The DOW rose slightly for the week and closed at 13275.20 this past Friday. Earnings reports were responsible for keeping the DOW in check. The Leading Indicators report in the S.A. Express News last week helped provide more positive news regarding our U.S. economy. The report stated that “ a measure of future economic activity recovered in July following a sharp drop in June, providing further evidence of an economy that is regaining some momentum.” The Conference Board said its index of leading economic indicators increased 0.4% in July after falling the same percentage in June. The July strength came from an improvement in a number of components, U.S. Manufacturing and Retail Sales, just to name a couple. Industrial production was up 0.6 percent in July from June, the fourth straight increase. Low inflation could boost consumer spending further in the second half of the year. However, a close eye is on the effects of the severe drought in the Midwest and gas prices, which, in turn, will affect food prices and consumer cash outlay. At least our economy can pinpoint the areas that need help. Corn production and gas!
Real Estate, Mortgage Industry, and Other Economic News
Home Builder Confidence rose in August to a five-year high of 37, according to the National Association of Home Builders. I have personally seen an increase of new construction within my business. When home builders start to build more homes, they also add to employment. Even though the jobless rate in San Antonio ticked up 6.8 percent from 6.7 percent, Keith Phillips with the Fed San Antonio Branch said he “wouldn’t put a lot of weight” in the monthly numbers.” The area’s job growth was 2.2 percent, seasonally adjusted. Keep in mind that, in the last two years, the Texas economy has added 457,700 non-farm jobs. That is an accomplishment in anyone’s book. What is happening is that those who dropped off the unemployment books have jumped back in looking for jobs, plus out-of-staters moving here looking for jobs. Texas remains the state for growth. Finally, it is “Back-to-School” for most public schools in the week ahead. Watch out for children in the crosswalks and those walking to school!
Fixed Rates Hit 3.62 Percent Marking Third Consecutive Week of Gains (National Mortgage Professionals.Com) Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing the 30-year fixed-rate mortgage (FRM) averaging 3.6 percent with an average 0.6 point for the week ending Aug. 16, 2012, up from last week when it averaged 3.59 percent. Last year at this time, the 30-year FRM averaged 4.15 percent. The 15-year FRM averaged 2.88 percent for the week with an average 0.6 point, up from last week when it averaged 2.84 percent. A year ago at this time, the 15-year FRM averaged 3.36 percent.
"The latest economic indicators point toward low inflation but gradually stronger economic activity which placed further upward pressure on long-term Treasury yields and, in turn, fixed mortgage rates," said Frank Nothaft, vice president and chief economist, Freddie Mac. "For example, inflation remains in check with 12-month growth in the core consumer price index falling for a second month to 2.1 percent in July. At the same time, industrial production rose 0.6 percent in July compared to a 0.1 percent increase in June and retail sales jumped 0.8 percent in July from a 0.7 percent decline in June."
When mortgage rates trend higher, then it appears that home buyers start “propelling” themselves off the proverbial fence, or so it seems. I am still hearing reports of soft sales, but more reports that realtors’ phones are ringing and home showings are being scheduled. If you are waiting to buy the home of your dreams, maybe you will see that the time to invest is now.
Don’t forget-The Gillespie County Fair (and Horse races) is this weekend!
(This article is for informational purposes only. Do not use it as financial advice. For questions/comments contact Tony Stevenson at 1.800.460.6990 or email: firstname.lastname@example.org)