Archive for the ‘Guest Bloggers’ Category

WeeklyBasis 11/5: Rates Holding Near Record Lows

November 7th, 2011 by Julian Hebron

 

Rates were down .125% last week, ending .125% above record lows last hit October 3. But we did touch those record lows of 3.875% zero points (on single family home loans to $417k) briefly during Tuesday’s trading.

Below I recap last week, preview what’s coming next week, and remind consumers how to lock record rate lows that come and go in minutes. NOTE: Bond/rate markets closed Friday, November 11 for Veteran’s Day.

RECAP OCTOBER 31 – NOVEMBER 4 MARKET WEEK
Manufacturing: The Institute for Supply Management October manufacturing index was 50.8, with 50 as dividing line between expansion and contraction. September was 51.6. Good news: 27 months of growth. Bad news: barely growing.

Fed AND European Central Bank Meetings: No surprises from the Fed: overnight bank-to-bank rates near zero and they’ll continue reinvesting proceeds from mortgage holdings into new mortgage bonds to keep longer-term rates low. Europe’s Fed equivalent, now led by Mario Draghi, cut their one-week bank-to-bank rates from 1.5% to 1.25% to provide extra liquidity amidst debt crisis.

Jobs Report: 80k non-farm jobs were created in October. Weak report even with September revised from 103,000 to 158,000 and August revised from 57,000 to 104,000. About 2.3m jobs were created since an employment trough in February 2010, but there are still 6.47m fewer jobs than the beginning of the recession in December 2007. Over the past 12m, about 125,000 new jobs were created per month: not enough to keep pace with population growth.

PREVIEW NOVEMBER 7-11 MARKET WEEK
Here are next week’s economic calendar highlights with rate impacts:

Greece/Europe: Rates and stocks rose after the Oct 27 EU deal saying private Greek bond investors must take 50% writedowns. This was one condition of the next EU/IMF bailout payment Greece needs within 30 days to stay afloat. Another condition is ongoing austerity: pay cuts and tax hikes. So last week Greek prime minister George Papandreou said he wanted to let his people vote on austerity measures—as though they have a choice. The result: rates dropped again as U.S. mortgage bonds rallied and stocks sold. This up-down rate (and stock) trend will continue as the Greek charade continues.

Treasury Auctions: $72 billion in new Treasury debt will be auctioned into markets as follows: $32b 3yr Notes Tuesday, $24b 10yr Notes Wednesday, $16b 30yr bonds Thursday. Demand for these auctions, especially the 10yr and 30yr maturities, can dictate the mood in mortgage bond trading, but rates should remain even on auctions as U.S. debt remains a safe haven.

Consumer/Real Estate Themed Earnings: Another big earnings week with lots reports that will give a reading on consumers and real estate, including: Priceline.com, Sotheby’s, Dish Networks, Toyota, Vodafone, Anheuser Busch InBev, General Motors, HSBC, Macy’s, General Growth Properties, Ralph Lauren, Wendy’s, Cisco, Lionsgate Entertainment, Viacom, Disney, Kohl’s, Nordstrom, DR Horton.

Jobless Claims: This is a weekly report Thursdays. Claims for unemployment insurance were 397k last week, below the 400k threshold considered to signal an improving jobs picture. Still the 4-week average is 406k, so next week would have to continue the trend. Unless Thursday’s number is meaningfully below last week’s mark, rates will be even.

Technical Trading Factors: Looking at stocks, the S&P 500 closed last week at 1253, below the 200 day moving average they topped the week before. Charts suggest a trading range of 1215 to 1285 near term. It’s a broad range but volatility this year warrants it. The theme is similar for mortgage bonds—namely the 3.5% Fannie Mae coupon most lenders use to price consumer rate sheets. They closed the week well above their 50 day moving average, suggesting rates could move a bit lower. But the stock/bond reverse correlation is critical here. The volatility on both sides will continue as investors shift back and forth.

