment	Sep	82.0	82.1	Moderate
F Sep 13	10:00	Business Inventories	Jul	0.3%	0.0%	Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… Economists do not expect the Fed to raise the super low Funds Rate for a while, although observers think the central bankers could start tapering their bond buying program at next week’s meeting. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%