Home Prices are Rising

U.S. home prices rose in June from the same month last year, the first year-over-year increase since the summer of 2010. The increase is the latest evidence of a nascent recovery in the housing market. The last time the year-over-year index increased was in September 2010. For much of that 12-month period, the government was offering a home-buying tax credit. So that really doesnt count as much, we expected that increase. However this is with really no help at all. Great rates does make it easier though. My report also showed that all 20 cities tracked by the index rose in June from May, the second consecutive time in which every city posted month-over-month gains. And all but two cities posted stronger gains in June than May. These cities have been the hardest hit cities, i.e. tampa, Miami, las Vegas, Arizona to name a few. The FAR Tells us that "The housing market is making a modest but steady recovery in part because homes are more affordable: Mortgage rates have fallen to near-record lows. Housing prices are about one-third lower than at the peak of the housing bubble in 2006. Those trends have helped lift sales of both new and previously occupied homes. Sales of previously occupied homes increased in July from June, the National Association of Realtors said last week. Sales have jumped 10 percent in the past year." I believe now is the time to buy a home, if you are standing on the sidelines watching when to buy, you might have los $$ already, here in Florida we are seeing price wars, well at least in my area Tampa, I cant speak for other cities, however if the home is priced right, its not lasting on the market and we see bidding wars.

Foreclosures

The Bar says attorneys have an obligation to report suspected foreclosure fraud to a judge.

An article in Monday’s bar newsletter says that applies even if the foreclosure case is over and the house has been sold.

The advice comes amid state investigations into practices at several major Florida foreclosure firms. These include forged signatures, backdated documents and “robo-signers” who falsely claim to have verified mortgage paperwork.

Bar officials say it’s unclear what judges will do if notified about fraud in a finished foreclosure. In pending cases judges could halt the proceeding while the allegations are investigated.

There have been some 1.7 million home foreclosures in Florida since 2007.

What do you think, is this something we have to do?

Its TIME to BUY

Buying a home has always been the best investment, and today it's even better. Reports of doom and gloom must be put into perspective, and the longer you hold out waiting for the best deal the more likely you are to miss a great opportunity. Here are some reasons why now is a good time to buy a home.

It's a Buyer's Market, Folks
Many sellers have upgraded properties to increase curb appeal. Your next home most likely has new windows, a top-notch roof, energy efficient appliances, and a much nicer bathroom and kitchen. There is no need to worry about major home improvement projects; today's homes are move-in ready.

A ton of brand new homes are on the market at great prices, too. Buy a new construction and be the first to park in the garage, paint the walls, and landscape the yard. A new home is your opportunity to put a stamp on something truly meaningful.

You Can Afford to Be Choosy
Your choices in the housing market may feel a little staggering. You have the chance to shop real estate until you find exactly what you want. Record low mortgage rates are a nice bonus that make your dream home even more affordable.

What About Expired Government Home-buying Incentives?
Think you've already missed a great deal? Actually, these incentives caused prices to rise for a short time, offsetting some advantages to buyers. It's all part of the cause and effect cycle in real estate, and what you're looking for is balance.

It's Time to Buy a Home
Remember, you're not buying a house—you're buying a home. Weigh your options carefully, but don't wait so long that you miss this good opportunity. Picture your family and friends relaxed and comfortable in every room and you'll see yourself, proud of your smart investment.

Mortgage Rate Falls Under 4.5 %
Freddie Mac reports that long-term mortgage rates moved south again this week.

Interest on 30-year fixed loans hit a new low of 4.49 percent, compared to 4.54 percent last week and 5.22 percent a year ago; and the 15-year mortgage landed at 3.95 percent, down from 4 percent last week and 4.63 percent a year ago.

Five-year adjustable-rate mortgages reached a new low of 3.63 percent, down from 3.76 percent last week and 4.73 percent a year ago; while one-year ARMs fell to 3.55 percent from 3.64 percent last week and 4.78 percent a year ago.

So with Interest rates so low WHY are homes not moving. Its basically pretty simple,
F E A R ! Buyer are very scared right now, they do not feel secure in their jobs,the economy is in the toilet and so those of us who have Jobs need to work extra hard to keep them, and those of us who have some money need to work extra hard to keep it, and not spend it. Buying a big ticket item like a home requires major commitment which todays buyers are not willing to do, not until the econom gets better.

Will it turn around, yes it will , when? I would say we will see better results in summer of 2011.

Good News for Florida

Florida's existing home sales ROSE in March, which means that sales activity has increased in the year-to-year comparison for 19 months, according to the latest housing data released by Florida Realtors®.

Existing home sales increased 24 percent last month with a total of 16,294 homes sold statewide compared to 13,090 homes sold in March 2009, according to Florida Realtors. Statewide existing home sales last month increased 37 percent over statewide sales activity in February. Also noteworthy: While March's statewide existing-home median price of $137,000 was down from the same time a year ago, it was 4.3 percent higher than February's statewide existing-home median price.

