San Francisco Real Estate - Residential

Mortgage Weekly Update - Last Week in Review

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Mr. Weeks says about last week’s activity:

"EVERY DARK CLOUD HAS A SILVER LINING...BUT LIGHTNING KILLS HUNDREDS OF PEOPLE EACH YEAR WHO ARE TRYING TO FIND IT." Larry Kersten. Now that's pessimism! Interestingly enough, in recent weeks - Traders have been searching to find a silver lining or at least a glimmer of light in the dark economic reports - trying to find something to be optimistic about. Last week - the economic report calendar was lean but volatile, as Traders sought for morsels of good news amidst the gloom. All in all - home loan rates improved slightly in the early part of the week, but then worsened towards the end of the week.

Remember first that when Stocks move lower, some of that money can move over into the Bond market, helping Bond prices move higher and home loan rates move lower. Last week, Bonds benefitted early on from Stocks trading sluggishly, partially due to other world equity markets being pressured lower under concerns for the overall global economic recovery - but the economic news calendar was thin. However, things really heated up mid-week, as earnings season kicked into gear, big Treasury auctions hit the stage, and an interesting look at the job market arrived via the Initial Jobless Claims numbers.

According to that report, the number of initial unemployment claims last week dropped off by 52,000 to come in at 565,000 new claims, better than expected and the lowest level since January. Initially, Stocks reacted with some euphoria - but then reversed lower. Why? Think about it for a minute. Is the fact that 565,000 people applying for unemployment benefits for the first time, over the course of a holiday shortened week, really such terrific news? It's like when someone is starving, and manages to find a crust of bread in the trashcan it seems great at first, until the overall reality sets back in. And so seems to go the Trader mindset lately. Starving for any morsel of good news and looking hard for a silver lining amongst the clouds, sometimes news that is really pretty bad - like 565,000 people applying for first time unemployment benefits - is initially overblown with euphoria...that then quickly wears off.

The real story is that continuing unemployment claims - which measures the number of people who still receive jobless aid after their initial week - rose by 12,000. When you add it all up, the number of Americans receiving unemployment benefits total 6.88 million, which is a new record high and more than double what it was this same time last year. The underlying problem is that companies still aren't hiring, which means the jobless rate will continue to rise. In turn, unemployment will continue to curb consumer spending and, in the big picture, will slow economic recovery.

Read the entire article on our blog.

posted by SFResidence.com @ 11:09 AM