Vacation Tips to Protect Yourself, and Economic News

IN THIS ISSUE...

	Light in August! William Faulkner's 1932 novel Light in August explored the relationship between humans, habits, and facts. As we head into August 2012, we're still exploring those same themes--especially in light of the global economic concerns. From silver linings and negative news to consumer expectations and credit scores, the articles below can help shed light on what you need to know this summer. Read on for details about what it all means to you! Silver Linings...and Negative Signs – Not all the news was negative last month...but what does the news mean for home loan rates? Find out! What to Watch – How you doin'? Consumer expectations and feelings are important to monitor. Here's what you should watch. Vacation! – Before you get away, read this article and take advantage of these tips to protect yourself! Q&A: Credit Score? – Here's something you may not know about checking your credit score. Enjoy the articles below...and enjoy the end of summer. Remember, if you have any questions or would like to discuss your unique situation, call or email today. And please forward this newsletter to friends, family members and coworkers who may find this information helpful.

Silver Linings...Along with Some Negative Signs

	A number of economic reports released last month added to the uncertainty about our economic outlook. But the economic news wasn't all negative. For example, Housing Starts for June increased nearly 7% to reach the highest level of housing starts since October 2008. Since home builders don't start a house unless they are fairly confident it will sell upon its completion, if not before, changes in the rate of Housing Starts can tell us a lot about demand for homes and the construction outlook. And there was other news about the strengthening of the housing market. According to the Fannie Mae Monthly National Housing Survey, 35% of Americans believe home prices will increase in the next 12 months. As illustrated in this chart, this is the highest recorded level this survey has ever seen. Optimism about the housing market was also seen in several other areas as well. For example, 73% of respondents believe that now is a good time to buy, and 69% said that if they were going to move, they would buy. This represents a 6% increase from the May survey. Those numbers are important because Fannie Mae's monthly national consumer attitudinal survey report provides indicators offering a window into the opinions of Americans across the country. These behavioral insights convey what consumers think about the outlook for owning and renting a home and about their household finances. Despite those positive signs, we also saw some troubling reports released in July. For example, New Home Sales fell 8.4% in June; however, despite the drop, New Home Sales were still up 15.1% year-over-year. Looking beyond the housing market, we see that Retail Sales fell more than expected, while the NY State Manufacturing Index remains at relatively low levels. In addition, the National Association for Business Economics (NABE) reported that the outlook for job growth has fallen due to a weakening economy. The survey revealed that 23% of those polled in July think that US employment will rise over the next six months, down from 39% in April. Those negative reports increased the rumors about a recession. In fact, some well-respected economists believe we are either in a recession already or about to enter one. It is very tough to argue with this notion as the labor market and manufacturing numbers have rolled over in recent months, and those trends may continue lower in the face of so much uncertainty here and abroad.  So what does all of this mean for home loan rates? First, we must remember that recessions are deflationary (which would mean consumer prices would move lower). Second, we need to keep in mind that deflation is good for Bonds as the fixed interest payment to the end investor goes further if consumer prices are moving lower. So that means deflation is also good for home loan rates, as rates are tied to Mortgage Bonds. If the economic data continues to be weak, the Fed will likely do another round of Bond buying, known as Quantitative Easing or QE3. Remember that additional hints of QE3 could initially push Stock prices higher, shifting cash out of the Bond trade and hurting home loan rates in the process. I will continue to monitor the economic reports and the Fed closely over the coming weeks, as these stories continue to develop. The bottom line is that now continues to be a great time to purchase or refinance a home, as home loan rates continue to reach historic lows. Let me know if I can answer any questions at all for you or someone you know.

What to Watch: How You Doin'?

