Inflation remained tame in April ...

Inflation remained tame in April and below the U.S. Federal Reserves higher end target of 2%. The Core Personal Consumption Expenditure, which measures the prices paid by consumers for goods and services without the volatility caused by movements in food and energy prices, was unchanged in April and has been trending lower in recent months. This could signal a slowdown in economic activity.

In the manufacturing sector, the Chicago Purchasing Managers Index rose to 58.7 in May, well above the 49.0 reading seen in April. Within the report it showed that the employment component jumped to 58.1 from 48.7. Manufacturing across the nation has been slowing in the past few months and though one report doesn't constitute a pattern, it was good news for manufacturing.

Consumer sentiment rose to its highest level in nearly six years in May to 84.5 due to a rise in home prices and a surge in U.S. Stock markets - the index was at 76.4 in April. However, in a separate report, consumer spending fell by 0.2% last month making it the first decline since May of 2012. The drop in spending could be due in part to the rise in payroll taxes this year - consumer spending drives 70% of U.S. economic activity.

Today's economic data came in weaker than expected ...

As Americans filing for first time unemployment benefits rose while growth in the U.S. was a bit less than expected. In addition, the housing market received some mixed news.

The Labor Department reported this morning that Weekly Initial Jobless Claims rose by 10,000 in the latest week to 354,000 and above the 340,000 that was expected. The labor markets are producing jobs at a modest rate, but not enough to bring down the stubbornly high unemployment rate, currently at 7.5%. The four-week moving average for new claims, which smoothes out seasonal abnormalities, edged up 6,750 to 347,250.

Growth in the first quarter of 2013 rose by 2.4%, as measured by the Gross Domestic Product (GDP) data that was released this morning. GDP rose by 2.4% for the second reading for the first three months of the year and the Bureau of Economic Analysis said that overall economic activity is not greatly changed. GDP measures the output of goods and services produced by labor and property located across the nation.

The last data point this morning was a decline in Pending Home Sales rising by only 0.3% in April and below the 1.5% increase expected. However, the index now stands at 106.0, the highest reading since April of 2010 and is up 10.3% since April of 2012. The National Association of Realtors said that due to inventory shortages, higher home sales will push up home values to the highest level in five years. The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes.

FOUR is not a 4 letter word ...

Forwarded exclusively by:	Bob Rosenbaum The Rosenbaum Lending Group Office: (703) 879-5200 Email: Bob@MyTalentedLender.com website: www.MyTalentedLender.com NMLS#: 649782
Thursday, May 30, 2013
FOUR is not a 4 letter word With rates inching up by the day, it's easy to forget that we have spent years and years with rates well above 4%. Here's a graph from FRED, the Federal Reserve Economic Data, showing where rates have been over the last 30 years. The point is that now is not the time to panic, it's just the time to get busy. Don't get caught up chasing yesterday's rates, they are not likely to return. Instead, focus on what you can afford NOW, and don't let more time slip away. Last Week's Mortgage Rates Recap Last week mortgage rates found themselves staring 4% in the eye for the first time in many months. For the second week in a row the MBS (Mortgage Backed Securites) market had a day with huge losses leading to intraday price changes. We ended the week slightly above the Support level of 101.30 and we were hoping to see things improve a bit. Different lenders saw rates move differently depending on many different variables, highlighting that the only thing that remains constant is volatility. This Week's Mortgage Rates Forecast Mortgage Rates Currently Trending: HIGHER This week started out with a huge selloff in the bond market, affecting both the 10yr Treasury and MBS (Mortgage Backed Securities). Rates changed two and even three times during the day on Tuesday, depending on the lender. The action was driven by both strong economic news here at home as well as indications from overseas banks that they would continue their own Quantitative Easing if necessary. BOTTOM LINE: While we may see short limited opportunities to improve on rate or rebate pricing by monitoring the live market, the overall trend is still that rates will continue to climb. Consumers who have seen their expected interest rates jump need to realize that the market is not showing any reason to see those lower rates come back any time soon; it's better to lock in than to chase rates. Be sure to discuss your rate goals with your MLO (Mortgage Loan Originator), and we suggest keeping in contact with your MLO who is connected to the market with a live feed to protect your mortgage interest rates this week.                                 RateAlert’s Most Trusted Mortgage Loan Officers MLOs that subscribe to RateAlert’s Executive service have the training and market knowledge, along with the data at their fingertips, to expertly help you navigate the difficult and sometimes treacherous process of obtaining home financing and securing some of the best rates the market has to offer. If you would like to learn more about how to time the market to obtain the best interest rates, don’t hesitate to contact the MLO who sent you this commentary.
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Rates are on the rise ...

