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Robert Hernandez
NMLS :241292 Broker Lic.: 01935727
MBA, Hablo Espanol
Private Capital Ventures, Inc.
Phone: 650-776-3280
Fax 415-573-0930
  Home for the Holidays. Whether you're heading home or looking for a new home this time of year, the articles below can help make this season bright:
  • Sign of the Times? - The markets are looking for clarity from the Fed as housing and economic reports roll in.
  • What to Watch - Take a look at the broadest measure of the U.S. economy.
  • Fresh Ideas - Try these 3 unique decorating tips this season!
  • Q&A: Rates? - Find out how home loan rates have been trending!
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 the information helpful.
  A Sign of the Times?
  As we get ready to enter a new year, the markets are watching for signs that might indicate when the Fed will taper its Bond purchase program, known as Quantitative Easing.

Remember that the Fed has been purchasing $85 billion in Bonds and Treasuries each month to stimulate the economy and housing market. That includes Mortgage Bonds, to which home loan rates are tied.

Last month, likely incoming Federal Reserve Chairwoman Janet Yellen was on Capitol Hill for her confirmation hearing and she signaled that the Fed's current Bond purchase program will continue, as the economy is still running below its potential.

For example, the Empire State Manufacturing Index came in weaker than expected last month and it also revealed that labor market conditions are weak. The report backed up Yellen's statement in her prepared text at her confirmation hearing that, "Unemployment is down from a peak of 10 percent, but at 7.3 percent in October, it is still too high, reflecting a labor market and economy performing far short of their potential."

In housing news, Existing Home Sales for October fell due to a rise in home loan rates and housing prices. As you can see in the chart accompanying this article, that was the second month of declines. Similarly, Pending Home Sales declined by more than expected in October. The drop was due in part to declining affordability and higher home loan rates.

Finally, although the National Association of Home Builders' Housing Market Index remains in positive territory, it fell to the lowest level since June.

What does this mean?

Overall, the housing sector is fairly stable, but further improvements could be hindered if home loan rates continue to rise (see the Q&A article below for more on home loan rates).

One thing is clear: The Fed has said that economic reports will be a key factor regarding when it begins to taper its Bond purchases. Whether this will happen before or after the new year remains to be seen.

The bottom line is that now is a great time to consider a home purchase or refinance, as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions for you.
  What to Watch: Gross Domestic Product
  Although a variety of economic reports are released each month, one of the broadest measures of the U.S. economy is the Gross Domestic Product (GDP). That's why it's important to keep an eye on this report.

What is it? GDP measures the total production and consumption of goods and services in the U.S. GDP components like consumer spending, business and residential investments, and price (inflation) indexes illuminate the economy's behavior.

What happened last month? The first of three readings on third quarter GDP showed that the U.S. economy expanded well above expectations. The rise was due in part to a buildup in inventories, a pickup in trade, and increased spending by state and local governments. However within the report, consumer spending—which is the main driver of the U.S. economy—fell to the lowest rate in three years.

I'll be watching future releases of this report to see what it reveals about the economy and how it may impact home loan rates. If you have any questions, please call or email me.
  Freshen Up Your Winter Season
  Here are 3 unique decorating ideas that are easy to pull off and guaranteed to add a little something extra to your winter memories—without breaking your budget.

1. Jar to the World: Clear glass vessels are perfect for displaying collections of winter decorations. For a colorful display—no electricity required—fill your jar with old-fashioned incandescent light bulbs. Try another with spools of ribbon and peppermint sticks or even cranberries. Jars with lids can even be topped with artificial snow for a cool effect, even if real snow is nowhere in sight.

2. Winter Word-erland: If your Scrabble® game is collecting dust in the closet, you can use the trays and tiles to spell out winter-season messages, or use them as place cards for a gathering. Paint the trays in festive colors to give some pop to the tiles. If you don't want to chance ruining your set, sells replacement tiles and trays you can use exclusively for decorating.

3. Going Out on a Limb: If you don't have much room on your dining table, here's a unique idea. Suspend a bare tree-branch from the ceiling above the table using eye hooks and fishing wire, then hang winter-season decorations of various shapes and sizes from the branch. You can even spray paint the branch a special shade, such as red, silver or white.

Nearly all these ideas can be accomplished inexpensively with a trip to your local craft or discount home goods store. And if you keep your eyes peeled and ask around, you're sure to come up with additional ideas of your own!
  Q&A: Home Loan Rates?
  QUESTION: What's the trend with home loan rates?

ANSWER: Borrowing costs for homebuyers have been rising since May. But the good news is that rates are still lower than in August, when rates reached a two-year high and held close to that level through mid-September. So the bottom line is that home loan rates remain attractive compared to historical rates.

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