Bottom Line For Rates: Going into last week I said the week would be key to determine whether rates rise near-term or hold this volatile .25%-above-record-low range we’d been in since October 7. Now, record lows (see paragraph 1) seem feasible to touch again given technical trading factors noted above. Next week is a slow economic week so Europe will be the main theme, which means continued extreme volatility. So as I’ve been saying for several weeks, read the post below to understand how to capture the lows.

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Posted in by Julian Hebron, For Home Buyers, For Owners & Sellers, Guest Bloggers, Mortgage Market, National Housing News | No Comments »

WeeklyBasis 10/29: Jobs, Fed, ECB Center Stage

October 31st, 2011 by Julian Hebron

 

Rates were even to end last week after +/- .25% daily swings, and are still up .25% from all-time record lows set October 3-4. Another huge week ahead: Fed and ECB rate meetings, October jobs report, lots more earnings, and Europe’s debt crisis slogs on.

Below I recap last week, then preview what’s coming. And please note: you can see if you qualify now for HARP II, the new refi plan for underwater homeowners, but loans won’t be made until November 15 at the earliest.

RECAP OCTOBER 24-28 MARKET WEEK
Home Prices: Case Shiller’s reported home prices rose 0.2% July to August, the fifth straight monthly gain but a tiny gain. Prices are down 3.8% since August 2010 and stuck at 2003 levels. So: Is owning a home smart?

GDP: The first of three 3Q2011 GDP readings showed the economy grew at 2.5%, compared to 1.3% for 2Q and 0.4% for 1Q.

Europe Debt Deal: Rates rose Thursday on news of the EU debt deal but reversed Friday as skepticism grows. Next week’s preview below.

Consumer inflation: The Fed’s preferred measure of consumer inflation, the Personal Consumption Expenditures Index (PCE), was within their 2% annual cap. They focus on ‘Core’ which excludes food and energy prices. From Sept 2010 to Sept 2011, all-inclusive PCE was 2.9% and Core was 1.6%. Inflation ok for now.

PREVIEW OCTOBER 31 – NOVEMBER 4 MARKET WEEK
Here are next week’s economic calendar highlights with rate impacts:

Manufacturing: Tuesday is the Institute for Supply Management October manufacturing report. September was 51.6 with 50 as dividing line between expansion and contraction. Good news: 26th months of growth. Bad news: barely growing. Also, manufacturing is weak as measured by two other October surveys: Philly Fed (PA) was 8.7, up from September’s -17.5, the first positive in 3 months. Empire State (NY) was -8.48, fifth straight monthly contraction. For PA/NY surveys, 0 is line between growth/contraction. ISM shouldn’t be a blowout number so rates even.

Fed AND European Central Bank Meetings: The Fed’s meets two days with a policy announcement Wednesday. Rates dropped after their September 21 meeting because they recommitted to mortgage bond buying (not QE!). The Fed is unlikely to surprise markets, but Thursday’s European Central Bank meeting is huge: the first with new ECB President Mario Draghi (bio). His stance on ECB policy and EU debt crisis is key. Rates even to down on Fed meeting. Rates are wild card for ECB meeting.

Jobs Report: Markets expect Friday’s jobs report to show 88k-100k new jobs created in October and unemployment to hold at 9.1%. The economy added 103k new jobs in September, plus August was revised from zero to 57,000 jobs created, and July was revised from 85k to 127k. I think this one will be close to consensus. If so, rates even.

Europe Debt Crisis: Besides Thursday’s ECB meeting, there’s a G20 Summit Thursday and Friday. Both may elaborate on last week’s debt deal, which helped stocks and hurt rates. Another wild card for rates.

Corporate Earnings: Another big earnings week including reports from Pfizer, Kraft, Nissan, Honda, Comcast, Clorox, Mastercard, AIG, Unilever, Credit Suisse, Anadarko, Time Warner, News Corp, Sony, LinkedIn.

