By Hibah Yousuf, staff reporter
December 31, 2009: 9:28 AM ET
NEW YORK (CNNMoney.com) -- The number
of Americans filing first-time claims for
unemployment insurance fell sharply last
week to the lowest level in 17 months, the
government said Thursday. Analysts had
expected an increase.
There were 432,000 initial jobless claims
filed in the week ended Dec. 26, down 22,000
from the previous week's revised 454,000,
the Labor Department said. The figure is the
lowest since July 19, 2008, when there were
413,000 claims filed.
A consensus estimate of economists
surveyed by Briefing.com expected claims to
jump to 460,000.
The 4-week moving average of initial claims
totaled 460,250, down 5,500 from the
previous week's revised average of 465,750.
"It's encouraging to see that we're
continuing to move in the right direction
toward 400,000 claims," said Tim Quinlan,
economic analyst at Wells Fargo. "We're
certainly off the highs we saw earlier this
year.
Jobless claims have been trending downward
since the end of March, when they peaked at
674,000, the highest figure since 1982.
Thursday, December 31, 2009
Wednesday, December 30, 2009
Latest Case-Shiller Housing Report and Its Ramifications: Seeds of a 2010 Crisis?
On a seemingly quiet news and market day just before the New Year’s Holiday, the key news item of December 29th, the Case-Shiller Home Prices index, drew little attention. However, commentary suggests that the data (for October) implies that demand, though only in line with expectations, was pushed forward by government tax credits and is likely to fade when these expire in mid 2010, unless of course it is extended yet again. The options are not tempting:
If the credit expires, housing demand is likely to drop off, especially because much of the prior purchases were simply pushed forward to exploit the temporary tax credit, robbing the market of future demand. Ramifications for jobs, spending would be negative.
However, if the credit is extended, that would be a form of stimulus spending which would pound the already weak USD, which in turn could start a nasty downward spiral and double-dip/ ‘W” shaped “recovery” as it means:
1. Rising Long Term Treasury Yields: A weakening dollar hurts US Treasury bond demand and thus forces rising long term rates needed to peddle the stuff. We’re already seeing this happen.
2. Rising Mortgage Rates: That, in turn, would drive up new mortgage rates. Worse, it would mean that the waves of Adjustable Rate Mortgages due to reset would only go higher in 2010-2011.
3. Rising Default Rates and Declining Real Estate Prices: Mortgage reset rates, already set to rise, would become that much higher, bringing that many more defaults and troubles for the critical banking and housing, sectors. Note that current studies suggest the vast majority of mortgage holders, particularly those with mortgages under 15 years old, have zero or negative equity in their homes due to declining house prices. Add to this witches brew of continued job losses or even just wage stagnation combined with rising mortgage costs, and we get higher default rates, both residential and commercial, as both forced and “strategic” defaults grow (see Jingle Mail: Strategic Mortgage Defaults Could Increase Dramatically in 2010 for more on this).
4. Renewed Housing and Banking Sector Crisis: Rising default rates, already rising, further weaken the already troubled banking and housing sector with asset write downs and further declines in property values as more inventory hits an oversaturated market. Remember, the housing and banking sectors lead us into the crisis, into the current rally, and are essential for any sustained recovery.
5. The Feared “Double Dip Recession”: Further downturns in these sectors would thus likely send stock and other risk asset markets tumbling. Unless there are more bailouts, which in turn hits the USD again…? (Go to item 1 above and repeat).
The other key upshot was the observation in Parsing the Latest Data from S&P/Case-Shiller that the prior housing decline in the 90s lasted about 8 years, and that was against a better economic background filled with the rise of growth fueling technologies like cell phones and the internet. The current housing mess is only a bit over 2 years old, and is against the backdrop of a weaker, more debt laden government and economy. This suggests the housing market--and thus the banks, and thus the economy--is likely to be struggling for years to come.
Hope I’m wrong on this, and the above is far from certain. If nothing else, deeper troubles in the EU and elsewhere could keep up demand for the USD and thus US debt as the USD wins this contest of the least ugly. In forex, all is relative, and the least ugly currency wins just as well as the prettiest one.
Author's Disclosure: No Positions
If the credit expires, housing demand is likely to drop off, especially because much of the prior purchases were simply pushed forward to exploit the temporary tax credit, robbing the market of future demand. Ramifications for jobs, spending would be negative.
However, if the credit is extended, that would be a form of stimulus spending which would pound the already weak USD, which in turn could start a nasty downward spiral and double-dip/ ‘W” shaped “recovery” as it means:
1. Rising Long Term Treasury Yields: A weakening dollar hurts US Treasury bond demand and thus forces rising long term rates needed to peddle the stuff. We’re already seeing this happen.