Florida Realtors also reported a 63 percent increase in statewide sales of existing condos in March compared to the previous year's sales figure; statewide existing condo sales last month rose 40.6 percent over the total units sold in February. Though March's statewide existing-condo median price of $96,900 was down compared to the year-ago figure, it was 5.1 percent higher than February's statewide existing-condo median price.

Seventeen of Florida's metropolitan statistical areas (MSAs) reported increased existing home sales in March while all MSAs had higher condo sales. A majority of the state's MSAs have reported increased sales for 21 consecutive months.

I believe we are heading in the right direction! It also means the PRICES WILL SOON RISE!

if you are a buyer I believe the time to act is NOW, tomorrow might be to late.

FLORIDA AVERAGE RESIDENTIAL SALES PRICE

The March 2010 average residential sales price of $180,069 represents a 6.01% increase over last month, a 5.38% increase over last quarter (3 months ago), and a 2.58% decrease over March of 2009. Although we're close, we have not broken through the low hit in January 2009. After about 18 months of finding news lows every month, we have spent the last 13 months supporting the low found in January 2009.

The Average Residential Sales Price represents the average sales price of closed residential sale transactions as reported through the MLS for single family homes, townhomes, condominiums, and villas. As noted on the GTAR website, these figures do not represent private sales or new construction sales unless entered into MLS. This is only one of many available indicators, but taken consistently over time, provides a good view of residential market activity.

The reality of what we've been through - The March 2010 average residential sales price represents a 26.11% decrease from 2 years ago, a 36.26% decrease from 3 years ago, and a 42.35% decrease from the high of $312, 356 hit in July 2006. It is encouraging to see what appears to be tremendous support at this average sales price

will things get better or worse? what is your take. I believe that we are doing the right things to get the market back where it should be however because we are so deep in the hole it will take a long time for us to get back to normal, my prediction is late 2011.

New changes

Dear Clients:

I hope this email finds you well, as always I am constantly looking for ways in which to improve my business so that I may
Better serve you my clients.

This past year has been a trying one for the real estate industry as you have probably heard, many businesses have gone
Under and an estimated 67% of agents have either quit the business or gone part-time. The industry has been hit with a
Big right hook however many of us are still standing while others have folded. This is why I have aligned myself with one
Of the most successful teams in Florida to be able to better serve you.

Team Brumbach Realty Group has been in the real estate industry for over 10 years, together we have over 30 years of real estate experience
To better serve you “our clients”. Team Brumbach is also a “one stop real estate solution” where we offer you, residential sales, commercial real estate,
Property management, short sales expert, distressed property certified, REO’s, Mortgage Lending, and Loan Modifications. Team Brumbach Realty Group
Does it all and we are here to serve you.

This was not an easy decision to make however it was the right decision to make. While looking for the right team to merge with, I needed someone that
Shared the same value’s as I did as well as shared the same goals and ambitions while at the same time keeping our focus on customer service, the team
That always came out on top was Team Brumbach Realty group.

Please consider Team Brumbach Realty Group for your next listing or purchase and or any of your real estate needs.

We are now stronger than we ever have been, while others are leaving the business we are growing our business.

I look forward to hearing from you soon.

RISING PRICES NOT JUST AT THE GAS PUMP...
If you've noticed your grocery bill getting bigger lately, you're not alone - and it's likely not because you're eating more. According to Rising Food Prices: Policy Options and World Bank Response, global wheat prices have increased a whopping 181% over the past three years - and overall, food prices have increased by 83%!
Concerned? You're not alone. A recent poll showed that 73% of consumers cite higher grocery bills as a concern; with nearly half saying food inflation has caused a hardship for their households. In fact, food prices ranked just below record-high gasoline prices on the list of things people are worried about.
According to Gregory Karp, author of Living Rich by Spending Smart, here are three simple ways you can save when it comes to food and drink prices:
Time your grocery shopping. With the exception of milk, eggs, and bread, most grocery store products are put on sale at least once every 12 weeks, as Karp notes, often for "20%-30% their usual price." So instead of buying what you need every week or two, stock up on non-perishables when they go on sale. It may take a little planning ahead on your part, but the annual savings is substantial. As Karp writes, "The average American family of four spends about $8,500 on groceries each year. Trimming that bill by 20% saves $1,700."
Make eating out a special treat. Enjoying a nice meal out is always a fun thing to do, so let it be just that, a fun thing to do rather than a solution for being too tired or too rushed to cook. When you do have the time and energy to cook, make two or three times the amount and freeze the extras. Then, when you're rushed, a home-cooked (and probably healthier) meal will be waiting in your freezer, and will likely take less time to reheat than a night out or take-out delivery. And you will save more than time: According to Karp, "A restaurant meal for two costs $30 even at inexpensive chain restaurants. Home-cooked meals typically cost half as much, if not less. Convert two restaurant trips into two frozen homemade dinners each month, and you will save $360 per year."
Don't buy bottled water. Believe it or not, recent tests have shown that bottled water and tap water are pretty equal when it comes to safety and taste. For example, ABC News tested New York City tap water and bottled water for bacteria and found no difference in purity. Plus, there are environmental benefits of using less plastic. Karp estimates that people who drink one $6 case of bottled water each week can save $311 per year if they stop buying bottled water. He notes that "tap water costs five cents per gallon, or less than two cents per equivalent case - about $1 for the year."
Hey, if you eat...rising food prices impact you. Use the above tips and suggestions to help minimize your concerns about rising food prices, and stay healthy and smart.

