NEWS ALERT

NEWS ALERT
The California Association of Realtors will issue its June market report on Tuesday (7/25) and I expect it will be similar in tone to last week's assessments from DataQuick Information Systems and the Southland Regional Association of Realtors.
Median price increases will mostly be in single digits and a few areas could fall below levels.
Sales will be well under June 2005. Inventory will be well above a year- ago.
The bottom line: The good news for potential buyers continues.
RATE WATCH
Two big rate trackers crunched last weeks numbers and here's their take.
First the Web suite bankrate.com
MORTGAGES
Rate: 6.89 percent (30-year fixed) Average Points: 0.3 ...
HOME EQUITY PRODUCTS
Rates: 8.23 percent (line of credit); 7.87 percent (loan) ...
AUTO LOANS
Rates: 7.96 percent (60-month, new car); 8.91 percent (36-month, used car)...
CERTIFICATES OF DEPOSIT
Yields: 3.80 percent (1-year CD yield); 4.28 percent (5-year CD yield)...
CREDIT CARDS
Rates: 13.08 percent (standard fixed); 14.64 percent (standard variable)...

And here is HSH Associates Market Trends snapshot.
The biggest tracker of mortgage information found that rates eased back a bit last week averaging 6.88 percent, down .03 points from the prior week, for the a 30-year fixed rate home loan. The rate for a 15-year loan averaged 6.53 percent and the one-year adjustable was 6.15 percent.
Average rates were slightly higher in California: 6.93 percent for the 30-year, 6.58 for the 15-year and 6.18 for the one-year adjustable.
The company notes that the Fed has been on a rate hike warpath with 17 consecutive increases, in its battle with inflation.
But inflation is still powering ahead. The next Fed meeting is Aug. 8 and it was thought another rate hike is likely. But last Wednesday Fed Chairman Ben Bernanke told Congress the Fed is not convinced another rate hike is warranted. And some of those earlier rate hikes are starting to slow economic growth in some sectors, like housing construction, HSH noted.
Here's their take.
Two related but time-gapped arcs are at play.
The first is growth. Ultra-low interest rates goosed it to life several years ago and then it was propelled by cheap money. It climbed the first third of a rainbow arc over a couple of years, and powered through the second portion in a hot streak over the past year or two, and is now entering the third stage, one with rather a more downward trajectory (and hopefully slowing its momentum as it does).
Inflation is the second arc. It had a later beginning, when in trying to stave off deflation and boost growth, the Fed (and other central banks) flooded the economy with cash and low interest rates. After starting sluggishly, this arc too -- now probably well into its second stage -- seems to still be on an upward trend, with higher inflation readings now and more still likely to come for a time.
The question is: When will this arc hit its third section, where inflation has peaked and begun to dwindle? The answer will depend upon how quickly and how far the first arc travels, the company reasons.
“In order to get the inflation arc to reach and pass its apex, we'll need the growth arc to move past - maybe well past - its own. Growth will likely need to be substandard for a while, perhaps well below the Fed's forecast of 3.25% GDP for 2006 in order to exert meaningful influence on the inflation arc. As well, this will require patience by investors in the face of what could be at times unpleasant inflation news, and a steady hand on the part of the Federal Reserve to not overdo monetary tightening,� the company said in it's analysis.
The bottom line: It will all play out in the months ahead.