2. Rising Mortgage Rates: That, in turn, would drive up new mortgage rates. Worse, it would mean that the waves of Adjustable Rate Mortgages due to reset would only go higher in 2010-2011.
3. Rising Default Rates and Declining Real Estate Prices: Mortgage reset rates, already set to rise, would become that much higher, bringing that many more defaults and troubles for the critical banking and housing, sectors. Note that current studies suggest the vast majority of mortgage holders, particularly those with mortgages under 15 years old, have zero or negative equity in their homes due to declining house prices. Add to this witches brew of continued job losses or even just wage stagnation combined with rising mortgage costs, and we get higher default rates, both residential and commercial, as both forced and “strategic” defaults grow (see Jingle Mail: Strategic Mortgage Defaults Could Increase Dramatically in 2010 for more on this).
4. Renewed Housing and Banking Sector Crisis: Rising default rates, already rising, further weaken the already troubled banking and housing sector with asset write downs and further declines in property values as more inventory hits an oversaturated market. Remember, the housing and banking sectors lead us into the crisis, into the current rally, and are essential for any sustained recovery.
5. The Feared “Double Dip Recession”: Further downturns in these sectors would thus likely send stock and other risk asset markets tumbling. Unless there are more bailouts, which in turn hits the USD again…? (Go to item 1 above and repeat).
The other key upshot was the observation in Parsing the Latest Data from S&P/Case-Shiller that the prior housing decline in the 90s lasted about 8 years, and that was against a better economic background filled with the rise of growth fueling technologies like cell phones and the internet. The current housing mess is only a bit over 2 years old, and is against the backdrop of a weaker, more debt laden government and economy. This suggests the housing market--and thus the banks, and thus the economy--is likely to be struggling for years to come.
Hope I’m wrong on this, and the above is far from certain. If nothing else, deeper troubles in the EU and elsewhere could keep up demand for the USD and thus US debt as the USD wins this contest of the least ugly. In forex, all is relative, and the least ugly currency wins just as well as the prettiest one.
Author's Disclosure: No Positions
Wednesday, December 23, 2009
Statewide, November sales increased 36.5%
Press Release
(INDIANAPOLIS, IN) – The Indiana Association of REALTORS (IAR) today released its “Indiana Real Estate Markets Report” for the month of November as a continuation of its “Indiana is Home” project.
The Report, found online at www.IndianaIsHome.com, is the first-ever county-by-county comparison of existing single-family home sales in Indiana. IAR obtains the data directly from the state’s 23 largest Multiple Listing Services (MLSs) and the Broker Listing Cooperative (BLC) in central Indiana. To date, the Report represents 98% of the housing market statewide.
Statewide, November sales increased 36.5% from the same month last year; median prices saw an increase of 10.5%. This is the second consecutive month that there has been an increase in sales over the previous year.
“The numbers that we have seen from November, as well as October, are welcomed news as we approach the end of the year,” said Karl Berron, Chief Executive Officer. “It remains the fact that homes continue to be affordable to Hoosier families. And while the recent jump in numbers can be linked to the impact of the $8,000 first-time homebuyer tax credit, it’s important to recognize that Indiana’s housing markets are continuing to make a turnaround after a very tough year.
“The increase in sales combined with other housing statistics, including increases in new construction, are important steps forward for our state’s and country’s economic recovery,” Berron added.
More about “Indiana Is Home”
It is a multi-media project hosted by media professional Pat Carlini and aimed at keeping Hoosier homeowners, would-be homeowners, policymakers and the media well-informed on the ever-changing local real estate markets.
This month, Carlini narrates a video explaining the extension and expansion of the $8,000 first-time homebuyer tax credit.
Indianapolis-based Boost Media and Entertainment shot and produced all videos found at www.IndianaIsHome.com.
IAR represents more than 16,000 REALTORS® who are involved in virtually all aspects related to the sale, purchase, exchange or lease of real property in Indiana. The term REALTOR® is a registered mark that identifies a real estate professional who is a member of the world’s largest trade association, the National Association of REALTORS®, and subscribes to its strict Code of Ethics.
Source: Indiana Association of Realtors
(INDIANAPOLIS, IN) – The Indiana Association of REALTORS (IAR) today released its “Indiana Real Estate Markets Report” for the month of November as a continuation of its “Indiana is Home” project.
The Report, found online at www.IndianaIsHome.com, is the first-ever county-by-county comparison of existing single-family home sales in Indiana. IAR obtains the data directly from the state’s 23 largest Multiple Listing Services (MLSs) and the Broker Listing Cooperative (BLC) in central Indiana. To date, the Report represents 98% of the housing market statewide.
Statewide, November sales increased 36.5% from the same month last year; median prices saw an increase of 10.5%. This is the second consecutive month that there has been an increase in sales over the previous year.
