For the week of March 5, 2012 – Vol. 10, Issue 10
|BULLETIN… HUD is set to increase FHA up-front mortgage insurance premiums April 1. This is a significant change — please relay this to your buyers immediately: waiting will be costly. Call or email us for further information.
>> Market Update
QUOTE OF THE WEEK…“If I had a way of buying a couple hundred thousand single-family homes… I would load up on them.” –Warren Buffett
INFO THAT HITS US WHERE WE LIVE… Buffett, one of the world’s most successful investors, appeared live on CNBC last Monday and told viewers: “… if I knew where I was going to want to live the next five or 10 years, I would buy a home and finance it with a 30-year mortgage, and it’s a terrific deal.” He added, “… if I was an investor that was a handy type… I could buy a couple of them… and find renters… and again take a 30-year mortgage…. I think that’s probably as an attractive an investment as you can make now.” Check out the video: http://www.youtube.com/watch?v=vkx57Ifein8&feature=share
BUSINESS TIP OF THE WEEK… Apple means innovation. Disney says magic. What’s the one special thing you stand for? Decide on that, then make it the focus of all your marketing efforts.
>> Review of Last Week
GOOD NEWS, BAD NEWS… Bad news: the Dow suffered its third weekly loss since the start of the year. Good news: during the week, the Dow closed above 13,000 for the first time since 2008; the Nasdaq sailed over 3,000 (but didn’t stay there) for the first time since 2000; and the S&P 500 had its best two-month annual start since 1987. Good news, bad news also describes the economic data we continue to get. The bad news began with Durable Goods sliding 4% in January. This was followed by the good news that Consumer Confidence spiked to 70.8 in February.
DID YOU KNOW?… In 2012, the NAR expects a 1.1% rise in the median price for existing homes, a 2.1% median price rise for new homes and a 3.3% rise in rents.
>> This Week’s Forecast
ALL EYES ON FRIDAY… That’s when we get the February Employment Report which will tell us if the jobs situation, vital to the housing recovery, will continue its upward crawl. The consensus among economists is that there will be fewer new jobs for the month, although the Unemployment Rate should remain the same.
>> The Week’s Economic Indicator Calendar
Weaker 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.
>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months… Everyone still expects the Fed to keep the Funds Rate down for now, since they said they’ll try to keep it there til the end of 2014. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.
Current Fed Funds Rate: 0%–0.25%
Probability of change from current policy: