Inside Lending Newsletter Dec 3



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 3, 2012 – Vol. 10, Issue 49

>> Market Update

QUOTE OF THE WEEK… “We acquire the strength we have overcome.”–Ralph Waldo Emerson, American writer

INFO THAT HITS US WHERE WE LIVE… We who toil in the housing market must surely be very strong by now, having overcome some powerful forces, not the least of which has been the downward pressure on home prices. The latest evidence that pressure is letting up came with the Case-Shiller home price index, UP 0.4% for September and UP 3% versus a year ago. Nineteen of 20 metros reported higher prices not just for the month, but for the past three months! The FHFA index of prices for homes financed by conforming mortgages was UP 0.2% for September and UP 4.4% over a year ago.

New Home Sales were down 0.3% for October but are still in an up trend, 17.2% ahead of sales a year ago. The median price of $237,500 is UP 5.7% versus a year ago. The months’ supply is 4.8, near its lowest levels since 2005. The median number of months a new home is on the market before being sold is now down from 7.2 a year ago to 5.9, its lowest level in 5 years. Pending Home Sales (contracts on existing homes) also rose 5.2% in October, are up 13.2% from a year ago, and are at their highest sustained level in 5 years. Demand is definitely picking up.

BUSINESS TIP OF THE WEEK… A successful sales pitch is repetitive. Make your key point at the start, explain it in the middle, then reinforce it at the end. Studies show people trust an idea more after it’s repeated at least three times.

>> Review of Last Week

TIPTOEING ALONG THE FISCAL CLIFF… The Dow stayed above 13,000 for the second week in a row, a bit of a miracle, given investor worries about the fiscal cliff. If the recently re-elected President and Congress can’t come to agreement on deficit-reducing measures by January 1, mandatory tax hikes and spending cuts could send us off that fiscal cliff and back into recession. Market indexes went up and down, as leaders in Washington offered positive and negative opinions on whether “substantive progress,” to use one of their favorite terms, had been made.

October economic data remained mixed but mostly positive. Durable Goods orders were unchanged, but beat an expected decline. The Richmond Fed index shot into positive territory, indicating manufacturing growth in the mid-Atlantic region. New and continuing jobless claims both dipped but remain high. Personal Income stayed flat and Core PCE inflation is still in check. Finally, the second estimate of Q3 GDP was revised up to a 2.7% annual growth rate, not the 3%–4% we need, but edging closer.

For the week, the Dow ended up 0.1%, to 13026; the S&P 500 was up 0.5%, to 1416; and the Nasdaq was up 1.5%, to 3010.

Thanks to investor fears about the fiscal cliff, the safe harbor of bonds looked attractive and prices held nicely. The FNMA 3.5% bond we watch ended the week up .15, at $106.24. National average fixed mortgage rates remain down near record lows in Freddie Mac’s weekly Primary Mortgage Market Survey. Not surprisingly, the Mortgage Bankers Association reported purchase loan applications UP 3% for the week and UP 8% from a year ago.

DID YOU KNOW?… Fiscal cliff refers to the tax and spending cuts expiring on December 31. They include last year’s temporary payroll tax breaks, the 2001 and 2003 Bush tax cuts, and specific business tax cuts. New spending cuts and more taxes to fund the President’s health care reform will also go into effect.

>> This Week’s Forecast

MANUFACTURING, SERVICES, AND, OH YES, JOBS!… This week features the ISM Manufacturing and ISM Services Indexes, both expected off for November, though still above 50, showing modest growth. Somehow, American workers keep upping their output, as Productivity is forecast to rise once again in Q3.

The week closes with the November Jobs Report. This is the read that means the most to us, as employment drives housing. Unfortunately, a modest gain of 90,000 new jobs is predicted, with unemployment back up to 8.0%.

>> 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 Nov Dec 3 – Dec 7

 Date Time (ET) Release For Consensus Prior Impact
Dec 3
10:00 ISM Manufacturing Index Nov 51.2 51.7 HIGH
Dec 5
08:30 Productivity – Rev. Q3 2.7% 1.9% Moderate
Dec 5
10:00 ISM Services Index Nov 53.7 54.2 Moderate
Dec 5
10:30 Crude Inventories 12/1 NA –0.347M Moderate
Dec 6
08:30 Initial Unemployment Claims 12/1 382K 393K Moderate
Dec 6
08:30 Continuing Unemployment Claims 11/24 3.275M 3.287M Moderate
Dec 7
08:30 Average Workweek Nov 34.4 34.4 HIGH
Dec 7
08:30 Hourly Earnings Nov 0.1% 0.0% HIGH
Dec 7
10:00 Nonfarm Payrolls Nov 90K 171K HIGH
Dec 7
08:30 Unemployment Rate Nov 8.0% 7.9% HIGH
Dec 7
08:30 Univ. of Michigan Consumer Sentiment Dec 82.4 82.7 Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… Until the Fed sees signs of solid, ongoing economic recovery, FOMC members have vowed to keep rates super low. They think this will be “at least through mid-2015.” 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
Dec 12 0%–0.25%
Jan 30 0%–0.25%
Mar 20 0%–0.25%

Probability of change from current policy:

After FOMC meeting on: Consensus
Dec 12 <1%
Jan 30 <1%
Mar 20 <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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