Economic News Week: November 29, 2010

As holiday shopping begins, retailers are expecting a better year than last year.  With the estimated 138 million shoppers out in force, Black Friday proved to be better already by .03%.   Many retailers  depend on the holiday shopping season to make their year: The November-December shopping season can account for up to 40 percent of retailers revenue and profits. We get to look forward to  “Cyber” Monday sales results next.

The nervousness in the markets has plagued the DOW.  However, the Dow did  maintain above 11,000 levels last Friday. European debt and the N Korea conflict have  been causing the nervousness of late.  China’s main planning agency said last Monday that Beijing has the capacity to control surging prices while keeping economy  growth in check. In America,  corporate profits   hit record highs this year expanding to $1.6 trillion.   Now,  corporate America  needs to shows us the ‘jobs’.  The economy expanded at a  2.5 percent annual rate in the July-September quarter; the Commerce reported. This was up  by a 2 percent pace initially estimated and better than the 1.7 percent growth rate in April-June of this year. So, things do look a little brighter this holiday shopping season.

Freddie Mac said last Wednesday that the average rate for 30 year fixed mortgage loans rose to 4.40% from 4.39% last week.  Not a huge increase for sure.  15 year fixed rates rose to 3.77% compared to 3.76% last week as well.  Now is a great time to buy or even refinance-if you haven’t done so already.  Here’s a few things to be prepared for when applying for a loan.  1. You must have good credit.  Find out you FICO score.  Anything in the 700’s is considered excellent, but that doesn’t mean you can not get a loan if your FICO score is lower (in the 640 range).  2. How much can you afford?  Most Lenders require a 45-50% max debt-to-income ratio.  3. How much down do I need?  This is a little trickier as most loans have different requirements.  FHA requires a 3.5% down payment, plus closing costs/escrows and  Conventional loans require at least  5%  down payment requirements as well.  VA and USDA Rural Property loans  only require that you pay the closing costs/escrows-making them a 100% loan.  4. Now,  find a local Realtor and Mortgage Loan  Officer and get the rest of the details from them.  They are there to work for you and make the buying (or refinancing) process an easy one.  With low mortgage rates and home prices remaining at lower levels, Christmas may have come a little earlier to some!

Finally,  I hope everyone enjoyed the festivities around San Antonio and the Texas Hill Country. this past week.  The tree lighting at the Alamo, Lights Spectacular in Johnson City, and Dickens on Main in Boerne to name just a few-were successes in anyone’s book.  And if attendance was a any sign of our local economy, then we don’t have to worry about the New Year’s economy either.  It is growing and that is another early Christmas present.

Economic Data due this week:
Tuesday: Home Price Index.  Tuesday: Consumer Confidence Report.  Wednesday: Retail Auto Sales report. Wednesday: ISM Index= A manufacturing report.  Wednesday: Beige Book= A survey of current economic conditions. Thursday: Pending Home sales.  Friday:  National Unemployment  report.