Technical Trading Factors: Last Thursday, the S&P 500 broke clearly above it’s 200 day moving average of 1274 for the first time since August 2, and closed at 1285 Friday. Also Thursday, mortgage bonds—namely the 3.5% Fannie Mae coupon most lenders use to price consumer rate sheets—dropped clearly below the 50 day moving average they were hugging since October 7. Mortgage bonds regained much of Thursday’s sharp post-EU news losses Friday, but they’re still below the 50 day moving average.

Bottom Line For Rates: These technical factors suggest stocks and rates could start the week stable, but volatility will remain extreme as politicians and central banks hog center stage. Also the 10yr Note yield, a key benchmark for rate markets, has risen enough (now 2.32%) to create upside rate rate risk near-term. Long-term, a rate spike isn’t warranted by weak global economic conditions. But next week is key to determine whether rates rise near-term or hold this volatile-but-steady range we’ve been in since October 7, which is .25% above record lows.
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Rate Shopper Must-Read:
How To Shop For A Mortgage

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Posted in by Julian Hebron, For Home Buyers, For Owners & Sellers, Guest Bloggers, Mortgage Market, National Housing News | No Comments »

WeeklyBasis 10/22: HUGE Market Week Ahead

October 24th, 2011 by Julian Hebron

Rates dropped .125% last week but are still up .25% from all-time record lows set the week of October 3. Next week is huge for U.S. economic data, corporate earnings, and Eurozone debt crisis updates.

I’ll quickly recap last week, then preview what’s coming. Also please note: loan limits weren’t increased in Washington last week, just discussed.

 

Recap Oct 17-21 Market Week
Last week’s slight rate drop was due to mortgage bonds remaining a safe investment amidst global market uncertainty. Rates drop when bond prices rise on buying. Here are the key stats:

Weekly jobless claims were 403k, close to the 400k mark below which the job market is considered to be improving. The 4-week moving average was also reported at 403k. This is better economic news if it holds.

Consumer and producer inflation were both near the 2% Fed comfort zone: CPI 3.9% and PPI 6.9%. Even the Fed’s preferred ‘Core’ readings that exclude food and energy crept up: Core CPI 2% and Core PPI 2.5%.

Manufacturing is still weak, measured by two key regional October surveys. Philly Fed (PA) was 8.7, up from September’s -17.5, the first positive in 3 months. Empire State (NY) was -8.48 vs. -8.82 September, fifth straight monthly contraction. For both surveys, 0 is line between growth/contraction.

Existing Home Sales were down 3.0% in September but up 11.3% since September 2010. UGLY STAT: 18% of contracts didn’t close, same as August but up from 9% in September 2010. This was due to homes not appraising for contract price and buyers getting cold feet after inspections.

Preview Oct 24-28 Market Week
Here are next week’s economic calendar highlights with rate impacts:

August Home Prices: Tuesday brings Case Shiller and FHFA home price reports. Case Shiller was up 0.9% in July, the fourth straight monthly gain, but prices were down 4.1% since July 2010. It’s the broadest home price measure. The FHFA report only measures prices of homes with Fannie/Freddie mortgages. Annual Case Shiller figures aren’t likely to go positive, so rates even.

GDP: Thursday is the first of three 3Q2011 GDP readings. Estimates range from 2% to 2.5% economic growth, compared to 1.3% for 2Q and 0.4% for 1Q. And remember 1Q was revised down sharply along with the first 2Q release. Rates up if higher-end estimates prevail.

Consumer inflation: Friday brings the Fed’s favorite measure of consumer inflation, the Personal Consumption Expenditures Index (PCE) for September. The Fed looks for ‘Core’ PCE (which excludes food and energy prices) to be 2% or less. In August, PCE was 2.9% total and 1.6% Core. Rates up if Core hits 2% or more.

Corporate Earnings: 790 companies report earnings this week including Caterpillar, Netflix, Amazon, UPS, Ford, Boeing, Exxon, Procter & Gamble, and Altria.