“The numbers that we have seen from November, as well as October, are welcomed news as we approach the end of the year,” said Karl Berron, Chief Executive Officer. “It remains the fact that homes continue to be affordable to Hoosier families. And while the recent jump in numbers can be linked to the impact of the $8,000 first-time homebuyer tax credit, it’s important to recognize that Indiana’s housing markets are continuing to make a turnaround after a very tough year.
“The increase in sales combined with other housing statistics, including increases in new construction, are important steps forward for our state’s and country’s economic recovery,” Berron added.
More about “Indiana Is Home”
It is a multi-media project hosted by media professional Pat Carlini and aimed at keeping Hoosier homeowners, would-be homeowners, policymakers and the media well-informed on the ever-changing local real estate markets.
This month, Carlini narrates a video explaining the extension and expansion of the $8,000 first-time homebuyer tax credit.
Indianapolis-based Boost Media and Entertainment shot and produced all videos found at www.IndianaIsHome.com.
IAR represents more than 16,000 REALTORS® who are involved in virtually all aspects related to the sale, purchase, exchange or lease of real property in Indiana. The term REALTOR® is a registered mark that identifies a real estate professional who is a member of the world’s largest trade association, the National Association of REALTORS®, and subscribes to its strict Code of Ethics.
Source: Indiana Association of Realtors
Tuesday, December 15, 2009
Mortgage Rates Rise for First Time in Five Weeks
DECEMBER 11, 2009 After five weeks of declines
By AMY HOAK
After five weeks of declines, rates on most mortgages moved higher this week, following long-term bond yields that rose after an upbeat employment report, Freddie Mac's chief economist said Thursday.
The 30-year fixed-rate mortgage averaged 4.81% for the week ended Dec. 10, up from last week's 4.71% average, according to Freddie Mac's weekly survey of conforming mortgage rates. The mortgage averaged 5.47% a year ago.
Fifteen-year fixed-rate mortgages averaged 4.32%, up from 4.27% last week. They averaged 5.20% a year ago. And 5-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.26%, up from their 4.19% average last week. The ARM averaged 5.82% a year ago. But average rates on 1-year Treasury-indexed ARMs dropped slightly this week. The ARM averaged 4.24%, down from 4.25% last week and 5.09% a year ago.
"Following an upbeat employment report, long-term bond yields rose slightly and fixed mortgage rates followed," said Frank Nothaft, Freddie Mac chief economist. "The economy shed only 11,000 jobs in November, far fewer than the market consensus forecast, and the unemployment rate unexpectedly fell to 10%. In addition, revisions added 159,000 jobs to September and October."
Still, mortgage rates remain low compared with the same time a year ago, he said. "Notwithstanding, rates on 30-year fixed mortgages are almost 0.7 percentage points below those at the same time last year. This translates into an $81 lower monthly payment on a $200,000 conventional mortgage," he said.
Mortgage application volume was up a seasonally adjusted 8.5% for the week ending Dec. 4, compared with the previous week, the Mortgage Bankers Association reported on Wednesday. The weekly MBA survey also reported that rates on fixed-rate mortgages were on the rise.
By AMY HOAK
After five weeks of declines, rates on most mortgages moved higher this week, following long-term bond yields that rose after an upbeat employment report, Freddie Mac's chief economist said Thursday.
The 30-year fixed-rate mortgage averaged 4.81% for the week ended Dec. 10, up from last week's 4.71% average, according to Freddie Mac's weekly survey of conforming mortgage rates. The mortgage averaged 5.47% a year ago.
Fifteen-year fixed-rate mortgages averaged 4.32%, up from 4.27% last week. They averaged 5.20% a year ago. And 5-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.26%, up from their 4.19% average last week. The ARM averaged 5.82% a year ago. But average rates on 1-year Treasury-indexed ARMs dropped slightly this week. The ARM averaged 4.24%, down from 4.25% last week and 5.09% a year ago.
"Following an upbeat employment report, long-term bond yields rose slightly and fixed mortgage rates followed," said Frank Nothaft, Freddie Mac chief economist. "The economy shed only 11,000 jobs in November, far fewer than the market consensus forecast, and the unemployment rate unexpectedly fell to 10%. In addition, revisions added 159,000 jobs to September and October."
Still, mortgage rates remain low compared with the same time a year ago, he said. "Notwithstanding, rates on 30-year fixed mortgages are almost 0.7 percentage points below those at the same time last year. This translates into an $81 lower monthly payment on a $200,000 conventional mortgage," he said.
Mortgage application volume was up a seasonally adjusted 8.5% for the week ending Dec. 4, compared with the previous week, the Mortgage Bankers Association reported on Wednesday. The weekly MBA survey also reported that rates on fixed-rate mortgages were on the rise.
Subscribe to:
Posts (Atom)
