By Tony Stevenson/SWBC Mortgage
Economic News Week: February 28, 2011
U.S. stocks rose breaking a three day losing streak with the DOW closing up 61.95 points at 12130.45 this past Friday. The U.S. economy grew at a 2.8% annualized rate in the fourth quarter of 2010. This was down from its initial estimate of 3.2% but still at an acceleration from previous quarters. The Consumer Sentiment Index rose to 77.5 in February, up from 74.2 in January and the highest level in three years. Improved outlooks on the job market outweighed rising food prices and energy prices. Everyone knows that oil and gas prices have surged this past week on the crisis in Libya. However, I’m surprised U.S. markets haven’t fallen further than they have. One headline stated that, “Even though the U.S. doesn’t use Libyan oil, the global nature of crude pricing is key.” The U.S. dollar advanced on the euro and Swiss franc , though geopolitical uncertainty in North Africa and the Middle East remained at the back of investor’s minds. Lots of unrest overseas as well as here at home. Especially, with what’s happening in Wisconsin and the public unions. I’ll be watching with the rest of the nation to see how it all comes to rest-if it ever will.
Local Economic News:
The city of Cibolo has a new employment partner. The U.S. arm of a Canadian oil-field service company has chosen Cibolo as the site of a district office that will become the city’s largest employer, officials said Thursday. Sanjel (USA) Inc. based in Denver plans to hire “several hundred” workers for the Cibolo office. Development in the Eagle Ford shale for oil and gas is expanding rapidly and is attracting investment from U.S. as well as international companies. South Texas will become one of the state’s fastest-growing areas for new business and job creation over the next decade, a group of experts said Wednesday in a report in the S.A. Express News last week. That’s if they can get the oil out. Pipelines are already full and companies are having to truck it out or ship it by rail. I was at a restaurant in South Texas over Christmas and was caught up in a conversation of some of the patrons saying that new hotels were already being built and that local real estate is being bought up or leased. They said they do not expect this oil and gas boom to last forever but, it is expected to be around for the next 8-10 years. So, expect Texas’ unemployment numbers to drop further as time goes by. The question may be, “where are the taxes?”; as our Congress tries to pass its budget without complaints from their public. To promote tourism or education is another quandary our Congress faces. The super majority have their hands full. Hopefully, not at the cost of our children and their future.
Real Estate and Mortgage Industry News
“Is It Time To Buy?”, was a headline in the Wall Street Journal’s weekend edition. The relationship between the national housing market and local markets is breaking down and opportunities are cropping up for well-healed borrowers, the article stated. Home prices nationwide in December were down more than 31% from their 2006 peak according to the Case-Shiller Index, including a 4.1% fall in 2010. A shadow inventory of more foreclosures isn’t going to help sellers in 2011 either. It is still a buyers’ market-but for how long? Turning the page in the same WSJ edition, was another headline that read, “Getting a Mortgage Before The Door Shuts.” This article was full of ‘things to come’ regarding the mortgage industry. “If you are sitting on the fence trying to decide whether to buy a new house or refinance a mortgage, you should act soon. New loans are starting to get costlier,” said Karen Blumenthal of the WSJ. Some of the changes will come in the form of larger down payment requirements, higher MI (mortgage insurance) premiums, and higher FICO (credit)scores, just to name a few. They could be coming sooner than you think. The silver lining is that the rate for a 30 year fixed mortgage is around 5% for those with good credit. This is still low by historical standards. Take my previous advice and find a local Realtor and Mortgage loan officer and take advantage of the these times.