Jobless Claims: Weekly jobless claims for the week ending December 6 exceeded analyst predictions, increasing to 573,000 from 515,000 the week prior. The increase erased hopes that weekly numbers were trending downwards, since claims decreased by 16,000 on November 29 from the week before.
Continuing claims for the week ending November 29 increased dramatically by 338,000 to 4.429 million — the largest increase in over 30 years.
The Producer Price Index (PPI), a measurement of costs at the production level, dropped for the third month in a row, to a record-monthly decline of 2.8% in October. The drop is largely explained by the steady decline in food and energy prices over the last few months:
Producer prices for energy products are now beginning to reflect the recent declines in energy costs. Large declines were seen in prices for petroleum products, particularly gasoline and diesel fuel.
Crude prices dropped nearly two dollars this afternoon settling at $100.87 a barrel:
U.S. light, sweet crude [US@CL.1 100.67
-1.91 (-1.86%)] fell $1.71 to settle at $100.87 a barrel after dipping as low as $100.10, the lowest since early April.
London Brent crude [GB@IB.1 97.49
With rates falling (as of yesterday the Conforming 30-year FRM was 6.03%, down from 6.34% on Friday), now is a great time to run the numbers and calculate if refinancing your mortgage can benefit you. With our Refinance Calculator it’s important to know the real costs — and potential savings — before making a move.
With this easy-to-use, interactive refinancing worksheet, consumers can see how their existing mortgage payments might change if they were to refinance, and, just as important, how long it would take to recover any closing costs associated with refinancing.
Oil prices were relatively unchanged this morning despite OPEC’s announcement yesterday that they were trimming daily production by 500,000 barrels. Just as we had predicted, OPEC’s modest trim had no immediate effect on rising prices. Oil producing countries have fresh memories of what record-setting gas prices did to consumer demand. While it’s highly likely that OPEC will do its best to keep oil prices from reaching July levels, they need to keep oil prices from dipping too much lower in order to maintain profits.
It will be a chess match between consumers and oil-producing countries to keep the price of oil at a level where both consumers will spend and producers can turn a steady profit. Maintaining the US’s dependence on oil will delay the production of alternative fuels and vehicles — good news for OPEC.
As we’ve seen throughout the day, mortgage rates are falling, and it seems likely they’ll fall further. The 30-year conforming fixed rate mortgage actually fell by almost a third of a percent to 6.04%. Of the changes that the bailout will bring to the mortgage market, lower rates are just the first. The full impact won’t be known for months, if not years.
As mortgage rates drop, or at least stabilize, hopefully buyers will be attracted to the housing market. What many potential buyers do not understand is that a better mortgage rate can save you more money in the long run than a cheaper ticket price on a home. Homebuying is a multi-month process, so rates will have to remain stable for some time to really make any improvement in the market. As far as falling home prices are concerned, only home buying can correct that scenario.
While no one is ready to call the bottom of the worst housing collapse in decades, there were glimmers this week that the severity could be waning.
Reports Tuesday showed the glut of newly built homes on the market fell to a five month low last month, while the decline in home prices is starting to ease, and in some cities values are even starting to rise. What’s more, existing home sales rose slightly from June to July, according to data Monday.
In a buyer’s world where advertisers thrive on convincing consumers that their products and services need to become a regimented part of their daily lives, the questions arise, “can these same advertisers persuade consumers to save their money instead of spend it? What can financial institutions learn from advertisers to convince their customers to put a little extra away for retirement?”
Initially, it seems practically impossible to reverse the in-grained mentality US consumers have to spend, spend, spend. Yet, even if you consider yourself a saver, our world is filled with an unlimited supply of things to buy; not to mention, when your government hands you $600, no questions asked, with the instruction to spend it in order to “save” the economy. We all know how that went.
HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.
