June 1,
2010
The Housing Market
Update

Academy Mortgage

Brought
to you by:


Scott
Smith

Certified
Mortgage Specialist

Office:
801-233-3700
Cell:
801-209-3850
sbsmith@academy.cc

1218 E 7800 S

Sandy, UT
84094
www.academymortgage.com

New Home Sales
at 2-Year High:

The Commerce
Department reported that sales of newly built homes rose
much faster than expected in April, rising to their
highest levels in nearly two years.  Sales jumped
14.8 percent (month-over-month) to an annualized rate of
504,000 units in April.  This is the highest rate
since May of 2008.

The year-over-year increase
was in excess of 22 percent.  Certainly,
the rush to sign a contract prior to the tax credit
expiring has had an impact.  But there is
something else that it less temporary that is also
having an impact.  Consistently low 30 year fixed
rates, an increase in consumer confidence, and a rise in
non-farm payrolls are helping to fuel demand for
housing.  And unlike the tax credit, these items
will not expire but continue to move upward.

The
report also showed that inventories of new homes for
sale fell a record seven percent to 211,000 units in
April.  That is the lowest level of inventories
since October 1968!  Lower inventories will
eventually lead to further price
stabilization.

Consumer
Sentiment Rises:

The Thomson
Reuters/University of Michigan’s report showed that
consumer sentiment rose again in May.  The final
May reading on the overall index was 73.6, up from
April’s reading of 72.2.

Consumer Spending drives
70 percent of our economy, so an increase in consumer
sentiment readings could be good for economic growth in
the near-term.  Also, both consumer sentiment and
consumer confidence are significant drivers for housing
demand.  Simply put, consumers are more likely to
purchase a home if they feel more confident about their
own financial outlook.

What
Happened to Rates Last Week:

Mortgage backed securities (MBS) lost
-69 basis points last week which caused 30 year
fixed rates to increase for both government
and conventional loans.  The prior week, they were
at their best levels of 2010.  MBS
pricing decreased (which causes mortgage rates
to go up) due primarily to a rebound in the stock
markets which pulled some money way from bonds.  We
also saw some strong economic data such as the Chicago
PMI, Consumer Sentiment and Initial Jobless
Claims.  As the economy shows sign of expansion, it
takes a toll on long bonds such as mortgage backed
securities.  However, mortgage rates remained at
fantastic levels.

What
to Watch Out For This Week:

The following are
the major economic reports that will hit the market this
week.  They each have the ability to affect the
pricing of Mortgage Backed Securities and therefore,
interest rates for Government and Conventional
mortgages.  I will be watching these reports
closely for you and let you know if there are any big
surprises:

Date ET Release For
1-Jun 10:00 Construction
Spending
Apr
1-Jun 10:00 ISM
Index
May
2-Jun 10:00 Pending
Home Sales
Apr
2-Jun 10:30 Crude
Inventories
29-May
2-Jun 14:00 Auto
Sales
May
2-Jun 14:00 Truck
Sales
May
3-Jun 8:15 ADP
Employment Change
May
3-Jun 8:30 Productivity-Rev. Q1
3-Jun 8:30 Unit
Labor Costs
Q1
3-Jun 8:30 Initial
Claims
29-May
3-Jun 8:30 Continuing
Claims
29-May
3-Jun 10:00 Factory
Orders
Apr
3-Jun 10:00 ISM
Services
May
4-Jun 8:30 Nonfarm
Payrolls
May
4-Jun 8:30 Unemployment
Rate
May
4-Jun 8:30 Hourly
Earnings
May
4-Jun 8:30 Average
Workweek
May

It
is virtually impossible for you to keep track of what is
going on with the economy and other events that can
impact the housing and mortgage markets.  Just
leave it to me, I monitor the live trading of Mortgage
Backed Securities which are the only thing government
and conventional mortgage rates are based upon. 

 

Academy Mortgage
1218 E
7800 S, Sandy UT, 84094
Phone: 801-233-3700
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