Final Financial Update/ Week of August 17, 2009

Good Morning Everyone and Happy Friday! Well, it’s a happy Friday if you’re hoping your 401(k) is going to climb a little bit higher. Yesterday we pointed out how the stock market is exactly even for the week, and going into the final trading day, stocks break higher and credit instruments are selling off.

Stocks are hoppin’ today on good news from July existing home sales report. Annualized sales hit 5.2 million in July, higher than the 5.0 million anticipated. This number is up from 4.9 million in June, giving us a 7.2% increase month over month – the biggest jump in 10 years. Admittedly, these sales are at the shallow end of the real estate pool with investors and first time home buyers scooping up properties at foreclosed prices. The stimulus for the FTHB is the tax credit offered by the Gov’t which runs out this Fall, so this pace is going to be hard to sustain. Also, these sales at incredibly low prices (many sales are being reported around the country of less than $50K) are bound to have a negative affect on average home prices. This is not necessarily a good thing for our industry, but we do need to get rid of the inventory.

The unemployment numbers for individual states came out this morning and California leads the nation in volume. CA lost over 35,000 jobs last month, which is the most of any state in total job losses. The unemployment rate jumped from 11.2 to 11.9 -- #4 in the nation in that category. Not really one of those awards we want to win.

Prices on the rate sheet this morning are about the same as they were yesterday. We’re within 2 bps in most cases on any given note rate on the 30 year conforming product. We know investors were leaving a little room in case something like this happened, so thankfully, with such a big move in credit markets today, we are seeing little move in rates. Take a peek at our 5/1 ARM on our conforming product . . . 3.875% is giving back a rebate of (.338) . . . pretty good.

I’ll be in the office all day today. If you need me, call me here or email me and I’ll do my best to help you. Have a terrific Friday and a very restful and relaxing weekend!