The View From The Golden Dome

Views on the week's events plus some of mine.

Independence Day Special – Les Berman Weekly 7-4


What a week – again. Great tennis with Petra Kvitova and Novak Djokovic taking Wimbledon. And Carmageddon on the very near horizon. That’s it – a shortened commentary this week. This is the best Independence Day video of the year. Please take 3 minutes and watch this.

BERMAN’S FACTOIDS OF THE WEEK

Australia has a robot that shears sheep; Japan has one that makes sushi.

“I put a dollar in the change machine. Nothing changed !” – George Carlin

 

 

Les Berman, CMC spacer.gif
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Les Berman, CMC
Senior Mortgage Advisor
NMLS ID # 227675
First California Mortgage
Office: 310-271-1588
Mobile: 818-305-4695
Fax: 877-707-8823
Email: lberman@firstcal.net 
Website: www.firstcal.net/berman
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For the Month of July 2011 — Vol. 6, Issue 7
IN THIS ISSUE…
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“Up…Up…and Away?” Don’t look now, but a couple of important economic indicators showed signs of heading up. Unfortunately, that presents some mixed news – especially since one of those indicators concerns inflation. The articles below explain what happened and what it means to you. Plus, don’t miss the summer links below that can help you whether you hit the road or head up, up, and away in a plane this summer.

If you have any questions or would like to discuss your unique situation, call 818.305.4695 or email today. And please forward this newsletter to friends, family members and coworkers who may find the information helpful.

 

Home Prices Head Up, But So Does Inflation
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Late last month, the housing industry received somewhat good news when home prices experienced the first monthly rise in 8 months, according to the Case-Shiller Home Price Index of 20 cities. While that’s a nice tidbit of news, we need to remember that home prices are still down 4% overall when you look at the year-over-year number. The persistently high unemployment is weighing on the housing recovery, but we do expect more improvement for housing during the second half of 2011…and this is a start.

That said, home prices and unemployment aren’t the only indicators that we need to keep an eye on. Last month, the Federal Reserve Board received some disturbing news about inflation when the Core Personal Consumption Expenditure (PCE) Index was released. The report is considered the Fed’s favorite gauge of inflation, and it came in slightly hotter than expected.

That should raise the eyebrows of the Fed as it appears that some of the manufacturing sector’s rising costs are being passed along to consumers. Remember, inflation is the archenemy of Bonds, and therefore it’s bad news for home loan rates. So, should this trend of higher inflation continue in months ahead, we should expect home loan rates to move higher as well.

What does this mean for the markets and home loan rates in the short- and long-term?

Here’s a visual that will help explain things. Imagine a child playing with a yo-yo riding on an escalator. If Bond prices are the yo-yo, you can see how they would be moving up and down like the action of the yo-yo in the short term. And this is what we are seeing right now: Bond prices and home loan rates are moving day to day in a somewhat volatile up-and-down fashion. But, like the boy on the escalator, they continue to move in an improving direction. Eventually, however, the child will reach the end of the escalator; Bonds and home loan rates will eventually reach the end of their improving trend, especially when inflation fears become reality. And when they do they will likely worsen quickly, as history attests.

Right now, home loan rates still remain near some of the best levels we’ve seen this year, and it’s important to take advantage of these levels while they remain. If you have been thinking about purchasing a home or refinancing, call me at 818.305.4695 or email me to learn more about why now is a great time to benefit from today’s historically low rates. Or forward this newsletter on to someone you know who may benefit. 

 

Hitting the Road – or Air – This Summer!
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july11_02.jpgSummer is officially here, and there are plenty of ways your family can have fun in the sun, while also staying safe and healthy! Whatever plans your family has in store…in addition to enjoying the traditional baseball, hotdogs, and apple pie…here are some great websites that can help.

Plan Your Road Route: Taking a road trip this year with the family? There are a number of websites such as www.mapquest.com and maps.google.com that can help you plan your route. So make sure you take a few minutes to plan your drive and print out any directions that you may need.

Fly Smarter : For the latest information on prohibited items, acceptable IDs, and other security-related items, visit www.tsa.gov/travelers/airtravel.

Weather Watch : Whether you’re travelling by road or air, you’ll want to keep an eye on www.weather.com. Not only does this site help you discover the weather of your final destination, it also helps you keep an eye on how the weather is impacting airports across the country.

