Inside Lending Newsletter Dec 17



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

Dec 17, 2012 – Vol. 10, Issue 51

>> Market Update

QUOTE OF THE WEEK… “Our greatest glory is not in never falling, but in rising every time we fall.”–Confucius

QUOTE OF THE WEEK… “Every path hath a puddle.”–George Herbert, Welsh-British poet, orator, and priest

INFO THAT HITS US WHERE WE LIVE… Last week, the path to recovery in the housing market required us to step over the puddle of a 3% dip in Housing Starts for November. Yet that path has also taken us to an annual rate of 861,000 units, putting overall starts UP 21.6% versus a year ago, and single family starts UP 22.8%.New Building Permits were UP 3.6% in November, so no puddles in that path where single-family permits are UP 25.3% over a year ago. No wonder the NAHB homebuilder confidence index gained for the eighth month in a row.

Data over on the existing home front was even rosier. Existing Home Sales went UP 5.9% in November, crossing the 5 million unit threshold, at 5.04 million homes.Those sales are UP 14.5% from a year ago. The median price is UP 10.1% in November, going to $180,600, as the months’ supply of existing homes plummeted to 4.8 months. The FHFA index of prices for homes financed by conforming loans gained 0.5% in October, UP 5.6% versus a year ago.

BUSINESS TIP OF THE WEEK… If you’re persuasive about your product or service, clearly explaining its advantages and benefits, then you don’t really have to “sell.”

>> Review of Last Week

CLIFF WALKING… Investors basically fixated on Washington’s fiscal cliff negotiations. The week began optimistically, and stocks followed suit, heading upward dramatically. But later in the week, a resolution to the tax and spending issues looked less certain, and stock prices faded. Congress then went into recess for the holiday, but planned to return this Thursday if there’s a deal of some sort to consider. Nonetheless, all three stock market indexes posted gains for the week.

Investors were encouraged when Q3 GDP was revised up to 3.1% annual growth from the prior 2.7% estimate. The Philadelphia Fed Manufacturing Index reported expansion in December, although the New York Empire Manufacturing Index indicated contraction. Personal Income was up in November and Core PCE Prices, excluding volatile food and energy, showed inflation up only 1.5% for the year.Unfortunately, Michigan Consumer Sentiment dropped to its lowest level since January. Too much fiscal cliff reporting, no doubt.

For the week, the Dow ended up 0.4%, to 13191; the S&P 500 was up 1.2%, to 1430; and the Nasdaq was up 1.7%, to 3021.

Activity in the bond market was held in check by the continuing political back-and-forth over how to stop the economy from going of over a fiscal cliff. The FNMA 3.5% bond we watch ended the week down .09, at $106.14. National average mortgage rates were again at or near historic lows in Freddie Mac’s weekly Primary Mortgage Market Survey. The Mortgage Bankers Association reported demand for purchase loans fell slightly for the week, but are UP 9% versus a year ago

DID YOU KNOW?… “Market capitalization” refers to the total value of a company’s stock, obtained by multiplying the number of shares outstanding by the current price per share. A company with 15 million shares at $20 has a market cap of $300 million.

>> This Week’s Forecast

NEW HOME SALES, PENDING HOME SALES, CONSUMERS, FACTORIES… A short week features some nice holiday presents if you like receiving economic data. November New Home Sales look to be inching up to a 379,000 annual rate. Pending Home Salesare forecast up, but less than the prior month. December Consumer Confidence is expected down from last month’s reading, but the Chicago PMI Index of Midwest manufacturing should be up a bit, showing growth.

Today, stock markets close at 1 PM ET, the U.S. Treasury market closes at 2 PM ET, and all are closed tomorrow, in observance of Christmas. Happy Holidays to all!

>> 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 Dec 24 – Dec 28

 Date Time(ET) Release For Consensus Prior Impact
Dec 27
08:30 Initial Unemployment Claims 12/22 375K 361K Moderate
Dec 27
08:30 Continuing Unemployment Claims 12/15 3.200M 3.225M Moderate
Dec 27
10:00 New Home Sales Nov 379K 368K Moderate
Dec 27
10:00 Consumer Confidence Dec 70.0 73.7 Moderate
Dec 28
09:45 Chicago PMI Index Dec 51.0 50.4 HIGH
Dec 28
10:00 Pending Home Sales Nov 1.0% 5.2% Moderate
Dec 28
11:00 Crude Inventories 12/21 NA –0.964M Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… The Fed announced at their last meeting they’d keep the Funds Rate super low until unemployment drops to 6.5%, but no one expects that to happen any time soon 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
Jan 30 0%–0.25%
Mar 20 0%–0.25%
May 1 0%–0.25%

Probability of change from current policy:

After FOMC meeting on: Consensus
Jan 30      <1%
Mar 20 <1%
May 1 <1%


This e-mail is an advertisement for Geralann Tabet. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property of PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of PrimeLending, A PlainsCapital Company. © 2012 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. CL-13649; WV Div. of Financial Institutions- lender license ML31704 and broker license MB-31703. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender. NMLS# 316594

Equal Housing Lender

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