Initial Jobless Claims Reach 3-Year Low

Initial jobless claims dropped 19,000 for the week ending December 10th to 366,000. This marks the lowest level for initial claims since May 2008. Though the weekly claims report can be volatile, 5 of the past 6 weeks have come in below the 400,000 mark. A sign that perhaps the employment sector is improving. The 4-week average for initial claims also fell, dropping 6,500 to 387,750.


This report is timely and occasionally moves the market. Although volatile and subject to big revisions, it is considered a good gauge of labor market conditions and an indicator of the employment report.

The latest data in Utah shows a November 2011 unemployment rate of 6.4%. This is down from a high of 8% in early 2010.

Thinking of moving? Why April of 2010 is going to be the end of a great opportunity

In November of 2008 the Federal Reserve announced a massive program to purchase the instruments that control mortgage interest rates, Mortgage Backed Securities. (MBS) MBS are bonds issued by Fannie Mae and Freddie Mac that underlie conforming mortgages in the United States. As a result of the “credit crisis” that started in late 2007 any asset that was perceived as having risk was being avoided by institutional investors.
Historically, bad economic times are good for bonds and as a result, interest rates drop. However, due to the perceived risk of MBS, no institutional investors were buying these securities and rates were stubbornly hovering in the 6.5% range.

Enter the Fed. In an effort to aid the housing recovery, they announced that they would buy 1.25 TRILLION dollars worth of MBS. In doing this they forced the price of these bonds up, thereby decreasing their yield (read interest rates drop). This program has been very successful in keeping mortgage rates near historic lows for all of 2009. So, why does this affect you if you are planning a home purchase in 2010? Originally, the Fed planned to end the MBS purchase program at the end of 2009. Realizing that an abrupt end to the program would cause interest rates to spike and have a drastic effect on the markets, they have modified the program to taper off incrementally though the first quarter of 2010. The bottom line, if you are considering financing a mortgage in the next year or two, you could save yourself tens of thousands of dollars by completing your financing by the end of March. We have every reason to believe that by April 2010 rates will be back in the 6.5% range. On a $200,000 loan the difference between a 5% rate and a 6.5% rate is 191.00 monthly basis and $68,000 over the life of a 30 year loan. This truly is the end of a historic opportunity. Don’t miss out!!!

Exsisting Home sales jump in September

The NAR released it's October report today outlining september's housing activity.

Here are the points that I feel are worth discussing with our clients:

• 9.7% increase month over month from August to September

• September’s annualized rate of 5.57 million homes sold is the highest since July of 2007

• Total housing inventory fell to a 7.8-month supply at the current sales pace. Unsold inventory totals are 15.0 percent below a year ago.

• The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008.

• Existing-home sales in the West surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.

• Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.

Read the entire artile here.