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Julie Whalen Julie WhalenSenior Mortgage Consultant

7951 E. Maplewood Avenue, Suite 350

Greenwood Village, CO 80111

Phone: (720) 746-4065

Mobile: (303) 881-9332

Fax: (720) 438-4712


Guild Mortgage Company

For the week of October 29, 2012 – Vol. 10, Issue 44

Market Update 


QUOTE OF THE WEEK… “Action may not always bring happiness;
but there is no happiness without action.”

–Benjamin Disraeli, British politician



The rest of the economy may be
barely moving forward, but there’s clearly some action in the housing market. New single-family home sales were up 5.7% for September and up 27.1% over a year ago. The seasonally adjusted annual rate of 389,000 units is the strongest sales pace since April 2010. The median sales price was $242,400, up almost 12% versus a year ago. 145,000 new homes were on the market, a 4.5 months’ supply at the current sales rate, down from a record 12.1 months in January 2009. 


Following this news, the National Association of Realtors (NAR) Pending Home Sales index was up 0.3% in September after a 2.3% August decline. This measure of contracts signed on existing homes is up 14.5% over a year ago, posting the
17th month in a row of annual gains.
The NAR’s chief economist feels that this steady year-over-year increase “is pointing in the right direction.” The FHFA index of prices for homes financed with conforming mortgages was up 0.7% in August, up 4.8% from a year ago, and up at an 8.9% annual rate the last 6 months.


Successful people are optimists, always seeing the cup half full. They keep a positive
attitude and believe in their ability to achieve their goals.


Review of Last Week: OOPS, THEY DID IT AGAIN!…


“They” are corporations reporting Q3 earnings. And just like the week before, those earnings on the whole failed to impress investors, who sent all three stock indexes down. With solid companies reporting basically negative revenue growth, Wall Street interpreted that as an indicator the global economy is slowing down. For the U.S. economy, the first estimate of Q3 GDP growth came in at a very modest 2.0% annual rate. The Fed policy statement added, “growth in employment has been slow, and the unemployment rate remains elevated.”


Durable goods orders headed up 9.9% in September, bouncing back after their steep drop in August. But the Richmond Fed index, tracking mid-Atlantic manufacturers, dropped to –7 in October from +4 the prior month. Manufacturing reports have been mixed, reflecting halting growth in that sector. Initial jobless claims for the
week came in at 369,000, down from the week before, but still a long way
from the recovery economists are looking for.
The week ended with Michigan Consumer Sentiment for October up from the month before.


For the week, the Dow ended down 1.8%, to 13107; the S&P 500 was down 1.5%, to 1412; and the Nasdaq was down 0.6%, to 2988. 

When stocks are under pressure, bond prices usually take off, but this week they were little changed. The FNMA 3.5% bond we watch ended the week up .04 at $106.12. Freddie Mac’s Primary Mortgage Market Survey showed national average mortgage rates edging up during the week, but still near historic lows. Purchase loan demand was down slightly, but still up 7% from a year ago.


DID YOU KNOW?… There were 38,000 completed new homes for sale in
September. This was the lowest level for that stat since the Census Bureau started tra
cking it in 1973.


This Week’s Forecast


INFLATION, MANUFACTURING, OCTOBER JOBSThe Fed’s favorite inflation measure, Core PCE Prices, leads off the week. It excludes food and energy and is expected to remain within the central bank’s guidelines. The Chicago PMI is forecast
to come in just above 50 for the Midwest, the same as the overall ISM Index, indicating a slight expansion in manufacturing activity.


The October Employment Report caps off the week. Nonfarm payrolls are
predicted not much higher than last month’s, at 125,000. The unemployment rate is expected to inch back up to 7.9%, well above the level needed for a jobs recovery.


>> 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 Oct 29 – Nov 2

 Date Time
Release For Consensus Prior Impact
Oct 29 08:30 Personal Income Sep 0.6% 0.1% Moderate
Oct 29 08:30 Personal Spending Sep 0.4% 0.5% HIGH
MOct 29 08:30 PCE Prices – Core Sep 0.1% 0.1% HIGH
Tu Oct 30 10:00 Consumer Confidence Oct 72.5 70.3 Moderate
Oct 31 08:30 Employment Cost Index Q3 0.5% 0.5% HIGH
Oct 31 09:45 Chicago PMI Oct 50.4 49.7 HIGH
Oct 31 10:30 Crude Inventories 10/27 NA 5.896M Moderate
Th Nov 1 08:30 Initial Unemployment Claims 10/27 375K 369K Moderate
Th Nov 1 08:30 Continuing Unemployment Claims 10/20 3.249M 3.254M Moderate
Th Nov 1 08:30 Productivity – Prelim. Q3 1.6% 2.2% Moderate
Th Nov 1 10:00 ISM Manufacturing Index Oct 51.0 51.5 HIGH
Nov 2 08:30 Average Workweek Oct 34.5 34.5 HIGH
Nov 2 08:30 Hourly Earnings Oct 0.2% 0.3% HIGH
Nov 2 08:30 Nonfarm Payrolls Oct 125K 114K HIGH
Nov 2 08:30 Unemployment Rate Oct 7.9% 7.8% HI


>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months… At last week’s meeting, the Fed did not touch the Funds Rate and confirmed they want to keep it at rock bottom until mid-2015. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.


Current Fed Funds Rate: 0%–0.25%

FOMC meeting on:
Dec 12 0%–0.25%
Jan 30 0%–0.25%
Mar 20 0%–0.25%

Probability of change from current policy:

FOMC meeting on:
Dec 12
Jan 30
Mar 20


This e-mail is an advertisement for Julie Whalen.
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 the newsletter is the property of Guild Mortgage Company and cannot be reproduced for any use without prior
written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer
distribution. The material does not represent the opinion of Guild Mortgage Company.
This information is subject to change without notice. NMLS Company ID: 3274; Branch ID #192748; Arizona BR# 0115590; Arizona BK# 0018883; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act, license #813F656. WY license # 2298; This branch is licensed to do business in Wyoming, Arizona, California, Colorado and New Mexico. Regulated by the Colorado Division of Real Estate. CO-LO Lic#LMB100018008; status: in Colorado.


Equal Housing Lender


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