By Tony Stevenson/SWBC Mortgage
Economic News Week: November 7, 2011
The Dow Jones Industrial average fell 61.23 points, or 0.5 percent and ended at 11,983.24 for the week this past Friday. Our nation’s unemployment report remains on shaky ground. However, it did drop slightly to 9.00% in October, down from 9.1% just the month before. More government layoffs (-24,000) didn’t help the jobs report but private sector employers added +104,000 and isn’t that where we need employment growth? Of course it is, but you will only hear “jabs and barbs” from both sides of the political isle that we need more jobs and that their independent plans for job growth is the “only” plan that will work. The fact remains that we did have positive job growth and that is the way to a more real economic recovery. Plus, consumer spending which holds about 70% of our nation’s economic growth factor. August and September employment numbers turned out to be much better months for job creation than previously thought. Jobs and consumer spending-no matter how you slice it- is what counts. The question is, “ how do we get there from here?” There’s the “999” plan raised by presidential hopeful, Herman Cain. Or, the 20% flat tax rule from our own Texas Governor, Rick Perry. But what about President Obama’s job creation plan being debated now in Congress? The 1% versus the 99% is yet another contest yet to be played out. We have almost exactly 12 months to decide the outcome of the next presidential race and what direction our nation will take. I am optimistic that whomever wins, the best of our nation will shine.
Local Economic News
Mark Dotzour, chief economist of the Real Estate Center at Texas A&M University says there’s a slow, gradual recovery in progress (nationwide) in an article in last week’s S.A. Express News. I might also add, that Texas is faring better than most states as our State’s job growth continues in the oil and gas sector-by leaps and bounds. Regarding profits alone, San Antonio based refiner Tesoro Corp. said last Wednesday that its third quarter earnings reached their highest level since mid-2007. Plus, San Antonio based contract driller Pioneer Drilling Co. Inc. reported a net income of $6.7 million beating analyst’s predictions. Pretty strong earnings if I say so myself. But, if you’re anything like me, I would like to see a lot more help at the pump. If anything to have a little bit more discretionary spending cash in my pocket. Or, I may have to do a little protesting myself of the big oil companies and start riding my horse to work.
In another article in last week’s S.A. Express News, Texas women are closing the earnings gap with their male counterparts. The article continued to state that The Bureau of Labor and Statistics reported last Wednesday- Texas women earned 85.6 percent of the median salary for men in 2010. Texas is one of only seven states where the ratio tops 85 percent.
Real Estate and Mortgage Industry News
Builders reported a 0.2% increase in spending last month. A well-deserved increase no matter the size. It was also reported that San Antonio’s commercial real estate is rebounding which was the message at the 20th annual San Antonio-South Texas Certified Commercial Investment Symposium held at the Westin La Cantera Resort last week. “After three long years and I mean long years---- we are now finally beginning to see the pendulum swing,” said Wade McGinnis, a partner at Barshop & Oles co., who was a speaker at the event.
Freddie Mac reported that the 30 year fixed rate index dropped to 4% this past week-if only briefly. I realize that I sound like a broken record, but with mortgage rates at these levels, I am almost in shock that not more folks are taking advantage of the times. Yes, there are those few smart folks that know a good deal when they see it, but then again I hear of some folks thinking that rates are going to drop a lot further. If you know of one of these, ask them this, “just how much further do rates have to drop in order to get them to consider taking the plunge and buy into the American dream of home ownership?” Mortgage rates are already in the 3.5%-4.5% range. That’s cheaper than some of our grandparents could buy a home in their time! Keep in mind too, that in San Antonio/Austin and the Texas Hill Country, home prices have stabilized and even increased in some areas. I am afraid that by the time those few “waiting it out” will “miss out” on the chance of a lifetime. Tell them to find a local Realtor and Mortgage Lender to seek advice from and confirm what I am saying here in this article.
Economic data due this week: Greece decides on major economic overhaul this week. More Corporate earnings for the 3rd qtr will be released. Monday: Consumer Credit Data report for September. Tuesday: Election Day. Wednesday: Wholesale Trade Inventory report for September. Thursday: International Trade Balance=U.S. Imports vs Exports. Thursday: Weekly Jobless Claims. Thursday: Freddie Mac releases weekly interest rates. Friday: Veterans Day. Bond Markets will be closed.
Quote of the week!
A mistake is evidence that someone tried to do something.
-----Croft M. Pentz