Snoqualmie Pass Real Estate, Mortgage, and Economy
KEEPING ON KEEPING ON - For the fourth week in a row the markets moved sideways, with one index slightly up, one a bit down and the third flat. Recently, there haven't been any extreme weekly market moves in the indexes, up or down. Investors aren't quite ready to believe things are as good as some indicators suggest, but they’re also not buying into any of the bleak scenarios some pundits still proffer. Those pundits jumped all over Fed Chairman Ben Bernanke’s reference in a speech to "formidable headwinds" for the economy. He was actually cautioning us to not expect economic expansion to be too dramatic. His also said: "our economy has made important progress during the past year. The financial system and the economy have moved back from the brink of collapse, economic growth has returned, and the signs of recovery have become more widespread." Why didn’t those experts focus on this observation of - more widespread recovery? For the week, the Dow went UP 0.8%, to 10471.50; the S&P 500 was up just 0.43 points, to 1106.41; while the Nasdaq went down 0.2%, to 2190.31.
They were probably too busy ignoring the good news of a decreasing trade deficit, with exports UP six months in a row, at a 26.4% annual rate! We also saw the four-week moving average of unemployment claims fall to 474,000, its lowest level since September 2008. In fact, for the last six months, the decline in initial claims is faster than the declines during the "jobless" recoveries of 1991-92 and 2002, a signal this recovery may not be jobless. The week ended with November Retail Sales UP a way-better-than-expected 1.3%. So it came as no surprise that University of Michigan Consumer Sentiment also blew past consensus expectations! If you have any questions, please contact me.
Last week gave us more proof the country’s housing market is heating up. According to Freddie Mac’s quarterly national Conventional Home Price Index (CMHPI), home prices were UP 0.9% in Q3 for their second quarterly increase in a row! And the Q2 number was revised upward to 2.0%! These rises have taken back about two-fifths of the price declines seen in Q4 of 2008 and Q1 of this year. Freddie Mac’s chief economist said, "the home-price gains of the past two quarters reflect improving existing-home sales." Sales volume was up 15% between the first and third quarters of this year." He also added: "The lowest average fixed-rate mortgage rates in a half-century, lower house prices, incentives to encourage first-time buyers, and loan modification efforts to stem foreclosures have worked together to support sales and reduce the inventory of unsold homes."