Mortgage Times

[Adam in CO]

Mortgage Market News for the week ending April 25, 2008

Events This Week:

Durable Orders Up
Jobless Claims Fell
Existing Sales Down
Manufacturing Mixed

Events Next Week:

Wed 4/30
FOMC Meeting
GDP
Chicago PMI

Thurs 5/1
Core PCE
ISM Manufacturing

Fri 5/2
Employment

Looking Ahead to the Fed

With little scheduled economic news and a couple of major events on the horizon, there was little change in mortgage markets during the week. The daily volatility remained high, however. Mortgage rates ended a little higher than the prior week, and the stock market was almost flat. Investors were mostly preparing for next week's Fed meeting and Employment data.

Investor sentiment for future Fed actions has shifted significantly over the last couple of weeks. Just weeks ago, investors were expecting an additional three quarters of a point of Fed rate cuts over the next two meetings. Now many believe that the Fed will cut rates by only one quarter point at Wednesday's meeting and then will hold rates steady. The thinking is that the Fed will pause to consider the effects on the economy of prior rate cuts, other expansionary monetary policies, and fiscal stimulus packages (such as the tax rebates). With energy prices at record levels and the dollar at historic lows, the Fed wants to balance the risk of slower economic growth with the need to prevent higher future inflation. This path could be good for mortgage markets, as higher inflation would generally lead to higher mortgage rates.

In the housing sector, the market for existing home sales showed additional signs of stabilizing, while new home sales displayed weakness. Matching expectations, March Existing Home Sales fell a little from February. Median home prices fell 8% from one year ago, while inventories of unsold homes rose slightly. March New Home Sales fell 9% from February. The chief economist of the National Association of Realtors (NAR) suggested that housing market conditions varied greatly in different regions of the country. The NAR predicted that housing market activity will be flat for a few more months and then will pick up during the second half of the year.

• Also Notable:
• In March, New Home Sales fell to the lowest level since October 1991
• The Int. Monetary Fund reduced its forecast for 2008 world economic growth to 3.7% from 4.1%
• Freddie Mac's portfolio increased to $712 billion in March, up from $709 billion in February
• Oil prices climbed to record levels near $120 per barrel, up from $70 p/b in August

Average 30 yr fixed rate:
Last week:+0.37%
This week:+0.06%

Stocks (weekly):
Dow:12,801-25
NASDAQ:2,402+3

Week Ahead

Next week will be a big one. As mentioned above, the next Fed meeting will be on Wednesday, and investors expect a quarter point rate cut. The April Employment report will be released on Friday. As usual, this data on the number of new jobs created, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month, since the health of the labor market is perhaps the single biggest factor in the performance of the economy. Early estimates are for a loss of 75K jobs in April.

In addition, the first look at first quarter Gross Domestic Product (GDP) will be released on Wednesday. GDP is the broadest measure of economic activity. The two national manufacturing indexes will come out on Wednesday and Thursday. Finally, the Fed's preferred inflation indicator, the Core PCE price index, is also scheduled for Thursday. The second half of the week will be absolutely packed with major economic news.

admin@corefinancegroup.com

[HUMMERcustoms.com/TAZ]

Thanks Adam!!!

I missed getting to read up Friday.

I'm just finishing up a lower high end priced home in a real fast growing town about 25 miles NE of LR, AR that in this area it had a 16% gain in sales for Feb. 2008 versus LR that had a 19% drop in sales. I got caught in transion from materials priced high to falling low after the bulk of framing the guts (you know what I mean) and ready for landscaping. I'm sort of still concerned.

Saving grace I hope is it has Lake in back yard with the tee box #12 touch left rear of back yard also cart path all looking out of back windows or standing on big tall deck. I'm hoping the view will save me. I would be happy to break even as people are looking for bargains and this is just not a bargain kind of house. I build everyone like I'm moving in and even with bad news I spent every penny that should have been spent and cut no corners even though I could have.

I have thought of moving in as I have always wanted home and lake in back. I sort of look at house like stock. You have not lost any money if you have not sold it. I have even thought about leasing it and let pricing come back to me. Man I thought about not starting this one but, no real bad stuff out yet so I should have went with my gut I guess and held back.

I have made deals long term on rough material bypassing local builders retail stores and getting the rough out of West Memphis from guys who supply the normal builder suppliers. I hope it will catch some sales by being able to really get prices down from where I would be stuck buying from same suppliers the rest are. It was a real blessing that I happen to meet the major wholesalers best friend. I had helped the best friend on getting a big drywall and paint contract. He said man I would like to do something for you. So you never know when a kind turn will lead to that worm turning in a good way. Crazy thing is the big man said the material will be delivered by local lumber yard I do not use but, now will. Makes no diff to me. My guess is the big man owns this state chain store. The other guys have done nothing special so nothing owed except pay their bills, which are.

Well Thanks Again Adam and sort of gave me a place to get this off my chest and feel a little relief.

TAZ