	One important factor of the economy is how consumers are feeling. After all, consumer spending accounts for two-thirds of the economy. So one report that we'll want to watch in the near future is the Consumer Sentiment Index report, which measures the attitudes and expectations of 500 consumers regarding present and future economic conditions. Why does it matter? The bottom line is that when consumers get nervous about the economic outlook, they tend to stop spending, which could lead to drops in other areas of the economy, such as Retail Sales, New Home Sales, and so on. On the flip side, the more confident consumers are about the economy and their own personal finances, the more likely they are to spend. That said, we need to remember that changes in consumer sentiment and retail sales don't move in tandem. But consumer attitudes are a good indication of what may happen in areas such as sales. What happened recently? Earlier in July, Consumer Sentiment hit the lowest level since December. Specifically, it was reported at 72.0. At the end of July, Consumer Sentiment climbed back a little bit to 72.3, but that number was still down from the 73.2 reading in June. When will it be released? The Consumer Sentiment Index is produced by the University of Michigan and has two monthly releases, a preliminary and final reading. The Preliminary Consumer Sentiment Index is scheduled for release at 9 a.m. (CT) on the second Friday of the month, and the Final Consumer Sentiment Index is scheduled for 9 a.m. (CT) on the fourth Friday of the month. I'll continue to monitor this important indicator and all the other major economic reports to see how they impact the markets and home loan rates. If you have any questions, please call or email.

Vacation...All I Ever Wanted!

	Summer is in full swing, and that means many people are taking summer getaways. But, the last thing you want to worry about is a financial loss that might occur as a result of a missed flight, an injury or illness, lost baggage, or any other unforeseen incident. To ensure your peace of mind while away from home, many companies provide several different types of traveler's protection plans to help ease the burden. Without insurance, a traveler can lose nonrefundable deposits and prepayments that can add up to hundreds, or even thousands, of dollars. A good, comprehensive travel insurance plan will often reimburse a traveler for all pre-paid, nonrefundable expenses for a covered loss. Here are some general types of coverage you may want to consider before heading out for this summer's vacation: Travel Arrangement Protection: This covers you in case of trip cancellation, interruption, or travel delays (these can include inclement weather, lost or stolen passports, quarantine, hijacking or natural disaster). Medical Protection: Just because you have health insurance at home, the moment you set foot on foreign soil or even set sail on a cruise, many health plans are considered null and void, so be sure you get travel medical protection to cover emergency medical expenses, such as illness and accident expenses, and emergency medical transportation to the nearest medical facility. Baggage Protection: Not only do you want coverage for lost, stolen or damaged baggage, but many plans offer reimbursement for the purchase of essential items if baggage is delayed. Worldwide Emergency Assistance: If traveling outside of the country, make sure you purchase a policy that covers international emergencies. This can include emergency cash transfer assistance, legal assistance, and lost travel documents assistance. The cost of travel insurance is based, in most cases, on the value of the trip and the age of the traveler. Typically, the cost is 5-7 percent of the trip cost. Like most every other type of insurance, be it automobile, medical, or homeowner's, you hope you never need to use it. But it can be a relief to have it when you do need it. The bottom line is: Before embarking on your next trip, do your homework! Talk to your insurance agent and learn more about all the different insurance options available to you, so you can make the best choice for your peace of mind!

Q&A: Credit Score?

	QUESTION: How should you check your credit score? ANSWER: Your credit score can affect your ability to get a job, a cell phone, rent an apartment, how much you pay for insurance or even opening a bank account. So checking it is important. The problem is, there are actually different credit bureaus and reports--and they're not all the same. In a recent article, Steve White (President and CEO of American Credit) stated that "the score used by major lenders and about 90 of the top 100 financial institutions in the US is the FICO® score." According to Mr. White, the best place to get your FICO® score is straight from the company at myFICO.com. That said, if you have applied for a loan, you can just ask your lender to give a copy to you.

	The material contained in this newsletter has been prepared by an independent third-party provider. The material provided is for informational and educational purposes only and should not be construed as investment, financial, real estate and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.  As your Trusted Advisor, I always want to make sure you are clear on all details of the home financing process. If you or someone you know are interested in purchasing or refinancing a home, give me a call today! Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. Mortgage Success Source, LLC does not grant to the recipient or distributor a license to any content, features or materials in this email. You may not distribute, download, or save a copy of any of the content except as otherwise provided in our Terms and Conditions of Membership, for any purpose.