Credit scores can drop after getting loan help (edit/delete)
Florida Realtors® News

Daily Briefing: Monday, March 22, 2010
A service for members of Florida Realtors

Some homeowners who sign up for the government's mortgage assistance program are getting a nasty surprise: Lower credit scores.

For borrowers who are making their payments on time but are on the verge of default, the Obama administration's loan modification program can reduce their credit score as much as 100 points. That makes it harder to get a loan and can present a problem when applying for a new job.

Housing counselors say it's unfair, especially because the news often comes as a surprise to homeowners.

"Why should people's credit be hurt even worse when they're trying to do the right thing?" said Eileen Anderson, senior vice president at Community Development Corp. of Long Island, a housing counseling group in New York.

And many homeowners are angry that a program designed to help carries such a penalty, said Kathy Conley, a housing counselor with GreenPath Inc., a nonprofit group in Farmington Hills, Mich.

"It's a feeling of being duped," she said.

Still, the impact is far less severe than a foreclosure, where borrowers typically find their credit is in tatters for years. That's due to the cumulative impact of many months of missed payments and the foreclosure itself, which drags down a homeowner's' credit by 150 points or more on a scale of 300 to 850.

To enroll in the Obama administration's $75 billion "Making Home Affordable" program, borrowers enter a trial period in which they make at least three payments. But some are finding out that their credit score takes a dive during this trial phase. It happens once their mortgage company notifies the three big credit bureaus - Experian, Equifax and TransUnion.

However once you get modified or helped you will loose 100 Points on your FICO even if you are not late on your payment

A plan to channel $1.5 billion to housing agencies in five states hit hardest by the real estate crash has Florida officials hopeful they can keep more people in their homes and out of foreclosure.

President Obama announced the program Friday while in Nevada for a town hall meeting and campaign push for Senate Majority Leader Harry Reid. The states included in the new program are Nevada, California, Arizona, Florida and Michigan, all of which consistently rank high on any measure of mortgage woe.

But with more than 20 percent of its home loans seriously delinquent or in foreclosure, Florida tops the nation for defaults, according to a Mortgage Bankers Association report also released Friday.

Obama administration officials called the $1.5 billion “modest” considering the depth of the nation’s housing crisis but said they hope it will lead states to come up with innovative solutions tailored to their own needs.

Those solutions are expected to plug holes in the administration’s earlier Making Home Affordable Program, which has struggled to help unemployed homeowners who don’t have the income to qualify for a loan modification.

It also attempts to tackle one of the thorniest issues to come out of the market meltdown – how to cope with upside-down loans where the homeowner owes more than what the property is worth.

About 41 percent of South Florida borrowers, and 55 percent of Treasure Coast borrowers were underwater in December, according to analysts at Zillow.com.

The $1.5 billion in taxpayer money, which is coming from the federal Troubled Asset Relief Program, can be used to help negotiate with lenders to write down mortgages on underwater loans.

“This really could be extraordinary relief that will be very welcome in Florida,” said Jaimie Ross, president of the Florida Housing Coalition. “It’s pretty clear this is a program designed to keep homeowners from losing their homes.”

Stock and Money

Congratulations to the Super Bowl Champion New Orleans Saints, the City and its fans. It was a terrific game and it's nice to see the city of New Orleans celebrate, after going through a period of hard times. And the Halftime Show put on by The Who, reminded us that father time is relentless and takes it toll.

Stocks have fallen sharply the past three weeks with the Dow losing 700 points along the way, which has helped to keep the interest rates steady. But if Stocks are are showing some positive technical signs of a turnaround and potential rebound higher. This would be a negative for Mortgage rate. This would be what everyone would be fearing the rise of rates!

On Wednesday, Fed Chairman Ben Bernanke is scheduled to testify before the House Financial Services Committee to discuss the Fed's plan to withdraw emergency stimulus from the economy - including the $1.25T Mortgage backed Security purchase program. do you think releasing this extra money is a good idea for the country or should we leave thing alone to see if the country can make it on its own with out any more pumping of cash.

Positive Not Negative

I dont know about you, but for me this has been a very long week, by Tuesday I was hoping it was Friday.

My office has been busy and so its been a bit crazy. What I have noticed this week here In Tampa is that things are going to get better. As you all know we have been hit pretty hard, our prices here have dropped over 25%, my home has lost 50% of its Value in just 18 months! and so yes its been bad.

But my fellow Americans I do see a light at the end of the tunnel.

