Blanco County News
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Economic News Week: December 3, 2012
SWBC Mortgage
Wednesday, December 5, 2012 • Posted December 6, 2012

Stocks rose slightly this past Friday as investors were waiting on news regarding Congressional leaders’ latest attempt at solving the fiscal cliff before year’s end. The Dow closed at 13025.58 for the week. Investors could be in for a long wait if they expect both sides to agree on certain aspects of a deal. It is going to take constituent (that’s me and you) input-and lots of it-before they come to any terms, in my opinion. One thing I am certain of is this-they will reach a deal, but I think it is going to go down to the wire. President Obama and House Leader John Boehner didn’t seem to hang their hats on an agreement any time soon after their meeting last week. Behind-the-door politics is what will win out. Kind of like the new “Lincoln” movie currently showing in theaters. If you haven’t seen this movie yet, please do-an inspiring movie, in my opinion. Billionaire Warren Buffett is again calling for higher taxes for the “ultra-rich” and he’s urging Congress to compromise on spending cuts and tax increases. We will watch as this drama continues. In any case, I am personally expecting a better Christmas no matter what they work out in the numbers. I am putting my money on the American Consumer.

Our U.S. economy is getting better. Point in fact, Cyber Monday was the biggest online shopping day ever. Figures show that sales from online purchases rose 17 percent from 2011 over $1.5 billion by most estimates. Retail Sales for the whole Black Friday weekend were very robust as well. Shopper-Trak, an economic surveying company, reported an 8.2 percent increase in sales for the four day weekend compared to a year ago. The American consumer came through again. U.S. Consumer Confidence rose to its highest level in almost five years this month. Pretty impressive, despite all the negatives comments about our economy during the elections from both sides of the aisle. Plus, Factory Orders were up for core capital goods, considered a proxy for business investment, rose 1.7 percent in October, the best showing since May. When businesses make such investments, it means that more hiring is on the horizon. Americans seeking jobless benefits fell 23,000 last week. This was its second drop after superstorm Sandy had driven applications higher. Finally, the GDP grew faster than first estimated in the third quarter. The Commerce Department reported that GDP grew 2.7 percent in the three months ending Sept. 30, well above the 2 percent estimate it initially made in late October. The final GDP for the year is scheduled for Dec. 20th.

Real Estate, Mortgage Industry, and Other Economic News

Nationally, an index measuring the number of Americans who signed contracts to buy homes in October jumped to nearly its highest level in almost six years. The National Association of Realtors said its seasonally adjusted Pending Home Sales Index rose 5.2 percent in October. Excluding a few months when there was a home-buyer’s tax credit, that is the highest level since March 2007. The Case/Shiller home price index rose 3 percent in September compared with the same month last year. I am sure you will agree that our economy relies heavily on the Real Estate sectors, including but not limited, to Construction and Mortgage.

Locally, San Antonio (108.1) was second only to Houston (110.01) in the growth of its economy in September, based on an index that includes tax revenues, jobs, growth in new-home prices and residential permits as well as production of goods. Nationally, San Antonio-New Braunfels are ranked fifth as the fastest growing metropolitan area in the whole nation, according to data from Pitney-Bowes Software. The data shows that the area will grow 7.1 percent from 2012 to 2017. During that five year period, 55,017 new households are expected to be added. An economist, Emilia Strate, at Brookings said that the San Antonio area’s job count is expected to increase 2 percent for 2012 compared to North American cities at 1.4 percent. As growth continues in these areas of the state, the Texas Hill Country will be primed for growth as well.

Mortgage rates rose 0.04 basis point for the week to 3.51 percent for the 30-year fixed rate index, according to HSM.com. Still at historically low rates, the question still remains, “For how long?” If the FED is any indicator, at least until mid-2015. The other question might be, “What is considered a low rate?” I am sure everyone remembers when mortgage rates were 7%-9% not too many years ago. Keep in mind that home prices were lower then as well.

“Times, they are a changin’,” as someone once said. After the first of the year, the newly form CFPB (Consumer Finance Protection Bureau) will make its ruling or define what a QM (Quality Mortgage)actually is. The CFPB was created under the Dodd-Franks Act as a regulatory arm intended to regulate and implement rules for financial institutions including, but not limited to, mortgage lenders. One of the ideas floating around is that they could define a “QM” as any mortgage requiring an 20 percent down payment. I do not want to sound negative here but, if that happens, FHA, VA USDA will be caput-no more! Only those folks with 20 percent cash down will be allowed to obtain a mortgage. Does that make sense? Talk about ruining an economy. Take away the ability to purchase a home from consumers and our whole economy will be in the hole. So what should you do? For one, contact your Congressperson, Democrat or Republican, and express your opinion and concerns. Congress still has a say in what the CFPB does but they won’t say anything unless they hear from you. Personally, I do not think the CFPB will be that delusional in thinking that would be a good thing for the U.S. However, nothing surprises me anymore. I am still going to remain optimistic that 2013 will be a banner year in real estate and mortgage and I for one want to be right in the middle of it helping folks obtain the American dream of home ownership. This is what I, and many others like me, strive for.

Dedicated to Mr. Zig Ziglar

“You can have everything in life you want, if you will just help enough other people get what they want.” This was Mr. Zig Ziglar’s mantra in life. Mr. Ziglar, one of America’s finest motivational speakers and positive thinkers, passed away last week from complications of pneumonia. He was 86 years old. The first time I met Mr. Ziglar was right after I was diagnosed with cancer. My oncologist and my parents suggested that I attend one of his day-long motivational seminars. I had a bad attitude at the ripe age of 19 years old when I was told I had cancer of the “Lance Armstrong” variety. After attending his seminar, I bought his books and cassette tapes. From then on I decided that I would not let the big “C” get the best of me. I know that “attitude” goes a long way in anything we do, be it positive or negative. Mr. Ziglar was an unseen mentor of mine. After all, I could listen to him any time I wanted just by putting in one of his tapes. That was over 30 years ago. Fast forward to around 5 years ago, I met Mr. Ziglar again at another motivational all-day seminar. This time I got to speak one-on-one with him. I got to personally tell him how much his tapes and books had meant to me throughout my lifetime, from getting over cancer to personal relationships to career changes. He said, “Tony, that’s why I do what I do.” Such a kind and sincere man he was. My wife and I still listen to his tapes today. I know his family will miss him, just as those of us who learned a lifetime of lessons from him will miss him too. Mr. Ziglar’s mantra is another take on the Golden Rule-“Do unto others as you would have others do unto you.” This Christmas Season we would do good to remember the same.

(This article is for informational purposes only. Do not use it as financial advice. Information for this article obtained from, but not limited to, The Wall Street Journal, S.A. Express News, Blanco County News, Boerne’s Hill Country weekly. For questions/comments contact Tony Stevenson at 1.800.460.6990 or email: tstevenson@swbc.com).

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