In This Issue…
Last Week in Review: New Home Sales rebounded in April, while the latest Gross Domestic Product reading showed the economy struggled in the first quarter.
Forecast for the Week: Look for key reports on inflation, manufacturing and the labor sector.
View: Make all your video conferences successful by following these easy tips.
Last Week in Review
“You like to-may-to, I like to-mah-to … let’s call the whole thing off.” Shall We Dance. Americans aren’t calling off anything when it comes to real estate this spring. Read on for all the latest housing news and more.
Sales of newly constructed homes rebounded in April, up from the dip in March, as the spring buying season got underway. New Home Sales rose by 6.8 percent to an annual rate of 517,000, which was above the 510,000 expected. Since April 2014, sales are up a whopping 26 percent! The median price for a newly constructed home in April was $297,300, up 8.3 percent from a year ago.
Also of note, April Pending Home Sales increased 3.4 percent from March, while the S&P/Case-Shiller Home Price Index rose by 5 percent on an annual basis in March.
The news was less positive when it came the economy overall. The second reading of first quarter Gross Domestic Product came in at -0.7 percent, worse than the original reading of 0.2 percent. GDP is the broadest measure of U.S. economic strength, and is measured by the total value of all goods and services produced in a calendar year. In 2014, GDP grew by 2.4 percent, a decent number. The Federal Reserve expects GDP to grow by 2.5 percent for 2015, but the first quarter’s figures are not helping to meet this goal.
One benefit from the poor GDP reading is that it gave Mortgage Bonds a boost. This also helped home loan rates, which are tied to Mortgage Bonds, and which recently hit 2015 highs. With uncertainty continuing in Greece as it struggles to make a series of large debt payments, Mortgage Bonds and home loan rates could possibly see a benefit from safe haven trading in the coming weeks.
While market volatility is likely to continue, home loan rates still 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
Friday’s Jobs Report for May ends a week filled with key reports.
- The packed economic calendar kicks off on Monday with Personal Income, Personal Spending and Personal Consumption Expenditures (the Fed’s favorite measure of inflation).
- Also on Monday, look for manufacturing news via the ISM Index. The ISM Services Index will be released on Wednesday.
- Additional reports on Wednesday include the Fed’s Beige Book and the ADP National Employment Report.
- Thursday brings Productivity for the first quarter and Weekly Initial Jobless Claims.
- Friday is the big day with the May Jobs Report, which includes Non-farm Payrolls, Hourly Earnings 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 recently. Home loan rates remain attractive.
Chart: Fannie Mae 3.5% Mortgage Bond (Friday May 29, 2015)
The Mortgage Market Guide View…
Video Conference Tips
Video conferencing is a great way to connect with clients and colleagues when face-to-face meetings aren’t possible. Debra Benton, author of “The Virtual Executive,” suggests following these video conference tips:
Acknowledge the other side of the monitor. You’ve got an audience, so it’s not a good idea to eat, drink or multitask in any other way. In addition, looking bored or displaying other bad body language also shows you aren’t engaged. If you absolutely must make noise or have an off-camera discussion, don’t forget to mute yourself.
Make sure everything works. Before your video conference, make sure your setup works properly with a test call so you can troubleshoot any issues ahead of time. Pay particular attention to volume, as you don’t want to sound too loud or too quiet.
Watch out for delays. Internet connections don’t always cooperate, so be aware of any speed delays. If you notice people talking over each other, let everyone know there’s a delay and lead the conversation to make sure no one misses important information.
Be on time and don’t go over time. As with face-to-face meetings, this is always an important business etiquette rule to follow.
As always, feel free to pass these helpful tips along to your team, clients and colleagues!
Source: Open Forum
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.
Commerce Mortgage â€“ NMLS 2105
450 Newport Center Drive Suite 350
Newport Beach, CA 92660
2130 Main Street Suite 260
Huntington Beach, CA 92648