I know we all watch the news, "new homes fell by 10%" "existing homes sales fell by 10%" "this is the worst its been in the last 25 years", well you know what, I AGREE, but enough with the bad news.

how about some good news! how about the fact that now our median price here in Tampa is $140,000 from the $245,000 two years ago, and now first time buyers and people with lower income can BUY HOMES, how about the fact that homes are starting to move and we are having some closings, how about the fact that my subdvision sold 3 homes in just this past week. I know its bad out there, and I know that people are going through very hard times, I get it! but I think that we should also share some good news with people so that they can start to feel confident again and start buying homes. I might be off base on this one, but I think its time to search for some good news in all this negative press, or we will never get buyers out to buy homes.

I am sure we will hear about the Market tanking today by over 200 points, how about the fact that it was at 8000 points a few months ago, I think we need to start seeing the positive in the negative.

My daughters 2nd grade report card had 5 A's and one C should I look at the negative or should I praise her for all her "A"s

Enough with negative press :

How about the fact that interest rates are the lowest they have been in years!!!! thats positive news.

How about the fact that our country DID NOT just go through a devasting earthquake like Hati just did.

We can look for the positive always!

Stop the Negative Press

I dont know about you, but for me this has been a very long week, by Tuesday I was hoping it was Friday. My RE/MAX office moved locations and so its been a bit crazy. What I have noticed this week here In Tampa is that things are going to get better. As you all know we have been hit pretty hard, our prices here have dropped over 25%, my home has lost 30% of its Value in just 18 months! and so yes its been bad. But my fellow Americans I do see a light at the end of the tunnel, I know we all watch the news, "new homes fell by 10%" "existing homes sales fell by 10%" "this is the worst its been in the last 25 years", well you know what, I AGREE, but enough with the bad news, how about some good news! how about the fact that now our median price here in Tampa is $140,000 from the $245,000 a year ago, and now first time buyers and people with lower income can BUY HOMES, how about the fact that homes are starting to move and we are having some closings, how about the fact that my subdvision sold 3 homes in just this past week. I know its bad out there, and I know that people are going through very hard times, I get it! but I think that we should also share some good news with people so that they can start to feel confident again and start buying homes. I might be off base on this one, but I think its time to search for some good news in all this negative press, or we will never get buyers out to buy homes.

Ok, so let me get on the bandwagon of the 75 billion dollars being spent to save our houseing market. Many opponenets to this bill are saying that we are rewarding bad behaivior and that we should not be bailing out people that have been iresponsible and negligent. Well here is my two cents on it for what its worth, while I do agree that there have been a few negligent and careless folks out there, we also have hard working people who for one were taken advantage off by there mortgage broker on these payoption ARMS, number two we have people out there that have lost there jobs not through any fault of there own but because our economy is in crisis right now, number three, we have people that purchased homes on the high end of the Market ( like myself) and then the floor caved in and we lost our value. I could go on and on, folks all these examples plus many more came through no fault of the individula but through the fault of greety brokers, greety banks, and if I must say some greety realtors, now we are all paying the price, and something has to be done about it and I believe our president took a step forward in helping these homeowners. If we can help automakers who for years have been careless, if we can help banks who for years have been greedy, if we can continue to pay CEO's who have been worthless, then come on folks we can aford to help the average Joe who is dying out there.

The Holiday's

All year I have been writing about mortgages, and real estate, and the economy. Well I thought I would change my ways just for this month, it is a special month isn't it? This is the month where we treat each other nicer, where we think about the homeless, where we think about what we did or didnt do this year, its the month where we are more patient with people.

My thoughts are as follow, yes that is all fine and dandy and we should continue to do these thing, actually we should try to do these things all year round instead of waiting for December.

Ok to my thoughts, this year I have read articles and seen actions pass in which people at work places, schools, airports etc. are not being allowed to celebrate Christmas as they want to.

Just becuase it insults some one else or it has to do with religion. Let me ask your opinion, why is this happening, are we now going to change the word Christmas to december 25th is gift day. Lets get something clear here!! this holiday came about for one reason and one reason ONLY, to celebrate the birth of our savior Jesus Christ, hence the word "CHRISTmas". I can continue to ramble on but I think I have made my point, and to end my point of view here is my suggestion

anyone that is against Christmas, calling it christmas, or anyother silly idealogy, lets CANCELL THE HOLIDAY AND MAKE IT only for Christians and people that believe in christ and christmas everyone else get your asses to work, dont ask for time off, and december 25th for you will be just another day!!!

The 'Mark to Market' Accounting Rule:What it is and why it is important to you now!
The financial crisis we are in today was not caused by mortgages or housing, although they were both catalysts. The real reason was an accounting rule called "Mark to Market" (also known as FASB 157).

Few people have a strong grasp of this rule, and even those who do have a tough time explaining it on air due to time restrictions. So let's take a few minutes to break it down, so you can have the inside track on this very important concept and understand why it represents some great opportunities.

Why does 'Mark to Market' exist?

Let's go back to the stock market crash, which occurred between 2000 and 2002. With the S&P down 49% and the NASDAQ down 71%, many people lost much of their life savings and they were very angry.