Home loan rates have pushed up to their highest levels in a year due to better than expected economic data and fears that the U.S. Federal Reserve may pull back on its stimulus program that was put in place to promote jobs and speed up the economic recovery. The Mortgage Bankers Association reported today that its Market Composite Index, a measure of loan application volume, fell nearly 9% in the latest week and has declined three weeks in a row. The refi index fell 12% while the purchase index increased by 3%.

Over on the foreclosure front, CoreLogic reports that completed foreclosures in April amounted to 52,000, which is a 16% decline from the 62,000 that were completed in April of 2012. From March to April foreclosures were flat. By comparison, between the 2000 and 2006, completed foreclosures averaged 21,000 per month across the nation. Since September of 2008 there have been 4.4 million completed foreclosures.

Lender Processing Services, a leading provider of integrated technology, data and analytics to the mortgage and real estate industries, reported yesterday that home prices rose 1.4% from February to March and were up 7.6% year-over-year from March 2012 to March 2013. The average home price was $213,000 in March, up almost 3% from the beginning of the year.

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Home prices surge ...

Home prices rose at the fastest annual pace in 7 years in March as the sector continues to rebound after the housing bubble burst. The Case Shiller 20-city Home Price Index rose 10.9% year-over-year ended in March, above the 10.1% expected. On a month-over-month basis, the index rose 1.12%. In the first quarter of 2013, the seasonally adjusted national index was up 3.9%, above the 2.4% from the final quarter of 2014.

Global Stocks are rising after central banks around the globe reassured investors that easy money policies will continue through 2013 and should last until mid-2014. U.S. Stocks opened sharply higher and is putting a big dent in Bond prices. The recent fall in Bond prices have caused home loan rates to rise in the past few week, though rates are still closer to record low levels. Bond prices and home loan rates work in inverse relationships, as Bond prices rise, rates tend to move lower and vice versa.

The summer driving season kicked off this past weekend with gas prices at the pump at $3.65 a gallon on Memorial Day. This good news for motorists is that prices tend to move lower in June and will most likely decline as the summer unfolds.

Americans across the nation are feeling more optimistic on the economy due to an improving job market and better than expected economic data that has been reported lately. The Consumer Confidence Index rose to 76.2 in May, the highest level since February 2008. A spokesperson for the Conference Board, which issues the survey, said, "Consumers’ assessment of current business and labor-market conditions was more positive and they were considerably more upbeat about future economic and job prospects."

What happened to rates on Friday? What's next?

Forwarded exclusively by:	Bob Rosenbaum The Rosenbaum Lending Group Office: (703) 879-5200 Email: Bob@MyTalentedLender.com website: www.MyTalentedLender.com NMLS#: 649782
Monday, May 06, 2013
This week; not much in the way of economic data this week. Treasury will auction $69B of notes and bonds beginning Tuesday through Thursday. Ben Bernanke is scheduled to speak on Friday in Chicago. Some other Fed officials also speaking through the week, the interest will likely focus on last Friday’s surprisingly strong April employment report that sent stocks higher and increased the yield on the 10 yr and mortgage markets; the 10 yr had one of the strongest increase in rates in one day for a number of years---from 1.63% to 1.74% and mortgage rates up about six basis points in rate. With very little economic data this week markets likely will be looking for any comments and news out of Europe and China. The strong selling last Friday erased all the improvement in rates over the previous three weeks in a matter of three hours. It is going to take a few days this week for markets to settle down, however the swiftness and depth of the selling on Friday is somewhat a concern that possibly the bond market had become too bullish. Technically, Friday’s selling did do damage to the near term outlook. The 10 now trading above its 20 day average and our momentum oscillators, after holding positive for almost six weeks have moved back to neutral; not bearish bit lost all the bullish momentum. We have chart support for the 10 at 1.75%, Friday’s close 1.74%. Monday should start generally flat with no news, any additional selling is going to further damage the current bullish view.
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