Technical Trading Factors: On the stock side, the S&P 500 has traded above key overhead resistance levels and is around its 200 day moving average. On the mortgage bond side, the FNMA 3.5% coupon (that most lenders watch to price rate sheets) is just below it’s 50 day moving average. If anything, the charts look like stocks correct a bit and bonds hold.

Europe Drives Everything: Economic data and earnings will still take a back seat to Europe. This weekend, the 27 EU leaders met then the 17 Eurozone leaders met separately to discuss options. Their latest: To be properly capitalized for Eurozone defaults (my words, there was no explicit mention of defaults), European banks need about 100b euros in capital after marking their sovereign-debt holdings to market values. This estimate looks low. Let’s not forget that during testimony Q&A back in July 18, 2007, Ben Bernanke told congress subprime losses would be contained to “$50 to $100 billion,” then a few weeks later he said it could be “several multiples of that,” then one year later financial markets imploded. The same EU/Eurozone leaders meet again this Wednesday, October 26 to fine tune a plan. Markets await.

Bottom Line For Rates: Rates will be extremely volatile next week, but it’s hard to see rates spiking since European uncertainty will likely cap stock gains. Rates should trade in a +/- .125% range next week. I’m holding to my premise that rates can touch record lows as Eurozone issues play out. Here’s a MUST READ to explain this: How To Shop For A Mortgage.

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Posted in 1st Time Home Buyers, by Julian Hebron, For Home Buyers, For Owners & Sellers, Guest Bloggers, Mortgage Market, National Housing News | No Comments »

WeeklyBasis 10/15: Rates Up .375%

October 17th, 2011 by Julian Hebron

Rates rose .125% last week after a .25% climb the week before. Rates are up .375% in the past two weeks, but still extremely low. My WeeklyBasis prediction last week was even rates as markets “start with rates up slightly on perception of progress in Europe, then fade.”

It didn’t fade yet but I also noted that “rates will continue to rise and fall on each little development in the European debt crisis.” So let’s look at the latest in Europe and preview the October 17-21 week.

Recap Oct 10-14 Market Week
Overly optimistic interpretations of “less bad” news and data continue to drive trading.

Jobless claims last week were 404k, above but close to the 400k line, below which the job market is considered to be improving.

September retail sales were 1.1%, which was at the high end of expectations and the largest gain in 7 months.

Eurozone leaders are inching toward a new plan for recapitalizing banks and the bailout du jour for Greece. More below.

The result of this less bad news and data was that the S&P 500 rose squarely above it’s 50 day moving average (chart), and mortgage bonds (3.5% FNMA coupon) dropped below their 50 day moving average.

Rates rise when bond prices drop like this.

Preview Oct 17-21 Market Week
Here are next week’s economic calendar highlights with rate impacts:

Monster Earnings Week: This week is huge for earnings including reports from Apple, Microsoft, Intel, IBM, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, Morgan Stanley, Coca-Cola, McDonald’s, and GE. Tech companies should be ok but financials may offset. Stock momentum was strong last week, contributing to bond selling that pushes rates up. Rates could rise a bit more on better earnings.

Manufacturing Reports: The October Empire State and Philly Fed manufacturing reports are released Monday and Thursday. Both reports were down sharply last month (-8.82 and -17.5 respectively). Any improvement will be in the ‘less bad’ category, which would bring negative rate sentiment. Rates even to up.

Europe Remains Huge U.S. Rate Factor: I’ll repeat a note from last week that market optimism about Eurozone bank safety nets misses the main point: Bank liquidity moves probably won’t stop defaults, they’ll just help manage liquidity problems when defaults come—and U.S. rates would likely benefit from Eurozone defaults. This needs to play out further, but there’s still no clear evidence supporting a sustained rate spike. It might not come this week since there’s new reports of progress, but this story is far from over, and the only bright spot is low U.S. rates medium term.