Companies like Enron and Arthur Andersen were able to find ways to make their books look more attractive, which was reflected in an artificially inflated stock price

Both the public and Congress had a call for more transparency in business and hastened the passage of "Mark to Market" accounting.

This is the notion that all assets should be valued as if they were sold on a daily basis. Under the letter of the law, failure to do this conservatively can now result in jail time.

So what's the problem?

Before we get into what this means for banks, let me make a quick analogy using a scenario that should make perfect sense to you my clients.

Let's imagine that you own a house in a neighborhood where all of the houses are priced at around $300,000. Unfortunately, your neighbor, who owns his home free and clear, falls ill and needs emergency cash quickly. Because he is under duress, he must sell the home for $200,000 in order to get the cash he needs right away, even though the home is worth considerably more.

Now would this mean that your home is now worth the same $200,000 that your neighbor sold his for? Of course not, because you are not forced to sell under duress. It just means that your new neighbor got a great deal.

However, if you were a publicly traded company and had to abide by Mark to Market account rules, you and the rest of your neighbors would now have to say, by law, that your home was worth only $200,000 - not the $300,000 you would get for it if you actually sold. So what's the big deal? Read on.

Let's say we decide to start a bank . . . call it XYZ Bank. We raise $2 Million to open our doors. Remember that our capital account is $2 Million. Banksmake money by taking in deposits and paying low rates of interest to those depositors (maybe throw in a toaster too). We then take that money and make loans with it at higher rates. We keep the difference.

So, we turn the $2 Million worth of deposits into $30 Million worth of loans. This puts our ratio of loans to capital (our Capital Ratio) at 15:1 ($15 Million in Loans to $1 Million in Capital). This level is acceptable, as long as we can shoulder some losses and recover.

Because we are very conservative here at XYZ Bank, the loans we make require a minimum down payment of 30%, a credit score of 800 or better (that's nearly an 850 which is perfect), proof of income and assets, a reserve of at least two years of mortgage payments (normal is two months) and income requirements that only allow 10% of monthly income to cover all expenses (normal is 40%).

We do this and our loans perform perfectly. We make lots of money. Nobody is paying late and our clients are sending us holiday cards. They love us . . . it's a party. You and I are celebrating as we see our stock price soar.

But real estate values decline and, even though all of our loans are paying perfectly, we must re-assess the loan portfolio to account for the decline in real estate values, which leaves us with less of an equity cushion. We had a minimum 30% down payment, which means the loans were 70% of the value of our assets - until we account for the decline in the market. Now, our position goes from 70% to 90%. That's riskier and, therefore, worth less than when our loans had a 70% safety position.

Our accountants tell us that we must "Mark to Market" or risk jail. They say our value is now reduced by $1 Million. Whoa!

We must take or write down this loss against our capital account. It is a paper loss - we don't write a check, we have no late payers, no defaults, no bad business decisions. Still, we must reflect this $1 Million paper loss in our Capital Account, which drops from a $2 Million to $1

does this make sense? more to come , stay tuned

Think the spike in regulation is just a fluke?
Think again. Moves to increase oversight
of financial and housing markets are just the start.
The era of big government is back...big-time.
Look at the bill that Congress just passed
to beef up the Consumer Product Safety Commission.
It gives the agency power to set tough new standards
for everything from toys to fax machines to pajamas.
Next year will see a much broader reg push,
one that gives Washington a far more active role.
Many states are also pressing ahead with new rules.
The shift is a backlash to the Bush years,
when regulators were reined in by the White House.
Democrats will lead the regulatory drive.
They are almost certain to have bigger majorities
in Congress after the Nov. elections (see page 3).
But McCain as well as Obama wants it.
Both see a need to set new standards on energy,
the environment and safety...and to curb excesses.
Obama, however, sees a bigger role for government.

Limits on emissions of carbon dioxide and other gases are a safe bet.
Expect a bill imposing a cap and trade system with pollution limits that are costly
for producers and users of coal, electricity, metals, chemicals, autos and airplanes.
Additional green rules are also likely. The Environmental Protection Agency
will get more staff for both research and enforcement. Democrats say Bush’s aides
squelched or watered down many rules, and they’ll want to take a fresh look at some.
Senate Democrats will demand promises from EPA nominees before confirming them.
Other probable areas: Labor. Democrats will push laws making it easier
for unions to organize. And they’ll insist on more enforcement of wage regulations.
Food and drugs. Recent controversies over unsafe drugs and foods
will lead to a beefed-up Food and Drug Administration. Congress will pass legislation
giving the agency more power to regulate advertising, order recalls and levy fines.
Workplace safety. Some Labor Department agencies will get the go-ahead
to give greater scrutiny to standards in use in several industries, especially mining,
building, chemical plants, oil refineries, food processing, logging and freight yards.
Companies that run afoul of rules can expect fines and even criminal penalties.
Human resources. Democrats, through either legislation or regulations,
will expand the Family and Medical Leave Act to cover adoptions and other events.

