I read this short article sent to me by my friend and a Senior Loan Advisor at Mortgage California, Tom Balk. In addition to being very knowledgeable about the mortgage and housing markets, Tom is also a great person. Tom’s contact information can be found at the end of this post…
Evor,
Two weeks ago the reports in the media were about how foreclosures are increasing, rates are rising, new construction is stalling and potential home buyers are scared to make a purchase decision. Then this past week we see that purchase applications for mortgage loans are up for the 3rd consecutive week by another 1.8%. In addition, since last week’s reported 10% jump in pending home sales, words like growth and recovery in housing are appearing in the media. As a 20 year veteran of the real estate and mortgage business this info is crazy!
As an eternal optimist I truly want to believe that housing is improving. Unfortunately I just have not seen it yet, especially when CNNMoney.com posted a front page article about how 1.7 Trillion dollars in home equity was lost in 2010 due to home values decreasing.
Is the worst over??? …absolutely! I do have my concerns about the rapid increase in mortgage rates experienced this week. Since Monday we have seen a rise in rates of .375% – .50% and the odds on the increasing trend reversing itself is slim. Overall mortgage rates are up almost ¾% in the last month.
The government has pledged to purchase 600 billion dollars in treasuries to keep interest rates low and stimulate the economy. What is happening is the increase of government debt has many investors concerned about the value of the U.S. Dollar and therefore investors are weary of purchasing government debt. Bottom line is the government’s plan is not working the way it is supposed to work – what a shocker!
Although the stock market as of this report is basically flat from where it started the week, overall we are hearing about improving corporate profits. Business will keep making great profits and start hiring employees as soon as business owners are confident that the government will stop the reckless and wasteful spending and the consumer has confidence in the future!
As quiet as this current week was for economic news, next week could be one of the most volatile weeks we have seen in a while due to the extensive economic reports due out:
* Tuesday December 14th – Producer Price Index, Retail Sales and FOMC Announcement
* Wednesday December 15th – MBA Mortgage Applications, Consumer Price Index, Housing Market Index and Industrial Production
* Thursday December 16th – First Time Jobless Claims and Housing Starts
Have a great weekend..
Tom Balk, Senior Loan Advisor, Mortgage California
3236 Stone Valley Road West #100
Alamo, CA 94507
email: tom@tombalk.com Web: www.mortgagecalifornia.com/tombalk