Technical Trading Factors: The 50 day moving averages noted above are important because there’s still room to drop from here—enough to push rates up another .125% to .25% near term. Charts (or “technicals”) are critical but ultimately impacted by economic fundamentals, which aren’t strong.

Inflation: September consumer and business inflation reports are Tuesday and Wednesday. No strong inflation trend here, so rates even.

Housing Starts & Existing Home Sales: Housing starts have been dismal and no big change expected. Existing home sales rose 7.7% in August, a five month high, so if this turns into a two-month trend, it will provide some optimism. Rates even.

Bottom Line For Rates: Rates could rise more next week on further perception of progress in Europe and corporate earnings, but it’s still reasonable to expect another dip to record levels in the coming months as Eurozone issues play out.

Here’s a MUST READ while waiting: How To Shop For A Mortgage.

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WeeklyBasis: Alarm Bell #2: Rates Up .625%. What Now?

December 6th, 2010 by Julian Hebron

Three weeks ago, this report said “perhaps it’s early to ring alarm bells when rates are still in the 4s” but here’s an update: as of December 3, rates are .625% higher than they were October 8, which means a borrower pays $184 more per month on a $500,000 loan. Consider the alarm bell sounded. Here’s why…

Last week Ireland was rescued from its inability to pay its debt, U.S. home prices decreased 1.5% from a year earlier to settle at 2003 levels, China manufacturing and inflation began to boil over, and U.S. unemployment rose to 9.8% as only 50k private sector jobs were created vs. the 140k expected.

The Irish and broader European debt crisis, reversal of home prices, and poor jobs data are all events that would normally cause rates to drop since each event causes investors to shift into safe bets like mortgage bonds—so mortgage bond prices rise and rates drop. But Chinese inflation threats and an overall sentiment that bond prices are already too high have outweighed these other factors—so mortgage bonds have been selling off steadily causing this rate spike.

As a result, rates are creeping toward the 5s. Below you’ll see 30yr fixed single family home rates for loans up to $417k are 4.625% as of Friday, and rates on loans up to $729k are 4.875%. These rates are the same on a condo loan if borrower had 25% down or more. But if they only have 20% down on a condo, add .2% to the rates.

Next week is light on economic data so the central bond market themes above will continue, and it doesn’t help that we’ll have $66b of new Treasury bond supply being auctioned into markets as follows: $32b 3yr notes Tuesday, $21b 10yr notes Wednesday, $13b 30yr notes Thursday. Oversupply can further spook bond markets.

In this unprecedented post-crisis era, we can expect lots more rate volatility, which could mean rates come down again. But anyone holding their breath for a return to low 4s may very well turn blue. The more likely scenario is that we level off into a trading range that’s +/-.25% from current levels for the next 1-2 months.

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Rates Up On China Inflation Threats, Better U.S. Jobs Outlook

December 2nd, 2010 by Julian Hebron

Stocks are rallying and bonds are selling off on three events today that signal improving economic conditions and inflation pressure. Rates rise when bond prices drop in a selloff. Stocks are way up (Dow +228) and bonds are way down (3.5% 30yr FNMA -72 basis points) on better than expected jobs growth numbers from payroll provider ADP, very strong Chinese manufacturing data, and European central bank president Jean Claude Trichet saying that they’d step up crisis prevention measures as needed.

Trichet’s remarks are temporarily countering negative European sentiment that was causing U.S. mortgage bonds to rally. ADP signals an improving economic picture for now: ADP data showed private sector added 93,000 jobs in November, the 10th straight monthly gain, and the biggest monthly gain in 3 years—which means Friday’s official Bureau of Labor Statistics jobs report could also be better (although ADP is not a very reliable predictor of BLS data). China’s manufacturing strength is the latest reminder of inflationary pressure and imminent rate hikes for that region, which all global bond markets are wary of.

