Recovery Slows, Housing Opportunity Grows

Phil Jensen Mortgage Director AmeriFirst Financial Phone: 602-692-7445 Fax: Phil@JensenTeam.com Phoenix Mortgage AZ Homes for Sale Arizona Home Loans Houses for sale AZ Phoenix Homes Arizona Homes for Sale Arizona Schools

In This Issue...           Last Week in Review: Volatility was extremely high... but the bottom line is a tremendous opportunity. Read the details below! Forecast for the Week: Go beyond economic reports! Find out what to watch and why. View: Know a college student who graduated or will soon? Here are 10 great gift ideas you may never have considered!           Last Week in Review           "SLOW DOWN... YOU MOVE TOO FAST." Maybe the economic recovery is taking acue from these 1960's lyrics by Simon and Garfunkel, as the economic recovery seems to be in a sluggish state at the moment. And while it doesn't leave too many Americans "feelin' groovy," there are some amazing opportunities at hand in housing. Here's what you need to know about the economy and housing industry - along with one sure thing about the current situation. Volatility was extremely high last week - not just in the financial markets, but also in the economic reports and economic outlook. The big news of the week was the official Jobs Report, which came in well below expectations. In fact, in the private sector alone, the report indicated that only 83,000 jobs were created in May - and that number was almost 100,000 less than expected! Although the Hourly Earnings component of the report came in a little better than expected, the overall report was just plain bad. Even for a market hungry for good news, there was no way to spin this report. Now the markets will have to wait and see if this was a one-off bad report and just a bump in the road to recovery... or if things have indeed slowed down once again. Manufacturing slowing? New data on the manufacturing sector of the economy also indicated a possible slowdown, as the Chicago PMI and the ISM Index - which both measure manufacturing - came in below expectations. Rumors of a bailout lower the US Dollar. In news across the pond, reports came out last week that Germany is putting together a plan to bailout Greece. The plan would "kick the can down the road" a little longer for Greece, allowing them more time to figure out a strategy to get their debt in order. As a result of these bailout hopes, the Euro was strengthened and the US Dollar dipped lower. Remember, a softer US Dollar helps US Stocks, as US companies benefit from stronger exports with a weakening Dollar. But a lower Dollar isn't so good for Bonds, so this news stalled the rise of Bonds early last week. Home prices still very affordable. Moving from Europe back home to the US, we also received new data last week on home prices across the country. According to the 20-city Case-Shiller Home Price Index, prices were down 0.8% in March. Overall, foreclosures and bank-owned sales continue to weigh on housing - and are expected to do so for a couple more quarters. That said, the housing market is very localized, so only a local real estate professional can help you understand where home prices are at in your community - let me know if you need a referral to someone great in your area. One thing's for sure... If you or someone you know is considering purchasing a home or refinancing, this is an ideal time to see how you can benefit from the current market conditions. Home prices are extremely affordable right now and home loan rates are near historic lows. It only takes a few minutes to look at some options that fit your unique goals and situation. Call or email today to see how you can benefit from the current situation!           Forecast for the Week           After last week's volatility, the markets receive a bit of a reprieve - with no major reports due out until mid-week. Here are some reports to watch, followed by some news items that may impact Bonds and home loan rates in the days ahead: The Fed's Beige Book will be released on Wednesday. The Beige Book contains anecdotal information on the current economic and business conditions. Although some people consider the Beige Book to be a lagging report, it can serve as a helpful indicator of the Fed's policy decisions. It reflects data from bank reports, as well as interviews with key business contacts, economists, market experts, and other sources. After the volatility and negative news last week, this report will be as important as ever. The Jobless Claims report comes out Thursday. Last week, Initial Jobless Claims were within expectations, so it wasn't a horrible reading. That said, the disappointing Jobs Report demonstrates that employment is definitely still a concern, so the markets will be watching the Jobless Claims report closely this Thursday. Also on Thursday, we'll see the Balance of Trade report, which focuses on exports and imports. Remember, a negative balance of trade - or a deficit - occurs when imports surpass exports. Rising deficits can be reflective of increased consumption, which can be a sign of a strengthening economy. But don't let the slow week of economic reports fool you. With just a few economic reports to digest and the earnings season over, the Bond markets will take their cue from how the Stocks markets move. Soft economic data has put a dent in Stock prices in the past month, so investors may be leery to commit any new funds into the equity markets and could support Bonds. However, the Bond markets will have to contend with $66 Billion in Notes and Bonds to be offered by the Treasury - and the auctions could weigh on Bonds and home loan prices. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Mortgage Bonds and home loan rates have benefited from weak economic data the last couple of weeks. That makes now a great time to purchase a home or refinance. Call or email to see some options that may pleasantly surprise you. Chart: Fannie Mae 4.0% Mortgage Bond (Friday Jun 03, 2011)           The Mortgage Market Guide View...

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