Mortgage Market Weekly – Update Jan 5, 2015

In This Issue…

Last Week in Review: The U.S. economy had a strong third quarter, while recent housing reports show signs of slowing in that sector.

Forecast for the Week: On Friday, the Jobs Report for December could be a market mover.

View: If you received new electronics over the holidays, see the tips below for selling, recycling or donating your old gadgets.

Last Week in Review 

“It’s a new dawn, it’s a new day…and I’m feeling good.” Nina Simone. The new year is here, and with home loan rates still near historic lows, 2015 rang in with plenty for consumers to feel good about. Here are some other highlights from the end of 2014.

existing-home-sales-2015-01-05 The final reading for Gross Domestic Product (GDP) for the third quarter of 2014 came in at a blistering 5.0 percent, the fastest pace of economic growth since the third quarter of 2003. The big gains were led by a surge in both consumer and business spending. GDP is considered the broadest measure of economic activity, so this is a strong sign for our economy heading into the new year.

In housing news, the October S&P/Case-Shiller Home Price Index came in at an annual rate of 4.5 percent, down from the 4.8 percent recorded in September. The October reading was the eleventh straight month of decelerating price gains. It was also the smallest annual gain since October 2012, as price gains return to more normal levels. Also of note, sales of new and existing homes fell in November as well. The housing market continues to remain in a somewhat choppy trend, despite an improving economy and job market.

As we look ahead into 2015, the uncertainty in Europe will continue to rear its head over time. The European Union (EU) is fighting deflation, recessionary pressures, a Greece exit from the EU, and limited political capital required for the necessary fixes. This could lead to safe haven trading in our bond market, helping Mortgage Bonds and home loan rates (which are tied to Mortgage Bonds) in the process.

The bottom line is that home loan rates remain near historic lows, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

The labor sector will be front and center, with Friday’s Jobs Report for December the highlight.

  • Look for the ISM Services Index on Tuesday.
  • The first report from the jobs sector comes Wednesday with the ADP Employment Report.
  • As usual, Weekly Initial Jobless Claims will be delivered on Thursday.
  • Friday brings the December Jobs Report, which includes Non-farm Payrolls and the Unemployment Rate.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving—and when they are moving lower, home loan rates are getting worse.

To go one step further—a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Mortgage Bonds have improved in recent days. Home loan rates remain near historic lows.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jan 02, 2015)

The Mortgage Market Guide View

3 Simple Steps to Get Rid of Old Electronics
Make some extra cash by offloading your unused electronics and devices.
By Mark Solheim,

Step 1
After the holidays is a good time to clear your home of unwanted smartphones, computers, video game consoles and other tech products. You can sell them on sites such as, and Shipping is free. You will receive a check, gift card or deposit to your PayPal account. Best Buy offers gift cards in exchange for usable electronics. It also recycles unusable devices (including TVs) free. With, you can take your devices to one of its partner stores, including Target, and get store credit.

Step 2
If you’d rather donate your old tech gadgets, you can give your cell phone to a victim of domestic violence through Verizon’s HopeLine program or support troops overseas at The National Cristina Foundation will connect you with local nonprofits that will take your computer and tech accessories. And through Dell’s Reconnect program you can take computer equipment to a Goodwill location.

Step 3
Before you get rid of your tech gear, erase any personal data. “De-authorize” computers that use digital rights management software (for example, products connected to iTunes, which limits some files to five devices). You should also “disassociate” your Apple ID from any device in iTunes. To delete personal data from a smartphone, reset to the factory settings and erase the SD card. For a computer, you’ll need software that erases data, such as the free Active@ KillDisk.

The payoff
You’ll declutter while earning cash or giving to a good cause.

kiplingerVideo featured with permission. All Contents ©2015
The Kiplinger Washington Editors.

Economic Calendar for the Week of January 5 – January 9

Economic Report
Tue. January 06
ISM Services Index
Wed. January 07
FOMC Minutes
Wed. January 07
ADP National Employment Report
Thu. January 08
Jobless Claims (Initial)
Fri. January 09
Non-farm Payrolls
Fri. January 09
Unemployment Rate
Fri. January 09
Hourly Earnings
The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.
As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.
Don Parsons
Commerce Mortgage – NMLS 2105
450 Newport Center Drive Suite 350
Newport Beach, CA 92660
2130 Main Street Suite 260
Huntington Beach, CA 92648