“A leader, once convinced that a particular course of action is the right one, must…

be undaunted when the going gets tough.” 

– Ronald Reagan

MARKET NEWS

Federal Reserve Bank of Philadelphia’s general economic index unexpectedly plunged to minus 30.7 this month, the lowest since March 2009, from 3.2 in July , and all indicators show decline. New orders dropped to minus 26.8, the lowest since March 2009, and shipments decreased to minus 13.9, the weakest since May 2009. The index of prices paid fell to 12.8 from 25.1, prices received dropped to minus 9 from 1.1, employment index decreased to minus 5.2, and the average workweek slumped to minus 14.4 in January from minus 5.4.

Jobless claims climbed by 9,000 to 408,000, the highest in a month, and continuing claims by 7,000 to 3.7mm for the week ended Aug. 6. The 4-week moving average was 402,500, a decrease of 3,500 from the previous week’s revised average of 406,000.

Treasury Yields Tumble Amid Concern Worldwide Economic Growth Is Slowing. Bond prices continued their rally reflecting anxiety related to European Bank, Global economic slowing, and a possible “double dip” of US Economic recession. The UST yield curve continues to flatten and could be a precursor to an inverted yield curve, which typically signals a recession is looming. Ten-year note yields dropped 16bp to 2.01% as of 10:09 AM EST.

U.S. Consumers Most Negative Since Recession Consumer confidence in the U.S. economic outlook slumped in August to the lowest level since the recession, raising the risk that spending will dry up.

TIGHTENING OF CREDIT STILL SHUTS MANY BUYERS OUT

The majority of renters – 73 percent – who live in single-family homes say that the challenges of getting a home mortgage is one of the main culprits keeping them from home ownership. About 33 percent point to their credit history as posing the biggest challenge in qualifying for a mortgage, while others are concerned about the tightening of credit that make it too difficult to qualify in general, according to the latest Fannie Mae National Housing Survey.

Concerns about obtaining financing and growing concerns over the economy continue to plague the housing market, the survey finds.

“Consumers are more cautious due to concerns over employment and household finances,” says Doug Duncan, chief economist of Fannie Mae. “As a result, consumer spending, which accounts for about 70 percent of the economy, ground to a halt in the second quarter. Consumers are more hesitant to take on additional financial commitments, and a setback to confidence means a setback to the recovery of the housing market.”

Renters, however, seem to be getting the message that home ownership still makes more financial sense. Only 23 percent of renters living in single family homes said that renting makes more sense than buying a home.

But besides the tightening of credit, concerns over employment is also keeping many out of the market. “Dissatisfaction about the direction of the economy and related employment fears are damping demand to buy homes and slowing the recovery,” Duncan says. “People who believe owning is a better deal than renting are nonetheless planning to rent, at least until things improve.”

THE REAL ESTATE BOOK LAUNCHES MOBILE PROPERTY SEARCH TOOLS

Real estate information publisher The Real Estate Book has launched a mobile version of its property search site, according to parent company Network Communications Inc.

The mobile site is compatible with any smartphone, including those using the Blackberry, Android or iPhone platforms. The Real Estate Book also rolled out a free mobile application specifically for the Apple iPhone.

The Real Estate Book offers millions of listings in about two dozen countries, including the U.S., Canada and the Caribbean, according to its website.

Network Communications Inc. also announced management changes: Fulton Collins was named interim CEO and Gerry Parker was named president after Dan McCarthy, who had been CEO for nine years, resigned. The company will retain an independent search firm to find McCarthy’s permanent replacement, the company announced.

SHADOW INVENTORY FALLS, EXPECTED TO CONTINUE

Standard & Poor;s estimates that it would take nearly four years – or 47 months – for the housing market to work through its shadow inventory at the current rate. While that number is still high, it marks an improvement over S&P’s first quarter report that had estimated 52 months.

Shadow inventory represents homes that are in the foreclosure system but haven’t hit the market yet. S&P defines shadow inventory as foreclosure and REO properties in 90-day delinquency or worse.

“In conjunction with stable liquidation rates, we believe these are positive signs that the amount of time it will take to clear this ‘shadow inventory’ should continue to decline over the next year,” S&P analysts said.

Delays from mortgage servicers in processing foreclosures likely will cause more than 1 million foreclosures to be postponed until next year, RealtyTrac recently reported.

As such, “the shadow inventory will continue to jeopardize the housing market’s recovery until servicers are able to improve liquidation times,” S&P said. “However, if and when that happens, an influx of homes will likely enter the market, increasing supply and driving prices down further.”

Shadow inventories are largest in New York, where S&P estimates it will take 144 months – or 12 years – to work through foreclosure properties at the current rate. That is down slightly from 146 months in the first quarter.