Beach Vacations: No matter what part of the US you may be visiting, you can bet there’s a state nearby that boasts about its beaches. Some have oceans while others have gulfs, bays, rivers, lakes or reservoirs. Whatever form the water takes, adventures and sports of all types can be found. Just click on the following link and then click on the state of your choice in the map at the top of the page: http://www.chiff.com/recreation/beaches/USA.htm

Staying Connected : You may find that you’d like to logon and catch up with family, friends, and co-workers through email or social media sites. But where can you find Internet access? Luckily, you can discover where you can get free wireless Internet access while you’re on the road this summer at www.wififreespot.com.

Regardless of whether you already have big plans this summer or are still looking for a short vacation to take, spend a few minutes to review the links above…or consider printing this article and placing it in your vacation plans.

 

Q&A: To Pre-pay or Not to Pre-pay?
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QUESTION: Should I pre-pay my mortgage?

ANSWER: Another way to put this question would be to ask yourself: Would you rather be house rich and cash poor? Or house poor and cash rich in this current economic environment?

Here’s some information to consider.
 Home equity accumulates in four ways: the money committed in the original down-payment; any appreciation in the local housing market over time; physical improvements or renovations; and, of course, principal payments on the mortgage itself.

While seemingly desirable on its face, this accumulation of wealth in the home has some consequences that you should keep in mind. 

First, the cash in your home is “buried.” Not only is it unavailable in the event of a family emergency, it is vulnerable to loss due to periodic downturns in housing values, fire, or natural disasters such as hurricanes (insurance, where available, may not cover the full market value of your home). Perhaps more critical, cash trapped in property is earning zero interest, year after year. No prudent consumer would put money into a savings account or investment plan that yields no rate of return, but many homeowners do exactly that without a second thought when it comes to their mortgage.

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Equal Housing Lender          
The material contained in this newsletter has been prepared by an independent third-party provider. The material provided is for informational and educational purposes only and should not be construed as investment, financial, real estate and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.

As your Trusted Advisor, I always want to make sure you are clear on all details of the home financing process. If you or someone you know are interested in purchasing or refinancing a home, give me a call today 818.305.4695!

 

First California Mortgage
Provided to you Exclusively
By
Les Berman CMC
Les Berman CMC
Senior Mortgage Advisor
NMLS ID # 227675
First California Mortgage
Office: 310-271-1588
Cell: 818-305-4695
Fax: 877-707-8823
E-Mail: lberman@firstcal.net 
Website: www.firstcal.net/berman
Les Berman CMC
For the week of Jul 04, 2011 — Vol. 9, Issue 27
In This Issue… sym_arrow.gif
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check out the fun facts below about America.
The Les Berman Weekly View… sym_arrow.gif
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As we celebrate the founding of the United States, it’s an ideal time to reflect on some fun facts from the US Census Bureau.

America Then and Now

The number of people living in the newly created United States back in July 1776 totaled 2.5 Million people. This 4th of July, the number of people living in the US is estimated at 311.7 Million.

Flags Unfurled

Did you know that $3.2 Million worth of American flags were imported in 2010? Perhaps more surprising is that $486,026 worth of American flags were exported, with Mexico being the leading customer of those flags.

Rockets’ Red Glare

More than $230 Million worth of fireworks and pyrotechnics are shipped by US manufacturers each year.

Lady Liberty

More than 31 places have the word “Liberty” in their names; the most populous is Liberty, Missouri with nearly 30,000 people.

Patriot-ism

Unlike the word “Liberty,” the word “Patriot” is rare in town or city names. In fact, according to the Census Bureau, there’s only one place with the word “Patriot” in its name, and that’s Patriot, Indiana, with 209 residents.

Best wishes to you on this special time of summer. And please contact me if I can be of any help.

Economic Calendar for the Week of July 04 – July 08

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Wed. July 06
10:00
ISM Services Index
Jun
54.0
54.6
Moderate
Thu. July 07
08:15
ADP National Employment Report
Jun
60K
38K
HIGH
Thu. July 07
08:30
Jobless Claims (Initial)
7/02
425K
428K
Moderate
Fri. July 08
08:30
Non-farm Payrolls
Jun
80K
54K
HIGH
Fri. July 08
08:30
Unemployment Rate
Jun
9.1%
9.1%
HIGH
Fri. July 08
08:30
Average Work Week
Jun
34.4
34.4
HIGH
Fri. July 08
08:30
Hourly Earnings
Jun
0.2%
0.3%
HIGH
The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.
As your trusted advisor, I am sending you the LES BERMAN WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

 

 

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July 4, 2011 - Posted by | Uncategorized

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