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WeeklyBasis: Fed Quantitative Easing 101 (Part 2)

October 18th, 2010 by Julian Hebron

Why Rates Rose Week of October 11
Rates ended last week up .125% so they’re now just above extreme record lows resulting from speculation the Fed will announce more rate stimulus early November. Rates didn’t react much to tame consumer and business inflation reports for September and so-so retail sales. The rise was more because of $66b in poorly received Treasury auctions throughout the week ($32b 3yr notes, $21b 10yr notes, $13b 10yr bonds).

The Treasury auctions reminded overall bond markets, including mortgage bonds that rates are tied to, that bond supply is neverending and bond prices may be too high. So investors sold mortgage bonds to take profits, and this pushed rates higher. Fed rate stimulus fervor will continue next week (more on this below), and despite even the best long-term arguments against more Fed stimulus, the low rate impacts are happening right now—not later. Here’s why.

Quantitative Easing 101 (Part 2)
The stimulus we’re talking about is quantitative easing (QE), which is when the Fed prints money to buy bonds. When bonds prices rise on this buying, rates drop. But as we showed last week (http://www.thebasispoint.com/?p=5968), rate drops are most likely to come before the Fed actually starts its buying because markets buy those same mortgage and Treasury bonds before the Fed.

So by the time the next round of QE is announced—most likely November 3—the consumer mortgage rate impacts will most likely already be felt. See last week’s rate timeline for evidence of this (http://www.thebasispoint.com/?p=5968).

It’s also important to note that the Fed is creating new dollars—or printing money—to engage in QE, and one of the risks of this is that it devalues the dollar. If the dollar devalues too much as the Fed proceeds from here, investors would sell dollar assets like mortgage and Treasury bonds in search of better returns elsewhere. That would cause those bond prices to drop and rates to rise.

Beginning today and continuing through next week, there are 12 senior Fed officials making public speeches on monetary policy and economic outlook, and most support a new round of QE.

But just remember this: Markets trade while economists and Fed officials chatter. And the low rate trade is happening as you read this.

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WeeklyBasis: Is Economy Weak Enough For Rates To Go Even Lower?

August 30th, 2010 by Julian Hebron

Jumpy Rate Market Response To GDP & Home Sales Reports

Rates dropped 0.2% early last week then rose Friday to end the week even. The $109b in Treasury auctions throughout last week caused mortgage bonds to sell off slightly, and July’s record low New Home Sales (down 32.4% year-over-year) and Existing Home Sales (down 25.5% year-over-year) helped mortgages rally— rates rise on bond selloffs and drop on rallies. But then two factors caused a huge 59 basis point selloff Friday:

(1) The second of three 2Q2010 GDP readings showed the economy grew at 1.6% versus expectations of 1.4%. This was a big drop from both the first 2Q reading of 2.4% and the final 1Q reading of 3.7%. Normally economic weakness of this magnitude would cause a mortgage bond rally, bringing rates down. But the opposite happened because traders didn’t think the 1.6% number was weak enough.

(2) St. Louis Fed President and voting FOMC member James Bullard told CNBC that he thinks the Fed has “done as much as we’re going to do” in supporting the mortgage bond market. Remember: the Fed bought $1.25 trillion in mortgage bonds from January 2009 to March 2010, which has been the largest contributor to low rates since credit markets froze in 2007. Mortgage traders take Bullard’s comments seriously because, until now, Kansas City Fed president Thomas Hoenig has been the only FOMC member voting for tighter rate policies.

Rate Factors Week of August 30

Next week is packed with data: July consumer inflation, income and spending Monday; June S&P Case Shiller Home Prices, consumer confidence, and minutes from the August 10 Fed meeting Tuesday; payroll provider ADP’s jobs report Wednesday; June Pending Home Sales from the NAR Thursday; and the critical August BLS jobs report Friday.

After last week’s report that June-to-July Existing Homes Sales were down 27.2%, Robert Shiller (co-creator of the Case Shiller Home Price Index) said “this was the recording the month after the original closing deadline for the [homebuyer] tax credit, so it’s an anomalous month, but I do think that opinions about the market are weakening, and it may result in another decline in home prices going forward.”

