Pat Hill Realtor

Housing Market Week of June 15, 2009

>> Home Base

INFO THAT HITS US WHERE WE LIVE We got the news last week that May foreclosure filings were down 6% from April. This was the first month-on-month decline since January. On top of that, the drop would have been larger except for increases in just a few states. It's important to note that the bulk of foreclosures are concentrated. If you take out the four states with the highest number of foreclosures, the remaining 46 states had only 1% of mortgages in foreclosure, according to the Mortgage Bankers Association. Also remember that not all homes with foreclosure-related filings wind up owned by the lenders. Many homeowners are able to refinance their loans or negotiate a loan modification or short sale. Finally, Sen. Johnny Isakson (R-GA) last week introduced a bill to raise the homebuyer tax credit to $15,000 and make it available to everyone purchasing a primary residence, with no income ceilings. S.1230 would sure help the housing market, but it's a long way from being passed by both Houses and signed by the President. Meanwhile, first-time buyers should note they have less than six months to take advantage of the current $8,000 tax credit, which expires December 1.

>> Review of Last Week

THE DOW'S UP FOR THE YEAR!... It was a mild trading week, but when all was said and done, the Dow Jones Industrial Average ended ahead for 2009, the first time it's been in the black since January. The S&P 500 and the Nasdaq were also up for the week and in positive territory for the year. There was little bad news except for the Balance of Trade, which increased for the second month in a row. Exports are at their lowest level in three years, but economists expect an improvement, the dollar's drop making our goods a nice deal for foreigners. The good news ranged wide. The US Treasury said 10 big banks would start repaying the TARP money they got last fall under the Troubled Asset Relief Program. Great news for taxpayers. In addition, all 19 of the big banks given Treasury "stress tests" now have plans for capital to meet the worst test "scenarios." There's certainly been a major shift in the financial climate from when many feared one or two big banks might fail or need to be nationalized! Thursday, Retail Sales came in UP 0.5% for May, with the increase in auto sales showing bankruptcy is good for business if you're Chrysler or GM. Friday, May's University of Michigan Consumer Sentiment Index reached its highest reading in 9 months. New unemployment claims fell for another week to their lowest level in five months. And March and April figures were revised adding 82,000 more jobs. The Dow ended UP 0.4% for the week, to 8799.26; the S&P 500 gained 0.7%, to 946.21; and the Nasdaq was UP 0.5%, to 1858.80. The bond market saw another week of mixed moves. The FNMA 30-year 4.5% bond we're now tracking ended at $98.28, up 81bp for the day. Mortgage interest rates have inched up enough to slow refinancings, but they're still at historically low levels for purchasers, whose applications are UP THREE WEEKS IN A ROW!

>> This Week’s Forecast WHAT'S GOING UP?... We'll find out about new homes going up, with this week's Housing Starts and Building Permits. We'll also see if producer prices are going up, with the PPI, and consumer prices, with the CPI. These numbers could indicate if rates may go up at the Fed meeting next week. Finally, the LEI on Thursday will be looked at for more signs the overall economy is going up.

Published Monday, June 15, 2009 8:18 PM by Pat Hill