The National Association of Realty’s pending home sales index outperformed expectations in May, rising 5.9 percent. The NAR index tracks signed contracts for existing home sales. Economists had expected pending home sales to rise between -1.o percent and 4.0 percent.
Mortgage applications fell 7.1 percent from last week, with the biggest drop coming from a decline in refinance activity (-8.0 percent). Rates are still at record lows, but many eligible homeowners have already taken advantage of the refinance opportunity. Purchase applications fell 1.0 percent from the previous week.
The 20-city S&P/Case-Shiller home price index showed a 1.3 percent rise in home prices in April from March – a 0.7 percent improvement when adjusted for typical seasonal fluctuations. Year-over-year, the index still showed a decline of 1.9 percent.
Seventeen of the 20 cities in the index showed price strengthening, including positive growth in the West and Florida, two areas that have showed some of the largest declines since the housing bubble burst.
This week, we talk about the drop in oil prices, the recent Fed decision to extend Operation Twist, and what these recent developments mean for the market. Craig Darnell from Darnell Financial Planning stops by the show to talk about how and why he got into the business of financial planning.
The Dow fell over 150 points to begin the trading week. European debt issues in particular weighed on the market, and the increasing likelihood Spain will default on its debt due to unsustainable borrowing costs. The 10-year bond yield fell from 1.67 percent to 1.60 percent. Mortgage rates are flat and remain at the price levels we saw last week.
The Wall Street Journal reported this morning that gas prices declined for their 11th straight week. The average price of gas is now 3.53 a gallon. Typically, gas prices can act as a small kind of stimulus to consumers, as lower costs free up spending possibilities in other places. However, stagnant retail sales shows that consumers are not necessarily spending more and tentative consumer confidence numbers reflect a public that is still wary about the U.S. economy.
My former husband and I spoke with a PG&E technician twenty years ago about EMF’s (electromagnetic fields). We were concerned about the power source entering the house outside our young son’s bedroom. They agreed that electricity produced negative health effects, but the testing was inconclusive. We asked about the microwave oven. To be safe they suggested we stay at least 5-6 feet away while it is in operation. We moved the electrical source point to a rarely used room of the house and stood back from the microwave… just in case.
New home sales have jumped to their highest rate in two years.
The Commerce Department reported that new home sales in May rose 7.6 percent to a seasonally adjusted 369,000-unit annual pace. Compared to May 2011, the rate is up 19.8 percent.
New home sales make up a much smaller percent of the market. At an annual rate of 355,000 new home sales are just a fraction of market activity when compared to the existing rate (4.55 million).
Starts for new homes dropped recently, but permits for building increased. As we discussed last week, some decline in the volume of new home construction can be attributed to a lack of desirable building locations.
The new home sales report came after the National Association of Realtors reported last week that existing home sales had a month-over-month decline of 1.5 percent in May. Still, new home sales were still up yearly (9.6 percent), housing supply on the market was relatively down, and home prices showed strength (a rise of 7.9 percent), and we took this as evidence of further improvements in the housing market.
In May, the U.S. unemployment rate rose 0.1 percent to 8.2 percent. Several months ago, the rate ticked down to 8.0 percent, but has since had trouble adding enough jobs to drop the rate. May added just 69,000 jobs, well below the 158,000 expected by economists.
We don’t have much to add here, except to add some context with this quote in an article from CNBC’s Mark Koba:
“The lack of job growth in the U.S. should not be a surprise. Even before the Great Recession of 2007-2009, the number of jobs created tapered off significantly from the Internet boom in the 1990s, leaving the economy very little cushion when the downturn slammed the country with the loss of some 7.5 million jobs.”
We expect the recovery to continue with slow job growth. Once again, we see the overall trend as one of general improvement, even as month-to-month data slows. Without some sort of explosive sector in the economy to drive more robust job growth and a longer-term solution to Europe’s debt problem, companies will continue to add jobs at a slower rate.
Intestacy means dying without a written will. A person who dies without having created a will is said to have died intestate.
Many people die without leaving a will. Let’s say you have procrastinated setting up an appointment with your favorite estate planning attorney to create a will or a trust. Naturally, you may be wondering who will inherit your state by default if you’ve left no written instructions.
As I wrote about in a previous blog post, California law sets forth what I call a “default estate plan” for those who die without having a will. The default estate plan dictates who will inherit your estate by default. The people who would inherit your estate by default are your legal “heirs”. The default estate plan is sometimes a little hard to understand, especially if you don’t have very many close living relatives. I have created a simple tool that you can use to help determine who exactly is entitled to inherit your estate if you die without a will. Click this link (or click “Who Will Inherit My Estate?” in the sidebar to your upper left) to use this online tool.
I hope that this tool helps you better understand who your legal “heirs” are.
Bradley Liggett is an Estate Planning Attorney based in San Luis Obispo. You can contact him at (805) 203-0530 or [email protected] for a free consultation.
Indicators released by the National Association of Realtors (NAR) and the Federal Housing Finance Agency (FHFA) show that home prices are continuing to improve. At the same time, existing home sales dropped slightly month-over-month, but this can be explained by a corresponding fall in supply.
In April, FHFA home prices rose 0.8 percent, an encouraging showing after a 1.6 percent bump in March. From last year, the FHFA index is up 3.0 percent.
We had some technical difficulties when recording last Saturday’s show with guest Wes Burk from Patterson Realty, and unfortunately will be unable to post the show online. We apologize for any inconvenience. Tune in to Mortgage Matters this Saturday at 10 a.m. on KVEC 920- Craig Darnell will be on the show with us discussing financial planning.