And more financial industry regulations are coming. Limits on speculation
in oil markets are possible if prices spike again. Plus increased regulation of banks,
insurance companies and stock markets is likely as a reaction to the credit crunch.
With the economy expected to grow 1.5% this year and next, businesses
and consumers stung by gas prices, real estate and credit woes must wonder:
Where is the growth coming from? Weakness seems to be nearly everywhere.
Exports, federal spending and rebate check shopping are feeding GDP gains.
The weak dollar helped boost exports by a bit more than 9% in the second quarter.
Federal spending...up nearly 7%. Consumer spending...a better than expected 1.5%.
What’s not rising is business spending on new equipment...down 3.4%.
One sweet note for everyone: Inflation is in check. Although energy
and food prices have soared, underlying inflation...measured using GDP figures
and the best available gauge of price pressures in the economy...rose just 2.1%
in the last quarter. That’s close to the Federal Reserve’s long-term goal of 2%.
When the Fed meets next, on Aug. 5, it will keep interest rates steady.
Monthly job losses should taper off into the fall, maybe even reverse,
with tiny monthly gains in employment. For the year...a net loss of 500,000.
Seeds of a recovery lie in easing oil prices, a trend we expect to continue.
By year-end, look for oil prices at about $110 a barrel. Come 2009...
averaging at or near the $100 mark, though there’ll be plenty of ups and downs.
That’ll take close to 40¢ a gallon off gasoline pump prices by late Dec.,
putting the national average at about $3.50. In 2009, we see a further decline
and an average for the year of roughly $3.40, 20¢ less than the average this year.
Figure on paying about 50¢ less for a gallon of diesel by New Year’s.
The 2009 yearly average should run near $4.15 a gallon, 15¢ below this year.
It’ll take longer for users of heating oil to enjoy any downward movement.
Retail customers will have to pony up about $4.50 a gallon by Dec. Next year,
however, the average for the year will be 15¢ a gallon or so lower than in 2008.
Consumers will put the savings into dining out, shopping and home repairs,
while firms will ponder adding workers and investing in new plants and equipment.

There’s no magic in the oil price decline: There are no shortages. And demand is softening.Oil producers are watching anxiously as individualsand firms permanently adopt energy saving measures.Drivers who converted to hybrid cars, for example,won’t return to gas-guzzling SUVs and pickup trucks.The drop in gasoline prices may spur a bit more driving,but not enough to return pump prices to previous peaks.

"OPINION HAS CAUSED MORE TROUBLE ON THIS LITTLE EARTH THAN PLAGUES OR EARTHQUAKES." ~ Voltaire.

Opinions certainly caused some trouble in the markets last week as several Fed members talked about inflation, the arch enemy of Bonds and home loan rates, and their comments shook the markets like a high-magnitude quake.

Last week began with Fed Chairman Ben Bernanke suggesting that the Fed is in no hurry to hike rates because of "slack" in the economy. Bonds traded lower on this news, and this may be because many economists disagree with Bernanke and believe a rate hike would actually help strengthen the US Dollar, drop oil prices closer to $100 per barrel, ease inflation pressure and...as a result, help Bonds and home loan rates improve.

Also chiming in last week was Philadelphia Fed President Charlie Plosser, who said the Fed has to take "appropriate steps to do something about" inflation. His remarks helped fan the flames of volatility for Bonds and home loan rates, adding to the sell off in Bonds and worsening of home loan rates.

There was some good economic news last week, but remember good economic news often causes money to flow from Bonds into Stocks, and when Bonds trade lower, home loan rates rise. And that's exactly what happened when April's Pending Home Sales report (which measures signed real estate contracts for existing single-family homes, condos and co-ops) and May's Retail Sales Report both came in much better than expected.

On Friday, the important read on consumer inflation via the Consumer Price Index (CPI) report delivered a mixed bag. Overall inflation is up 4.2% on a year-over-year basis, which is the highest it's been in awhile. This comes as no surprise, when taking into consideration how much the prices of fuel and food have both risen. But the Core Rate of inflation, which strips out both food and energy, increased at a much more reasonable rate of 2.3%. Since Core CPI is seen by most economists as the best measure of the underlying inflation rate, this was really good news. However, Stocks rallied after former Fed Chairman Alan Greenspan chimed in with his opinion that the worst of the credit crisis is over, and this halted any improvement for Bonds and home loan rates.

After all the reports and opinions, home loan rates ended the week at their worst levels in 4 months. I'll be watching closely this week for any more opinions that could shake up the market!
FRIED GREEN TOMATOES - YES, THEY'RE FINE...BUT BE CAREFUL IF THEY'RE RAW, RED, AND ROUND...AS A RECENT SALMONELLA SCARE IS PLAGUING THE NATION. CHECK OUT THIS WEEK'S VIEW FOR IMPORTANT TIPS AND INFORMATION ON HOW TO PROTECT YOUR FAMILY.





Forecast for the Week

There are several reports due this week that could "plague" the markets and home loan rates. Tuesday will bring the wholesale inflation measuring Producer Price Index, as well as a read on the housing market via the Housing Starts and Building Permits Report.

