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August 17, 2012

Week in review: August 13 – 17

by Rylan Stewart

We apologize for the lack of market and financial news this week. We focused our efforts on a few feature pieces that discussed the “state of the mortgage industry” and profiled the local real estate market. We will recap this work and then update you on the market news/movement over the past five days.

SLO County Real Estate:

The Mortgage Process Explained

Mortgage News

Now on to the market news…

  • The Dow ended the week at 13,275.20, which is over 50 points above last Friday’s close. It was a busy week for economic data, and the reports came back mixed.
  • July retail sales – rose 0.8 percent after June’s dive. A welcome show of strength.
  • July producer price index (PPI) – the measure of inflation rose 0.3 percent from June, and 0.5 percent year-over-year, which is the lowest percentage since October 2009.
  • July business inventory/sales – inventory rose 0.1 percent and sales dropped 1.1 percent. The inventory/sales ratio rose to 1.29, highest in 2.5 years, an unwanted number and likely sign that the GDP growth will remain sluggish.
  • July consumer price index (cost of living metric and the most followed indicator of inflation) – stayed flat month-over-month and is up 1.7 percent year-over-year. Decline in airfare, vehicle, and transportation prices caused the monthly decline.
  • July industrial production – rose 0.6 percent
  • The four-week average for weekly jobless claims – fell over 5,000 to 363,750, the lowest since March earlier this year, which was the lowest of the recovery.

Real Estate statistics:

  •  Mortgage applications fell last week for both purchase (-2.0 percent) and refinance (-5.0 percent)
  • July housing starts declined slightly, but building permits, a better measure of long-term stability, grew 6.8 percent from the previous month.
  • Shadow inventory – not so much a problem? The Wall Street Journal Developments blog wrote about the so-called “shadow inventory” of homes in foreclosure or at high risk of entering foreclosure (three months delinquent by some measures) and why this “problem” has been overstated in the media.

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