Here in Incline Village we continue to see record visitors over the holidays. It is a very good financial environment to be in Lake Tahoe Real Estate right now.  Look at these interest rates!!  Happy New Year.

 

Tim Lampe, your Incline Village Realtor by choice for 29 years!!!

January 4, 2011

 

KEY ECONOMIC INDICATORS

 

Gold $1384.90/ounce [down]

Crude Oil(Brent) $93.00/brl [down]

U.S. Dollar to…

    Euro .7465 [down]

    Japanese Yen 81.95 [down] 

6-mo Treasury Bill Yield 0.17%

10-yr Treasury Note Yield 3.30%

[6-month down 2 bps, 10-yr down 15 bps]

11th Dist Cost of Funds 1.571%[-]

30-yr Fixed-rate Mortgage 5.19%

15-yr Fixed-rate Mortgage 4.56%

1-yr ARM 3.84%

[HSH averages rates: 30-yr

up 4 bps;15-yr up 5 bps; 1-yr ARM up 7 bps]

 

Mortgage Bankers Association Mortgage Applications Index

week ending Next report due January 6—this report from 12/17:

  Overall

    Down 18.6%; down 2.3%

the week prior

  Purchase Money Loans

    Down 2.5%; down 5%

            the week prior

  Refinancing Loans

    Down 24.6%; down 0.7%

the week prior

 

Jobless Claims 1/2

    422,000 – prior week 420,000 – a 17-month low

 

Construction Spending Nov

    Down 0.6% - Down 13.6% year-over-year

 

ISM Mfg. Index Dec

    Up from 54.8 to 55.9 – new orders category especially strong

 

Weekly Commentary

 

As you very likely noticed, the strong jump in the Pending Home Sales Index for October (10.1% month-to-month, ending a disappointing string of declines) provided a fairly credible confirmation of the October gains. November’s pending sales rose by 3.5%.

 

The larger number of newly-signed home purchase contracts in October and November should mean larger existing-home sales figures, as the contracted sales reach their closings. To be sure, though, we should keep a close watch on some related data.

 

First, the MBA Mortgage Applications Index—which this week will include figures for both the prior week and the week before that—should see significantly better purchase money loan applications. So far, the larger number of purchase contracts doesn’t seem to have translated into a greater number of loan applications with which to fulfill those contracts. (The mortgage applications data will be released Wednesday afternoon, and can be found with other major indicators in the ‘Economic Calendar’ of Bloomberg.com.)

 

The weekly jobless claims report, to be released Thursday, should also prove important. The number of out-of-work Americans seeking unemployment insurance plunged by 22,000 in the most recent reading (for the week ending December 30)…to an eventually revised 422,000.

 

Better job growth—and the resulting lower unemployment—are crucial to a recovery in real estate. Without these, potential homebuyers tend to remain on the sidelines, worried that their own finances aren’t secure enough for them to feel confident about buying a home. With job growth and lower unemployment—and, equally important, with a growing PERCEPTION of improvement in the jobs market—pent-up demand for residential real estate will most likely begin to express itself more strongly as buyers gain enough confidence to make as large a purchase as a home.

 

The December employment report, very likely the most crucial piece of this puzzle as far as public perception goes, will be released Friday and scrutinized carefully during the days that follow. If the Pending Home Sales Index is correct, it should be corroborated by jobs data that is at least somewhat better than that in the last report.

 

What we face in this week of crucial reports, therefore, may prove to be a fairly strong affirmation of improvement in the jobs—and thus in the real estate—market. If not, we face even deeper confusion about economic indicators that refuse to align with one another. We are hoping for the former. It would start this year well.