Also, on Thursday, the Philadelphia Fed Report hits the wires. This monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey, and Delaware is one of the most-watched manufacturing reports, and it will be important to see if concerns about inflation have had an impact.

Remember when Bond prices move higher, home loan rates move lower...and vice versa. The chart below shows how Bond prices moved sharply lower last week on inflation concerns, so stay tuned this week! If inflation continues to shake up the markets, Bond prices and home loan rates could have another troublesome week...but prices are at the same low levels they hit last year before starting to improve. Oftentimes, history repeats itself, and should Bonds receive some friendly economic news, it is likely they will gain back some of the ground recently lost.
Chart: Fannie Mae 6.0%% Mortgage Bond (Friday Jun 13, 2008)

"IN THE SPRING, I HAVE COUNTED 136 DIFFERENT KINDS OF WEATHER. AND THAT WAS JUST INSIDE OF 24 HOURS." Mark Twain. And Bonds have certainly weathered all kinds of days this spring, with this past week being no exception. Bonds did enjoy some high times starting with Monday's move to the upside after National City Corporation announced they would be receiving a $7 Billion cash infusion. This move suggests that investors are seeing value in the battered financial sector, and perhaps are feeling that there is a bottom being reached in the credit crunch.
In other headlines, Existing Home Sales met expectations, but New Home Sales numbers for March were worse than expected, possibly due to the large increase in the costs for materials needed to construct a home. But then there was a change in climate on Friday, as inflation news from around the World created some strong adverse headwinds for Bonds and home loan rates. Overall, home loan rates ended the volatile week unchanged to slightly higher.
Now is still a good time to take advantage of historically low home loan rates before more inflation talk pushes them higher. I'm always here to help advise you, your friends, and your colleagues...no matter the season!
SPRING ISN'T JUST THE SEASON FOR CRAZY WEATHER...IT'S ALSO THE PERFECT TIME FOR SPRING CLEANING. CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME GREAT SPRING CLEANING TIPS AND ADVICE!



Forecast for the Week




After last week's relatively slow economic news calendar, things will heat up this week with several events that have the potential to move the market. On Wednesday, the Fed will announce their interest rate decision...and then the very next day, the Fed's most favored gauge of inflation will be released, the Personal Consumption Expenditure Index (PCE). It will be interesting to play armchair quarterback to the Fed's decision, and watch what the inflation numbers reveal! And let's not forget, on Friday we will see the important Jobs Report, where early estimates are for a net loss of 80,000 jobs.
As you can see in the chart below, Bond prices ended the week between a technical "floor of support" at the 200-day Moving Average and an overhead "ceiling of resistance" at the 50-day Moving Average...and that ceiling might just stop any improvement for Bonds and home loan rates for the short term, unless the news of the week is really Bond-friendly. We'll have to wait and see if the week's upcoming news leads to calm or stormy times ahead.
Chart: Fannie Mae 5.5%% Mortgage Bond (Friday Apr 25, 2008)



The Mortgage Market View...




SPRING HAS SPRUNG...
...and that means it's time to wash away those winter blues! In fact, according to the Soap and Detergent Association - did you even know there was such a thing? - three-quarters of Americans engage in spring-cleaning. In fact, their surveys indicated that more than 80 percent of people who spring clean agree that it helps them save time throughout the year, and 96 percent of people donate or discard items during their spring-cleaning.
But the advantages can go much further than that. Check out these top ten spring-cleaning activities, compiled by http://www.medicinenet.com/, that can help make your home healthier and safer:
Thoroughly dust your home. Also clean any air conditioning and heating filters, ducts, and vents to minimize pollens and other airborne allergens.
Organize your medicine cabinet. Throw away expired medications and old prescription medicines that you no longer need.
Inventory your garage and basement. Get rid of any old paint, thinners, oils, solvents, stains, and other similar items you no longer need. Note: You may need to take these items to a hazardous waste drop off center.
Inventory under your sinks and around your house. Dispose of old or potentially toxic cleaning products.
Have your chimney professionally cleaned. This will help you lessen the chances of carbon monoxide exposure when the cold weather returns.
Clean all mold and mildew from bathrooms and other damp areas. Use non-toxic cleaning products.
Check your rugs. Make sure that rugs on bare floors have non-skid mats and that older or dusty mats are either washed or replaced.
Inspect outdoor playground equipment. Make sure that all elements are sturdy and safe, especially guardrails, protruding bolts, and other potential sources of injury.
Change your batteries. Do so for both smoke detectors and carbon monoxide detectors.
Collect old batteries throughout the house for disposal. Dispose of them in a battery recycling or hazardous waste center.
And make it easy on yourself - take it one room, one cleaning task at a time. You'll be more likely to accomplish more if you tackle each spring-cleaning project separately. And that's great advice...any time of year!

