Sep 21 2015 9890 1

Dated: 09/21/2015

Views: 451

Danyal Erickson
Mortgage Loan Originator
NMLS# 1299942
1517 N. Ankeny Blvd, Ste. A
Ankeny, IA 50023
Cell: (515) 491-6861
Office: (515) 965-1707
Fax: (844) 289-7133
For the week of September 21, 2015 – Vol. 13, Issue 38

>> Market Update 

QUOTE OF THE WEEK... "Drawing on my fine command of the English language, I said nothing." --Robert Benchley, American humorist, newspaper columnist, and film actor

INFO THAT HITS US WHERE WE LIVE... Some people felt there was really nothing to say after Housing Starts dropped 3.0% in August, to a 1.126 million annual rate. But, as usual, a deeper dive into the data gives us plenty to talk about. While it's obvious that home building took a summer break in August, it's been pretty active the last 12 months, with starts in that period up 14.9% for single-family units and up 16.6% overall. Some see that trend continuing at least through the end of 2016. They say that with population growth and tear downs, housing starts need to get to about 1.5 million units annually, so there's lots of recovery still to come.
We could get there sooner than some think, since new building permits went up 3.5% in August, climbing to a 1.170 million yearly rate. In fact, single-family permits are now at their highest level since January 2008. No wonder the National Association of Home Builders confidence index reached its best reading since October 2005. Before the Fed left rates unchanged on Thursday, Freddie Mac's chief economist said, "Even if the Fed decides to raise short-term interest rates, we don't expect a significant impact on the housing market." A good thought to remember whenever the Fed finally hikes rates. He added: "We're still on track for the best year of home sales since 2007." 
BUSINESS TIP OF THE WEEK... The way to get new business with the least investment of time and money is to solicit past and present clients. You know how to reach them, they know your value and may have additional needs you can meet.

>> Review of Last Week

THE FED HOLDS, STOCKS FOLD... Regular Inside Lending readers weren't surprised by the Fed's decision last week to hold rates down. Our prior edition pegged the probability of a rate hike at just 23%. The mass media felt otherwise, hinting rates would likely go up at Thursday's meeting. This was strange, as the probabilities we report come from public sources respected by many economists. After the Fed's rate hold, stocks folded, as the Dow fell 290 points Friday, leaving it and the S&P 500 down for the week and the Nasdaq barely ahead. This was blamed on the Fed's doubts about U.S. and global economic strength, but Friday was also a volatile quarterly "quadruple witching" day.
Some analysts see the current stock downturn as purely a technical correction, driven by investors taking profits after a long bull market run. These folks point out that although the economy is far from booming, it is making progress, if ever so slowly. One aspect of that progress was the 0.2% gain for Retail Sales in August. Unfortunately, the manufacturing sector didn't fare as well, with Industrial Production, Capacity Utilization, the New York Empire and Philadelphia Fed Indexes all posting declines. On the other hand, Initial Unemployment Claims dipped to their lowest level in two months, while Continuing Unemployment Claims fell to 2.237 million.
The week ended with the Dow down 0.3%, to 16385; the S&P 500 down 0.2%, to 1958; and the Nasdaq UP 0.1%, to 4827.
Bonds did well, strongly rallying as global stock markets and oil prices suffered steep declines. The 30YR FNMA 4.0% bond we watch finished the week UP .12, to $106.20. Freddie Mac's Primary Mortgage Market Survey for the week ending September 17 showed national average fixed mortgage rates largely unchanged. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information. 
DID YOU KNOW?..."Quadruple witching" day is when stock index futures, stock index options, stock options, and single stock futures all expire. Since investors must close out of their positions, there's usually high volatility and trading volumes. It's the third Friday of the last month of each quarter.

>> This Week’s Forecast

HOME SALES UP AND DOWN, BUSINESS INVESTMENT OFF, ECONOMY GROWS... The typically mixed bag of economic data includes August Existing Home Sales, forecast a bit down, and New Home Sales, a bit up. Durable Goods Orders should show business investment slightly on the wane, yet theGDP - 3rd Estimate is expected to report economic growth holding at 3.7%.>> The Week’s Economic Indicator CalendarWeaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. 
Economic Calendar for the Week of Sep 21 – Sep 25
Sep 24
 Date Time (ET) Release For Consensus Prior Impact
Sep 21
10:00 Existing Home Sales Aug 5.50M 5.59M Moderate
Sep 23
10:30 Crude Inventories 9/19 NA -2.104M Moderate
08:30 Initial Unemployment Claims 9/19 271K 264K Moderate
Sep 24
08:30 Continuing Unemployment Claims 9/12 2.248M 2.237M Moderate
Sep 24
08:30 Durable Goods Orders Aug -2.0% 2.2% Moderate
Sep 24
10:00 New Home Sales Aug 515K 507K Moderate
Sep 25
08:30 GDP - 3rd Estimate Q2 3.7% 3.7% Moderate
Sep 25
08:30 GDP Deflator - 3rd Est. Q2 2.1% 2.1% Moderate
Sep 25
10:00 U. of Michigan Consumer Sentiment - Final Sep 87.0 85.7 Moderate

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months...The Fed's move last week to leave the Funds Rate unchanged has led most economists to think we won't see a hike now til next year. Note: In the lower chart, an 11% probability of change is an 89% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus
Oct 28 0.00%-0.25%
Dec 16 0.00%-0.25%
Jan 27 0.00%-0.25%

Probability of change from current policy:
After FOMC meeting on: Consensus
Oct 28       11%
Dec 16       39%
Jan 27
This e-mail is an advertisement for Danyal Erickson. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in this message is the property of Stearns Lending, LLC and cannot be reproduced for any use without prior written consent. This message is intended for business professionals only and is not intended for distribution to consumers or other third parties. The material does not represent the opinion of Stearns Lending, LLC. This is not a commitment to lend. Program restrictions apply. Stearns Lending, LLC offers many loan products. Stearns Lending, LLC is a California Limited Liability Company headquartered at 4 Hutton Centre Drive, 10th Floor, Santa Ana, California 92707. (800) 350-LEND (5363) Company NMLS# 1854 ( Stearns Lending, LLC is licensed, registered, or exempt from licensing to conduct business in the following states which require license disclosure on advertising materials: Arizona Mortgage Banker License #0905413; Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act RMLA# 4130495; Georgia Residential Mortgage Licensee #24066; Illinois Residential Mortgage Licensee #MB.6760686; Kansas Licensed Mortgage Company #MC.0025047; Massachusetts Mortgage Lender/Broker License #MC1854; Licensed by the Mississippi Department of Banking and Consumer Finance; Missouri Residential Mortgage Loan Broker License #12-2052; Licensed by the New Hampshire Banking Department; Licensed by the N.J. Department of Banking and Insurance; Rhode Island Licensed Lender; Registered under Texas SML Mortgage Banker Registration; Virginia State Corporation Commission Lender/Broker License #MC-2184; Washington Consumer Loan Company License #CL-1854. For State of Nevada residents Stearns Lending, LLC is a mortgage lender promoting the loan products or services contained in this article; the business phone number that Stearns Lending maintains on file with the State of Nevada Department of Business and Industry is (714) 513-7777. This information is accurate as of July 24, 2015. © 2015 Stearns Lending, LLC All Rights Reserved. 

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