Given the weight markets put on his Case Shiller Home Price Index, this Tuesday’s number should move mortgage bonds more than normal. As for Friday’s jobs report, estimates call for 105k job losses in August.

Weaker figures on next week’s data would normally help rates drop. But last week’s mortgage bond market reaction to the GDP figure shouldn’t be ignored: it was a very weak number but not weak enough in the mortgage traders’ eyes, so rates actually rose. Same goes for all data next week.

As discussed in the previous two WeeklyBasis reports, mortgage bonds are overbought, very jumpy, and looking for any little reason to sell off—which would push rates up.

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WeeklyBasis: Full Tilt Credit Boom, Part 2

August 23rd, 2010 by Julian Hebron

 

Rates are up about .125% following a mortgage bond selloff late last week, but rates are still at unprecedented lows. There was very little economic news last week, and the selloff (which pushes rates higher) came as bond markets traded on two main factors that will continue next week.

Rate Factors Week of August 23

These are all key reports that move bond markets, but they’ll be overshadowed by $109b in new Treasury bond auctions as follows: $7b in reopened 30yr TIPS Monday, $37b in 2yr notes Tuesday, $36b in 5yr notes Wednesday, and $29b in 7yr notes Thursday. This massive Treasury supply will disrupt bond markets and mortgage bonds may sell off, pushing rates higher.

How Long Can Low Rates Last?

Last week I explained (http://ow.ly/2rudZ) how government issues billions in new Treasury debt biweekly, why global markets have had such a big appetite for Treasury and mortgage debt over the past 18 months, and what might happen to rates if this bond rally reversed into a selloff.

A few days after those comments, Wharton finance professor Jeremy Siegel published a Wall Street Journal OpEd entitled The Great American Bond Bubble (http://ow.ly/2ru3P) discussing similar concerns about an overbought Treasury bond market. He thinks a bond market selloff is imminent, and presented estimated investment losses for bondholders.

But you don’t have to be a mortgage or Treasury bondholder to experience investment losses. The rate increase that comes from a bond selloff is, in essence, an investment loss for consumers seeking mortgages.

The fragile global economic climate still justifies investors seeking the safety of mortgage and Treasury bonds, but Siegel is not alone in his sentiment, and markets can shift violently. If the U.S. had a debt crisis like they’re having in Europe, it would cause huge mortgage and Treasury selloffs and sharp rate spikes.

But the more likely scenario is a correction off current price levels for mortgages and Treasuries, and even this would push mortgage rates up .25% to .5%.

For now though, it’s still a full tilt U.S. credit boom, so consumer rates are stunningly low. The rest is whether a homebuyer can negotiate the right deal on a home in an area with price stability.

Which brings us to the second rate factor for next week: bond markets realizing that their boom era can’t go on forever.

First is market calendar for the week beginning Monday, August 23. We have July’s Existing Home Sales (from the NAR) and New Home Sales (from the U.S. Census Bureau) Tuesday and Wednesday, then the second reading of 2Q2010 GDP and Consumer Sentiment on Friday.

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Tea With Claudia: An Interview with Jamie Drake

July 27th, 2010 by Claudia Juestel

JD-Claudia-s

Jamie Drake and Claudia Juestel at De Sousa Hughes (Photo: Moanalani Jeffrey)

 My interview with Jamie Drake was conducted in a unique location, an elegant display room for De Sousa Hughes on the first floor of the Showplace Square building in the San Francisco Design Center. Having High Tea behind display windows was a first for both my guest and myself. As busy designers were walking by we sipped on Organic Darjeeling Estate by Mighty Leaf Tea, nibbled on various tea sandwiches from Lovejoy’s Tearoom and chatted about the evolution of a creative child to an established designer, about show houses, color, and inspiration.

For complete article please visit Reside

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