Last Week in Review




"I KNEW THE RECORD WOULD STAND UNTIL IT WAS BROKEN." ~ Yogi Berra A record was broken on the job front last Friday as the Labor Department reported a much worse than expected loss of 80,000 jobs in March - the greatest jobs loss reported in five years. In addition, revisions to both January and February's Jobs Report delivered an additional loss of 67,000 jobs - that's on top of the previously reported loss of 85,000 jobs for that two-month period.
And...the story might be even a bit gloomier than it already appears. The Labor Department uses a lot of averaging to help it come up with its numbers more quickly, but this practice can skew the current picture significantly. Think of it this way - and because it's now baseball season, here's a Baseball analogy - let's say that mid-way through the season, a red-hot hitter with a batting average of 340 declines into a bad slump for several weeks. While he now can't even hit a basketball thrown underhand to him, his average - while lower to 300 - is still very strong due to his previous hot performance. So someone looking at just the statistics may think that this batter is still absolutely terrific, but he is really someone the fans are booing as he approaches the plate. This is not very different from current numbers being reported by the Labor Department - previous averaging is likely causing an understating of the ACTUAL number of job losses...which somewhat masks how bad the job market really is.
This bleak Jobs Report greatly boosts the odds of not only a first-quarter recession, but perhaps a worse economic downturn than many economists fear. The Federal Reserve may respond to this increasing trend in job losses with additional interest rate cuts when they next meet to determine monetary policy on April 30 and June 25. As we've seen in the past though, such rate cuts do not translate into lower long-term rates for mortgages, so there is no better time than right now to refinance an existing mortgage or to structure a new one. Let's work together to make sure your current financing is a home run!

SPEAKING OF HOME RUNS, ARE YOUR CREDIT CARD INTEREST RATES IN THE RIGHT BALLPARK...OR WAY OUT OF SIGHT? CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR TIPS ON MAINTAINING A WINNING CREDIT CARD INTEREST RATE!



Forecast for the Week




Another classic Yogi Berra-ism is, "I never said most of the things I said." Luckily, the Fed can't make the same claim. This coming Tuesday, the "Meeting Minutes" or open commentary of the Fed's last monetary policy meeting will be released to the public. If there are inflammatory comments, the market could respond quickly.
Remember, when Bond prices move higher, home loan rates move lower. And as you can see in the chart below, Bonds have rebounded higher off of their key 50-day moving average support level, and are moving back toward the upper portion of their current trading range. This means if Bond prices continue to move toward the upper boundary of the range, we could see home loan rates improve slightly.
Chart: Fannie Mae 5.5%% Mortgage Bond (Friday Apr 04, 2008)



The Mortgage Market View...




TAKING AN INTEREST IN YOUR CREDIT CARD RATE...
Credit cards are one of the most pervasive forms of your financial picture. On a daily basis, they provide the flexibility and freedom to reserve a hotel room, travel without carrying cash, and purchase just about anything at anytime.
As such, your credit cards can have a major impact on your financial wellbeing and even your credit score. But did you know that your credit score can also impact your credit cards...specifically your interest rates? Although some companies have abandoned the practice, many won't hesitate to raise your interest rate if your credit score declines - even if you are paying them on time! By following these tips, you can help avoid inflated interest rates on your credit cards...and perhaps even enjoy more trips to the ballpark:
Understand the terms. The best way to protect yourself from high interest rates and hikes is to read and understand your credit cards policy terms. Pay particular attention to the interest rate, how long that rate is in effect, and what actions can lead to a hike - such as a late payment on your card, a declining credit score, or even a late payment on a completely unrelated bill.
Don't be late. Making a late payment can lead to increased interest rates on all your cards. In addition, they can lower your credit score, causing you even more problems down the road. So make a schedule and always pay on time.
Watch the mail. We all get junk mail, but some of it may not be junk after all. Whenever you receive any information in the mail from your credit card, read it carefully in case any policies or interest rates are changing.
Make a call. If your rate does change, call the company. If you've made your payments on time consistently, you may be able to get your original rate restored. If the company seems hesitant, you may want to threaten to transfer your balances to another card - customers in good standing may find they have more bargaining power than they realize. And don't just threaten to make a change...actually do it if it makes sense. You may find the grass actually is greener on the other side.
Be careful what you close. Closing a card that has a current balance will likely send your interest rate soaring. In addition, closing your oldest credit cards can have a negative impact on your overall credit score. So make sure you check and double check which cards are best to close.
To find out more about your own credit score - and what you can do to improve it - call me today. You'll be surprised how a few simple steps can make a big difference and can improve your overall financial picture.



The Week's Economic Indicator Calendar




Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.
Economic Calendar for the Week of April 07 – April 11
Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. April 08
02:00
FOMC Minutes
3/18/08



HIGH
Wed. April 09
10:30
Crude Inventories
4/05
NA

7317K
Moderate
Thu. April 10
08:30
Jobless Claims (Initial)
4/05
380K
357K
410K
Moderate
Thu. April 10
08:30
Balance of Trade
Feb
-$57.4B
-$62.3B
$-59.0B
Moderate
Fri. April 11
10:00
Consumer Sentiment Index (UoM)
Apr
69.0
63.2
69.5
Moderate



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