In This Issue…
Last Week in Review: Winter put a damper in February Retail Sales, while Freddie Mac expects 2015 to be a great year for home sales and new construction.
Forecast for the Week: A Fed meeting is ahead, plus key reports on housing and manufacturing.
View: The first quarter of 2015 is nearly over. Perform a quick success check-in with these six tips.
Last Week in Review
“Feel the heat.” Robert Palmer. Feel the chill is a more apt description of what retailers experienced in February, as the harsh winter weather put a damper on sales.
February Retail Sales fell by 0.6 percent, well below expectations, marking the third straight month of declines as Americans have been slow to spend the savings from lower gas prices in recent months. Sales were led lower by a decline in spending at restaurants and home improvement retailers due to the cold weather.
The Retail Sales report is the most timely indicator of broad consumer spending patterns. It is also a critical factor to watch in our economic recovery, and it will be important to see if these numbers improve once the weather warms up.
Also of note, wholesale inflation remains tame, and tame inflation is always good news for fixed investments like Mortgage Bonds and for home loan rates, which are tied to Mortgage Bonds. And, Freddie Mac released its March 2015 U.S. Economic and Housing Market Outlook, revealing that it expects home sales and new construction in 2015 to be the best since 2007, when total home sales were about 5.8 million. Freddie Mac cited an improving job market, rising rents and expanded credit availability as some reasons for its positive outlook.
The bottom line is that home loan rates remain attractive, 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
Housing and manufacturing reports are front and center this week. Plus, the Fed meets.
Manufacturing data from the Empire State Index will be released on Monday, followed by the Philadelphia Fed Index on Thursday.
In housing news, Monday brings the NAHB Housing Market Index for March. On Tuesday, look for February’s Housing Starts and Building Permits.
As usual, Weekly Initial Jobless Claims will be delivered on Thursday.
In addition, the two-day Federal Open Market Committee meeting will begin on Tuesday and end on Wednesday with the 2:00 p.m. EDT release of the monetary policy statement. Investors will be listening closely for any rhetoric regarding future rate hikes, and this news always has the potential to be a market mover.
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 improvingâ€”and when they are moving lower, home loan rates are getting worse.
To go one step furtherâ€”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 rebounded in recent days due to weaker than expected economic data and weak wholesale inflation. Home loan rates remain near historic lows.
Chart: Fannie Mae 3.0% Mortgage Bond (Friday Mar 13, 2015)
The Mortgage Market Guide View…
6 Ways to Boost Your Success
The second quarter of 2015 is fast approaching, making now a great time for a success check-in. Here are six suggestions to help you achieve your goals this year.
1. Limit time with toxic people. Negativity and dissension will suffocate your drive, perhaps more than anything else. Do whatever possible to avoid spending time with people who aren’t on the same trajectory as you.
2. Keep learning. If you never learn anything new about your field, it will be nearly impossible to have big breakthroughs in work or in life. Take time out for a class, a book, a seminar or events that will help you keep growing.
3. Write down your vision. A clear statement about where you are and where you want to be later this year can help you stay on track.
4. Stop wasting time. Don’t be afraid to say “no” to any activities that will hinder your productivity.
5. Communicate more effectively. Don’t use email when a phone call would be more effective. This will speed up your day and free up time you can spend on profit-making activity or even relaxation.
6. Say thank you more. Gratitude can have a big impact on your motivation, and ultimately on your success. Keep track of things you are thankful for in life and never let a good deed go unrecognized.
As always, feel free to pass these helpful tips along to your team, clients and colleagues!
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.
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