Market Update December 8th

Dated: 12/08/2015

Views: 298

Danyal Erickson
Mortgage Loan Originator
NMLS# 1299942
1517 N. Ankeny Blvd, Ste. A
Ankeny, IA 50023
Cell: (515) 491-6861
Office: (515) 965-1707
Fax: (844) 289-7133
[email protected]
For the week of December 7, 2015 – Vol. 13, Issue 49

>> Market Update 

QUOTE OF THE WEEK... "It's so simple to be wise. Just think of something stupid to say and say the opposite." --Sam Levenson, American humorist, writer, and television host

INFO THAT HITS US WHERE WE LIVE ...These days it's wise to say a home is a good investment, which is the opposite of what some observers now say. But the fact is, home values continue to appreciate. A leading real estate data firm reported home selling prices nationwide were up 6.8% in October compared to a year ago. They grew 1% over September's prices, which were up 0.6% over August's. Looking ahead, the data firm projects home prices will increase 5.2% by October 2016. Their CEO adds: "The rise in home prices over the past few years has largely been a healthy trend...home equity levels are now approaching pre-recession levels." 
In addition to making a home a good investment, price gains are also bringing more sellers into the market. This will of course help relieve the inventory shortages, which have held back sales growth in some markets. Nationally, Pending Home Sales were up just 0.2% in October, but they're up 3.9% versus October a year ago and have enjoyed 14 months in a row of year-over-year gains. This measure of contracts signed on existing homes suggests closed sales should be up slightly in November. Supply does continue to increase, as construction spending rose a better-than-expected 1% in October, hitting its highest level since December 2007.
BUSINESS TIP OF THE WEEK... Are your customers getting the full benefit of what you have to provide?Strive to have your work really make a difference in other peoples' lives. 

>> Review of Last Week

HERE COMES SANTA CLAUS... Wall Streeters got some early holiday gifts last week. Friday, the Dow and the S&P 500 rallied, giving Investors their biggest one-day gains in almost three months. With the Nasdaq posting a nice hike as well, all three major market indexes ended ahead for the week. The positive feelings came from another strong monthly jobs report. The economy added 211,000 Nonfarm Payrolls in November, handily beating expectations. Plus, October's number was revised upward by 27,000 payrolls. This confirmation that October was a solid month for jobs is significant, because monthly employment data is volatile and can get hit with big downward revisions.
The Unemployment Rate held at 5.0%, the labor force grew by 273,000, and Hourly Earnings, up 0.2% in November, are now up 2.3% over a year ago. Home builder payrolls jumped by 32,000, their biggest monthly gain since 2005. Investors felt this data indicates the economic recovery is robust enough to withstand a rate hike from the Fed in December. As usual, all was not perfect, as the ISM Index showed manufacturing contracting a bit in November. The ISM Services index also unexpectedly dropped to 55.9, although that number still shows a decent level of growth. Initial Unemployment Claims came in at 269,000, the 39th straight week they stayed below 300,000. 
The week ended with the Dow UP 0.3%, to 17848; the S&P 500 up two points, to 2092; and the Nasdaq UP 0.3%, to 5142. 
The strong jobs report threatened bond prices, but investors ultimately shook off the positive data, as Treasuries gained and other issues dipped just a little. The 30YR FNMA 4.0% bond we watch finished the week down .02, to $105.95. National average fixed mortgage rates dropped for the third week in a row in Freddie Mac's Primary Mortgage Market Survey for the week ending December 3.Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.
DID YOU KNOW?... Construction spending rose every month this year through October, and is expected to be an important support for the economy in the final quarter.

>> This Week’s Forecast

FEELING BETTER, CONSUMERS BUY MORE AT RETAIL... Even though the University of Michigan Consumer Sentiment index should dip, it will continue to show that the regular folks, whose spending drives 70% of the economy, are still in a good mood. Proof of that is expected to come with the Retail Sales report, forecast to deliver a nice bump for consumer spending in November. There will be minor interest in the Core Producer Price Index (Core PPI), predicted to show little wholesale price inflation, and the Federal Budget, continuing to confirm our government's willingness to run in the red. 
>> 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 7 – Dec 11
Retail Sales
 Date Time (ET) Release For Consensus Prior Impact
Dec 9
10:30 Crude Inventories 12/5 NA 1.177M Moderate
Dec 10
08:30 Initial Unemployment Claims 12/5 269K 269K Moderate
Dec 10
08:30 Continuing Unemployment Claims 11/28 2.167M 2.161M Moderate
Dec 10
14:00 Federal Budget Nov NA -$56.8B Moderate
Dec 11
08:30 Producer Price Index (PPI) Nov -0.1% -0.4% Moderate
Dec 11
08:30 Core PPI Nov 0.1% -0.3% Moderate
Dec 11
08:30 Nov 0.3% 0.1% HIGH
Dec 11
10:00 Business Inventories Oct 0.1% 0.3% Moderate
Dec 11
10:00 Univ. of Michigan Consumer Sentiment Dec 91.6 93.1 Moderate

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months... Now, about 8 out of 10 Fed watchers believe the central bank will start raising rates at their meeting next week. Of course, no one knows for sure.Note: In the lower chart, a 78% probability of change is only a 22% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus
Dec 16 0.25%-0.50%
Jan 27 0.50%-0.75%
Mar 16 0.50%-0.75%

Probability of change from current policy: 
After FOMC meeting on: Consensus
Dec 16        79%
Jan 27       82%
Mar 16
This e-mail is an advertisement for Danyal Erickson. 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 this message is the property of Stearns Lending, LLC and cannot be reproduced for any use without prior written consent. This message is intended for business professionals only and is not intended for distribution to consumers or other third parties. The material does not represent the opinion of Stearns Lending, LLC. This is not a commitment to lend. Program restrictions apply. Stearns Lending, LLC offers many loan products. Stearns Lending, LLC is a California Limited Liability Company headquartered at 4 Hutton Centre Drive, 10th Floor, Santa Ana, California 92707. (800) 350-LEND (5363) Company NMLS# 1854 ( Stearns Lending, LLC is licensed, registered, or exempt from licensing to conduct business in the following states which require license disclosure on advertising materials: Arizona Mortgage Banker License #0905413; Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act RMLA# 4130495; Georgia Residential Mortgage Licensee #24066; Illinois Residential Mortgage Licensee #MB.6760686; Kansas Licensed Mortgage Company #MC.0025047; Massachusetts Mortgage Lender/Broker License #MC1854; Licensed by the Mississippi Department of Banking and Consumer Finance; Missouri Residential Mortgage Loan Broker License #12-2052; Licensed by the New Hampshire Banking Department; Licensed by the N.J. Department of Banking and Insurance; Rhode Island Licensed Lender; Registered under Texas SML Mortgage Banker Registration; Virginia State Corporation Commission Lender/Broker License #MC-2184; Washington Consumer Loan Company License #CL-1854. For State of Nevada residents Stearns Lending, LLC is a mortgage lender promoting the loan products or services contained in this article; the business phone number that Stearns Lending maintains on file with the State of Nevada Department of Business and Industry is (714) 513-7777. This information is accurate as of July 24, 2015. © 2015 Stearns Lending, LLC All Rights Reserved. 

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