One day good news, one day bad news... such is the economic reality of our shakey recovery.  After yesterday's report of a solid 15% jump in housing starts in June, we have bad news on a different housing front. Existing homes sales fell 0.8% in June, well below the expected 2.9% increase as forecast by a Reuters poll of economists. The rate is a seven month low, and is particularly frustrating after May's strong "pending sales" index mark. Contract cancellations spiked up to 16%, well above May's 4% rate, which helps explain the slow down.

Mortgage rates today remain the same: 30 year fixed 4.250% (4.416% APR), 15 Year Fixed 3.250% (3.560% APR), 5 Year ARM 2.375% (2.541% APR), 30 Year Jumbo 4.250% (4.375% APR).

This week should be interesting, with reports to come detailing June housing starts and home sales. Earnings reports are due from some of USA's biggest companies. And lawmakers continue the debt ceiling debate. Look for the market to continue its volatile trend.

Central Coast Lending's mortgage rates: 30 year fixed 4.250% (4.416% APR), 15 Year Fixed 3.250% (3.560% APR), 5 Year ARM 2.375% (2.541% APR), 30 Year Jumbo 4.250% (4.375% APR).

After yesterday’s positivity, collapse. The better than expected weekly unemployment numbers caused optimist about today’s government June jobs report.  However, any hopes of strong gains were dashed, bringing about musings of a “double dip” in the recession.

The government reported that in June just 18,000 jobs were added, which increased the unemployment rate from 9.1% to 9.2%.  Stocks tumbled, with the Dow currently down 90.52 to 12,628.97. Although some analysts have counseled optimism (expected that such paltry growth figures would result in an even bigger sell off), there is widespread frustration with the numbers due to the expectations that the economy had made a firm steps toward improvement. Descriptors floating about the media includes: “shocking”, “stunning”, “horrific”, and “paltry.” 

As for larger implications to the economy, the question is – does job creation correlate with GDP growth?  Loosely, this is the case.  Job growth suggests that the economy is healthy and expanding.  Weak job growth, then, could be correlated with low spending and low production, and thus a low GDP (Gross Domestic Product – the market value of goods and services produced by a country, which is used to measure strength of economy).  On the other hand, the recovery is also influenced by low interest rates, a stronger Japan and lower gas prices. Unemployment is not the only factor to use in judging recovery, although as we have seen today in the market decline, it is viewed as central to the picture.

For our purposes at Central Coast Lending, such selloffs keep interest rates low. As investors flee the market, they invest in bonds, which have an inverse relation to interest rates (bond prices go up, interest rates go down).

For more on the report, see the following links:

CNBC

BLOOMBERG

  Here are Central Coast Lending's mortgage rates: 30 Year Fixed 4.250% (4.416 APR) 15 Year Fixed 3.375% (3.685% APR) 5 Year ARM 2.375% (2.541% APR) 30 Year Jumbo 4.250% (4.374% APR).

Central Coast Lending's mortgage rates are largely unchanged, with the only blip I slight increase in the 15-year fixed.

We have solid economic news today, with weekly jobless claims down 11,000 to beat the forecast of 3,000. The private sector added 157,000 jobs from May to June, significantly ahead of estimates. Chain retail stores reported higher than expected earnings in June.

As of this post, the Dow is up over 100 points to turn in another strong performance. With the exception of the beginning of the week, the market has seen solid gains for a two week period. Tomorrow, look for another jobs report.

Central Coast Lending's mortgage rates remain largely the same, with the exception of a slight drop in the 30 Year jumbo:

30 Year Fixed 4.250% (4.416% APR), 15 Year Fixed 3.375% (3.685% APR), 5 Year ARM 2.375% (2.541% APR), 30 Year Jumbo 4.250% (4.374% APR).

Stocks have continued to gain today, after yesterday's lull and last week's big rally. Currently, the Dow is up 0.35%, but with two and a half hours of trading left to go. Of note, the dollar index (a measure of the dollar's value against world currencies) has risen due to two key factors: 1) China has again increased interest rates to curb inflation on the back of steep grwoth. 2) Moody's downgraded Portugal's long term bond status to junk level, which brought about debt concern (which effected the Euro). 

We have employment numbers coming out the next few days, so stay tuned for what should be an eventful few days.

Central Coast Lending's mortgage rates remain the same over the long weekend. 30 Year Fixed 4.250% (4.416% APR) 15 Year Fixed 3.375% (3.685% APR) 5 Year ARM 2.375% (2.541% APR) 30 Year Jumbo 4.375% (4.499% APR). The mortgage market  

The Tribune featured an interesting profile about San Luis Obispo county tourism. According to the market research firm Dean Runyan Associates, San Luis Obispo brought in $1.1 billion in travel spending in 2009, yielding $69.8 million in local and state taxes. This spending created more than 15,500 jobs.

The economic downturn has resulted in a depressed tourism market - with less disposable income, folks are traveling less.  However, we could be seeing an uptick in visitors in local leisure and hospitality, which could mean a recovery for the tourism industry. The Tribune cites a report from Smith Travel Research, which provides data for the hotel industry, "Occupancy, average daily room rate and revenue per available room is up at hotel properties countywide through May compared to the previous year."

Link.