Chico Market Snap
Mortgage bond prices fell last week pushing mortgage interest rates higher. The global economic turmoil continued with concerns about instability on the Korean peninsula. The Spanish government took over a regional bank, which added to the fray of an already battered Euro. The Chinese indicated they would not liquidate Euro bond holdings, which was a concern. Stocks continued to bounce up and down, as one hundred point swings were often the norm. Rates rose by about 1/2 of a discount point for the week.
The employment report Friday will be the most important event this week. The bond market will be closed Monday for Memorial Day. Mortgage interest rates may be volatile Tuesday as trading resumes following the extended holiday weekend. Look for continued choppy trading amid global economic instability.
LOOKING AHEAD
| Economic Indicator |
Release Date and Time |
Consensus Estimate |
Analysis |
| Construction Spending | Tuesday, June 1, 10:00 am, et |
Up 0.1% | Low importance. An indication of economic strength. A significant decrease may lead to lower rates. |
| ISM Index | Tuesday, June 1, 10:00 am, et |
58.9 | Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
| ADP Employment | Wednesday, June 3, 8:30 am, et |
Up 50k | Important. An indication of employment. Weakness in payrolls may bring lower rates. |
| Revised Q1 Productivity | Wednesday, June 3, 8:30 am, et |
Up 3.6% | Important. A measure of output per hour. Improvement may lead to lower mortgage rates. |
| Weekly Jobless Claims | Thursday, June 4, 8:30 am, et |
455k | Moderately Important. A measure of unemployment. Higher claims may bring lower rates. |
| Factory Orders | Thursday, June 4, 10:00 am, et |
Up 1.1% | Important. A measure of manufacturing sector strength. A larger decrease may lead to lower rates. |
| Employment | Friday, June 5, 8:30 am, et |
Unemp. @ 9.8%, Payrolls +500k |
Very important. An increase in unemployment or weakness in payrolls may bring lower rates. |
ADP EMPLOYMENT
The ADP employment report is a measure of employment derived from data of roughly 500,000 US businesses. The survey focuses on the private sector of the economy. In contrast, the Bureau of Labor Statistics releases the regular employment report which includes both private and government employment statistics.
The ADP employment report has gained more prominence lately in that it is delivered prior to the Friday employment report. This gives analysts an improved forecast heading into the payrolls component of the employment report later in the week.
The Fed is usually focused on keeping inflation in check. Tightening employment conditions can result in wage inflation. The ADP report provides solid data on these conditions. Despite this, the data still can diverge from the regular employment report. The employment report is derived from a household survey and an establishment survey. These surveys often differ from one another and from the ADP employment report in that they are based on different data sets. There are no guarantees that the most important employment report the first Friday of each month will mirror the ADP report released 2 days prior. With this in mind floating into the data is always very risky. Now is a great time to take advantage of mortgage interest rates at these historically low levels to avoid future market volatility.
RATE LINK is provided by Market Information for Mortgage Professionals. 1-800-938-5193. Copyright 2010. All Rights Reserved. Mortgage Market Information Services, Inc. The information contained herein is believed to be accurate, however no representation or warranties are written or implied.
Have you heard? The Tony Symmes and Aspire Homes Scandal?
I was shocked when I read and watched this story unfold. However, not that shocked. When almost every home in the McKinney Ranch subdivision is either a short sale or a foreclosure, that usually triggers something? I always wondered what exactly happened? Well, now we know. People were taken advantage of, in order for another greedy person to make more money. That nice couple on TV that said they didn’t realize they paid 60K over? They said they paid $400K? Have you seen the prices there? They are selling in the $200K? That is over $200k? This is simply disgusting and he should pay every homeowner that still has there home the difference! I have to say, this is a clear example of why everyone must use a realtor. The builder would not have been able to get away with it!
Happy Memorial Weekend
I hope you all have a safe and happy holiday!
Midyear Conference in Washington D.C.
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Last week, thousands of your fellow REALTORS® traveled to Washington, D.C., to meet with industry leaders and members of Congress on key issues facing our industry and our businesses. I encourage you all to check out the following highlights from the meetings: Real Estate Summit – NAR hosted a three-day summit focused on Stabilizing the U.S. Mortgage Finance Delivery System. Watch videos of featured speakers, including FHA Commissioner Dave Stevens; political experts Ed Gillespie and Terry McAuliffe, financial expert Ron Insana, and economist Diane C. Swonk. http://www.realtor.org/meetings_and_expo/real_estate_summit http://www.realtor.org/about_nar/realtors_property_resource 2010 Member Profile – NAR also released a new Member Profile, which shows how the face of real estate is changing. As part of the Right Tools, Right Now initiative, you can download it for free at: http://www.realtor.org/prodser.nsf/products/E186-12-10?OpenDocument Call for Action – On Sunday, we called on all REALTORS® to fight new tax burdens on real estate. I urge you all to go to the REALTOR® Action Center today, send a letter to your member of Congress, and join the REALTOR® Party. http://www.realtoractioncenter.com To see what your fellow REALTORS® had to say about the meetings, visit the Midyear Live blog: http://live.blogs.realtor.org/ |
WCR Wine Tasting Event
Mark your calendars for June 12th from 4-8pm! This event is taking place on Spyglass email me or get your tickets on eventbrite. There will be 5 California Wineries here in Chico to let us taste their new creations. There will also be food and raffles as well. Kick off your summer with a great night filled with wine, food, and friends! Hope to see you there!