Mortgage Market Weekly – Update Mar 2, 2015

In This Issue…

Last Week in Review: Recent housing reports have disappointed, but sales of new and existing homes are up from this time a year ago.

Forecast for the Week: The Jobs Report for February is a must-watch. Also look for news on inflation, personal income and spending, and manufacturing.

View: Boost new ideas and creative thinking with these four tips.

[Read more…]

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.

[Read more…]

Mortgage Market Weekly – Update August 4, 2014

In This Issue…

Last Week in Review: The Jobs Report for July met expectations, and so did the Fed’s taper announcement. But there was one big surprise—find out more.

Forecast for the Week: The economic calendar is quiet, but earnings season continues. Will the news boost Stocks, or will it benefit Bonds and home loan rates?

View: These four simple tips can improve your writing and make sure your marketing pieces and emails make a great first impression.

Last Week in Review

Surprise! Surprise! While the Jobs Report for July didn’t feature any major surprises, the second quarter Gross Domestic Product reading sure did. Here’s what you need to know.

job-creations_2014-08-01The Labor Department reported that 209,000 new jobs were added in July, while the numbers for May and June were revised higher by 15,000. Through the first seven months of 2014, job creations have averaged 230,000 jobs per month, enough for the U.S. economy to continue to grow. While the Unemployment Rate ticked up a hair to 6.2 percent, overall this was a decent report and a good sign for the labor markets.

Also, as expected, the Fed announced that it will taper its big Bond-buying program by $10 billion total. This means that the Fed will now purchase $10 billion in Mortgage Bonds and $15 billion in Treasury Securities each month. The Fed has been steadily tapering these purchases throughout the year. As we head into the fall, it will be important to see how further tapering may impact Mortgage Bonds—and therefore home loan rates, which are tied to Mortgage Bonds.

There weren’t any major surprises in the housing sector, as the Case Shiller Home Price Index rose by 9.3 percent in May on an annualized basis, the slowest pace in more than a year. From April to May, there was a 0.3 percent decline, the first monthly drop since January 2012. Price gains continue to move down to more normal levels after the big gains seen in 2013.Â

That leads us to the big surprise of the week. The first reading of second quarter Gross Domestic Product (GDP) surged by 4 percent, well above the -2.1 percent final reading for the first quarter. This is significant because GDP is the broadest measure of economic activity, and at first glance it’s a great sign for our economy. However, it’s important to note that this is the first of three readings and it is based on data that is incomplete or subject to further revisions by the Bureau of Economic Analysis. We will have to see what future reports bring as the second half of the year continues.

The bottom line is that home loan rates remain near some of their best levels of the year 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

After last week’s jam-packed calendar, this week’s economic report schedule is on the light side.

  • On Tuesday, the ISM Services Index for July will be released.
  • Jump to Thursday with the usual suspect, Weekly Initial Jobless Claims, which continue to hover near pre-recession levels.
  • On Friday, look for Productivity for the second quarter.

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.Â

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 furthe – ”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.Â

As you can see in the chart below, the volatility continued last week due to news here at home and the uncertainty in several regions overseas. Home loan rates remain attractive and I will continue to monitor them closely.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday Aug 01, 2014)


The Mortgage Market Guide View…

4 Tips to Help You Become a Better Business Writer

First impressions are always crucial, especially when reaching out to potential new clients and referral partners. And in business, first impressions are often formed sight unseen through writing. That’s why avoiding poor grammar, clichés and “business speak” in your writing is critical.

Here are four tips that can help improve your writing, to ensure you make a great impression with clients and colleagues:

Keep it simple! Long, run-on sentences can be confusing, while the ability to simplify the complex can actually be seen as a sign of intelligence and leadership. Click here to enable both Outlook and Microsoft Word to apply the Flesch-Kincaid Grade Level and Reading Ease filters to all your documents.

Check for any spam issues. Besides ensuring your email gets to the intended recipient, spam checker tools help improve your writing by eliminating marketing and sales jargon such as “opportunity,” “free” and “winning.”

Avoid cliche’s and dry as dust expressions. People may think they are tried and true, but they can also make you sound unimaginative.

Don’t forget to proofread and there’s an app for that! While grammar and style errors may seem like small issues, they give the impression that you don’t pay attention to important details. Always proofread your materials, and ask a trusted colleague to review them for a second opinion. In addition, the Hemingway App identifies grammar and style errors often better than most word processors and helps you avoid awkward sentence constructions and overly-used words or expressions.

As always, please feel free to pass these tips along to your team, colleagues and clients!

Economic Calendar for the Week of August 04 – August 08


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 providing 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.

Thanks for reading.

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

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?

[Read more…]