Mortgage Market Weekly Update – June 28, 2013

In This Issue

Last Week in Review: A full slate of economic reports was released. But was the news positive?

Forecast for the Week: A holiday-shortened week is ahead, and so is the all-important Jobs Report for June.

View: The retweet is a big part of what makes Twitter an effective marketing tool. Check out 6 easy ways to master getting more.

Last Week in Review

“Feeling groovy.” Simon and Garfunkel. Consumers are certainly feeling more confident these days, as positive economic news tumbles in. But what does this mean for home loan rates? Read on for details.

consumer-confidence-mar-jun_2013-07-01Consumer Confidence, which measures how optimistic or pessimistic consumers are with respect to the economy in the near future, came in at 81.4 in June. This is the highest level since January 2008, when it stood at 87.3. The Consumer Sentiment Index, a similar measure, also came in above expectations for June.

Housing continues to be a bright spot for the economy as Case-Shiller reported that its 20-city home price index rose by 12.1 percent year-over-year in April. In addition, the 2.5 percent gain in the index from March to April was the largest monthly gain ever recorded. New Home Sales also rose 2 percent, coming in above expectations.

But not all the economic news last week was cause for song. The final reading for 2013 first quarter Gross Domestic Product (GDP) came in at 1.8 percent, below expectations and a pretty anemic reading overall. The good news is that this reading is higher than the meager 0.4 percent reading for the fourth quarter of 2012. And in the manufacturing sector, the Chicago PMI (a key regional report) came in lower than expectations and below May’s reading.

What does all of this mean for home loan rates?

One of the biggest stories to continue to monitor is when the Fed will begin to taper its Bond purchase program known as Quantitative Easing. Remember that the Fed’s Bond purchase program has helped Bonds and home loan rates remain attractive. However, just the talk of potentially tapering these purchases has led to increased volatility in the markets, causing Mortgage Bonds and home loan rates to worsen recently.

If the economy continues to improve, the Fed could consider tapering their purchases sooner rather than later. However, if the labor or housing markets show signs of weakening, the Fed may hold off on that decision. With inflation remaining tame, they certainly have cover to continue their purchases for some time.

The bottom line is that home loan rates remain attractive compared to historical levels and now remains 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

There will be fireworks on Thursday due to the Independence Day holiday, and perhaps also on Friday due to some important labor market news.

  • On Monday, we get data on manufacturing with the ISM Index.
  • The ISM Services Index, a national non-manufacturing index, will be released on Wednesday.
  • Weekly Initial Jobless Claims will be released on Friday this week due to Thursday’s July 4 holiday, along with the often market-moving Jobs Report for June, which includes Non-Farm Payrolls and the Unemployment Rate.

On Wednesday, the Bond Market will close at 2:00 p.m. ET and the Stock Market will close at 1:00 p.m. ET, and both markets will be closed all day Thursday for the July 4 holiday. Wishing everyone a safe and happy Independence Day.

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 that home loan rates are based on.

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, Bonds and home loan rates were able to rally last week. I’ll continue to monitor their movement closely.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jun 28, 2013)


The Mortgage Market Guide View…

Social Media Sizzle, Part 2
6 Easy Ways to Get Retweets

The retweet is the highest compliment and ultimate goal on the Twitter stage. It is also the fastest way to build a bigger audience, develop a stronger following, and get more web traffic to your site. The competition is fierce, with over 58 million tweets going out each and every day. Here are six ways to grab your fair share of retweets:

1. Timing is everything. And asking for a retweet is no exception. According to Dan Zarrella’s The Science of Retweets, 2:00 p.m. to 6:00 p.m. in your time zone is the best time to tweet and ask followers for a retweet.

2. Go ahead, ask! It’s really this easy: adding the phrase “please retweet” or “Pls RT” or “RT” can increase your chances of getting one by 160 percent according to Jerry Low, blogger and technology expert.

3. Add value and be interesting. News and instruction are the two types of content topping the list of the most retweeted updates. Embedding a link in your tweets is the best way to share information or get the conversation started.

4. What goes around comes around. The most retweeted users are also the most active retweeters. Chris Brogan, with over 248,000 followers, says your retweet ratio should be at least 15:1. For every one self-promotional tweet, he promotes up to 15 for his followers.

5. Save me some space, Ace. Ever try to retweet something but ran out of room and gave up? You’re not alone. With only 140 characters allowed, keeping your tweets between 80-110 is a challenge, but a skill worth developing.

6. Tweets and hashtags go together. A recent study by Microsoft showed 18 percent of retweets contained hashtags. You can learn more hashtag tips on, a website dedicated to social media statistics and metrics.

Don’t forget to pass these tips along to your clients and colleagues!



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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.

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Don Parsons
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