Been waiting all week to hear what Syd Leibovitch has to say about the economic update? Well your wait is over, friends.  Here’s the latest in his weekly installments!

Average US rate on 30-year mortgage eases to 4.20 percent; 15-year loan at 3.36 percent.

Average long-term U.S. mortgage rates declined slightly this week, after marking their largest one-week gain of the year the previous week. Mortgage company Freddie Mac said Thursday that the nationwide average for a 30-year loan eased to 4.20 percent from 4.23 percent last week. The average for a 15-year mortgage, a popular choice for people who are refinancing, slipped to 3.36 percent from 3.37 percent. At4.20 percent, the rate on a 30-year mortgage is down from 4.53 percent at the start of the year. Rates have fallen even though the Federal Reserve has been trimming its monthly bond purchases, which are intended to keep long-term borrowing rates low. The purchases are set to end next month.
Fewer Americans bought homes in August, as investors retreated from real estate and first-time buyers remained scarce, data released Monday by the National Association of Realtors showed. The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee for a 15-year mortgage also remained at 0.5 point.
The average rate on a five-year adjustable-rate mortgage rose to 3.08 percent from 3.06 percent. The fee declined to 0.4 point from 0.5 point. For a one-year ARM, the average rate was unchanged at 2.43 percent. The fee held at 0.4 point.
California unemployment rate holds steady in August at 7.4 percent; state adds 44,200 nonfarm jobs.  California’s unemployment rate was unchanged for a third month, holding at 7.4 percent in August. Thestate added 44,200 nonfarm jobs during the month, bringing the total to 15.5 million, the California Employment Development Department reported.  Last month’s gains mean the state has added slightly more than 1.4 million jobs since February 2010, when the jobless number hit a peak of 12.4 percent. The national unemployment rate dropped to 6.1 percent.
In California, the construction sector posted the largest increase month over the month, adding 13,600 jobs. Manufacturing, financial activities, business services, education, health, leisure and government also added jobs in August. Trade, transportation and utilities, along with information, posted losses totaling 8,300 jobs for the month.
The state also reported that new and continuing unemployment claims are down. There were 411,005 people receiving unemployment checks last month, compared to 426,224 in July. Unemployment rates continue to vary greatly by region. Marin County has a statewide low jobless rate of 4.2 percent, while Imperial County has the highest unemployment rate at 25. 1 percent.  Overall, the number of unemployed Californians rose by 1,000 over the month to nearly 1.4 million. The total is 287,000 less than in August 2013.
Jobless claims rise but stay near pre-recession levels. The number of Americans filing new claims for unemployment benefits rose less than expected last week, suggesting an acceleration in job growth in September.  Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 293,000 for the week ended Sept. 20, the Labor Department said on Thursday. Claims for the prior week were revised to show 1,000 more applications received than previously reported. Economists polled by Reuters had forecast claims rising to 300,000 last week. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 1,250 to 293,500.
Claims are hovering near their pre-recession levels, an indication that labor market conditions are tightening despite August’s sharp slowdown in job growth. The jobless claims report showed the number of people still receiving benefits after an initial week of aid edged up 7,000 to 2.44 million in the week ended Sept. 13.
The data for the so-called continuing claims covered the household survey week from which the unemployment rate for September will be calculated. Continuing claims fell 89,000 between the August and September survey weeks, suggesting some improvement in the unemployment rate. The jobless rate was at 6.1 percent in August.
Freddie Mac today released its newly updated Multi-Indicator Market Index showing the U.S. housing market struggling to keep stable momentum as housing prices continue to moderate and purchase applications fall. The slight decline in the national MiMi value this month appears to be broad-based, and not concentrated in a handful of state or metro markets.
They didn’t notice a large decline in any one market this month, but more of softening across the board. Even the MiMi top ranked state and metro markets all saw a slight decline except for Austin. But the real drag on the most market’s housing recovery continues to be the lack of purchase application activity. Even the hot housing markets in the northwest which are back in their stable range of housing activity are seeing their purchase application activity slow.
The one area where momentum hasn’t slowed is among the hardest hit markets. Places like Las Vegas, Miami, Chicago and Riverside, among others, are still showing double-digit yearly improvements, but that’s largely a reflection of significant gains in the local employment picture as well as a real improvement in borrowers making timely mortgage payments.  The stock market on Thursday posted its steepest drop in nearly two months, extending a volatile trading stretch on worries over Russian political tensions and the troubled launch of Apple’s latest iPhones.

 Stocks fall this week across the board. The Dow closed this week at 17,113.15 down from last Friday’s close of  17,279.74.  The S&P closed lower this week at  1,982.85  down from last Friday’s close of 2,010.40. The Nasdaq finishes down this week as well closing at 4,512.19  down from last Friday’s close of 4,579.79. We saw a large drop on Thursday followed by a rebound Friday. Thursday’s drop was blamed on global tensions. Apple contributed to the drop, as they announced problems with their operating system, bending of their new phone, and that their cloud system was hacked.
Data Quick real estate news: In August there were 37,228 homes and condos sold in California according to public records . That was down 6% from 39,608 in July and down 12.5% from last August. The state wide median price was $393,000, up 3% from $392,000 in July and up 8.9% from last August. August marked the 30th consecutive month of month over month price increases.
Foreclosures made up 5.4% of all sales in August. That was down from 5.6% of all homes sold in July and down from 7.8% of homes sold  last AugustForeclosure sales peaked at 58.8% of all sales in February 2009.
Short sales accounted for 6% of all homes sold compared to 7.8% one year ago.  We are seeing a pick-up in our market place after some slowing in July and August.  I would not be surprised to see October’s numbers show a substantial increase on both the number of homes closed and the median price year over year increase from what we saw in August, as these homes begin to close.  Perhaps we won’t see an increase in the year over year number of sales, but we should see a much smaller year over year drop than we saw in August. The ultra-high end is “out of control”! We have seen sales 20% higher than just one year ago on some homes that have recently sold! There is no end in sight.

Have a great weekend!

Syd


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