Bellevue Real Estate, Mortgage, and Economy 8/8/11
Posted on 08 August 2011
Here is the Bellevue Real Estate Report for August 8, 2011:
INFO THAT HITS US WHERE WE LIVE…Last week’s silver lining for housing came in the form of mortgage rates, pushed lower by the cloud of financial market turmoil. The average 30-year fixed rate stayed near historic lows, while the average 15-year fixed rate hit a new low for records back to 1991. The average rate for 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) also made a new low for records since 2005. The Mortgage Bankers Association (MBA) reported purchase loan applications UP 5.1% over the week before and UP 5.9% over a year ago.
But buyers shouldn’t be complacent. The latest MBA forecast says rates on 30-year fixed-rate mortgages could rise the last three months of this year and continue to go up next year. Freddie Mac’s Chief Economist sees the housing market “firming,” citing CoreLogic’s National House Price Index, up three months in a row. Another study showed the number of homes listed for sale in Q2 at its lowest level since 2007. Home values also fell at a slower pace in Q2 and 19 markets showed quarterly gains!
THUD!…You can’t sugar coat last week’s stock market performance, the worst drop in over two years. You also can’t come up with a consistent explanation for why investors were so intent on selling. Congress and the President reached an agreement to raise the debt ceiling and it did have something for everyone. Government spending will still rise this year and continue for the next 10. Yet government size will also shrink, as federal spending is slated to drop by about 2% of GDP in the next 10 years. Some worried the U.S. would lose its AAA credit rating, which finally happened Friday night, but others think that will actually help Washington get fiscally serious.
Bearish Wall Streeters fretted about recession, with lower than expected ISM Manufacturing and Services readings. But these were still both above 50, indicating expansion, 24 months in a row for manufacturing. Personal Income also grew less than expected in June and Personal Consumption dipped a smidge. But in the past year income is UP 5% and spending UP 4.4%. The recessionistas were silenced by Friday’s July Employment report — 117,000 new jobs, plus May/June revisions adding 56,000, for a net gain of 173,000. The one bummer is still Europe. Italy says it’s not about to default but investors acted like it might.
For the week, the Dow ended down 5.8%, to 11445; the S&P 500 was down 7.2%, to 1199; and the Nasdaq was down 8.1%, to 2532.
Bellevue Real Estate Report
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