National Association of Home Builders Housing Market Index

Mortgage Market Weekly – Update Feb 23, 2015

February 23, 2015 By Don Parsons

In This Issue…

Last Week in Review: Recent housing reports were disappointing, while inflation remains low.

Forecast for the Week: February ends on a busy note, with key reports on housing, consumer attitudes, U.S. economic growth and inflation.

View: Protect yourself from identity theft with these important tips.

Last Week in Review

“I knew the record would stand until it was broken.” Yogi Berra. Record low temperatures have hit much of the nation, but that’s not the only chill in the air. [Read more…]

Mortgage Market Weekly – Update Jan 26, 2015

January 26, 2015 By Don Parsons

In This Issue…

Last Week in Review: Housing news was plentiful, while market volatility was rampant.Forecast for the Week: Look for news on housing, consumer attitudes, and economic growth. Plus, the Fed meets!

View: These six tips will not only make you a better listener, they’ll also help improve your business relationships.

Last Week in Review

“There’s no place like home.” News from the housing sector was front and center, and with rates remaining near historic lows, great opportunities remain for those looking to purchase or refinance.

Housing Starts sizzled in December, rising 4.4 percent from November to 1.089 million annualized units, coming in above expectations. The rise in Housing Starts was the strongest annual pace in seven years and it was led by a jump in starts for single-family homes, which reached their highest level since early 2008.

Building Permits, a sign of future construction, did decrease by nearly 2 percent in December but still came in at a strong 1.03 million. Both Building Permits and Housing Starts figures were also revised higher in November.

Also of note, the January National Association of Home Builders Housing Market Index was 57. Readings above 50 are considered positive sentiments about market conditions. Meanwhile, December Existing Home Sales rose from November. However, sales in 2014 were lower compared to 2013 due to a sluggish start in the beginning of the year. Overall, the housing sector continues to improve.

In news overseas, the European Central Bank has announced that it will enact a massive Quantitative Easing, or QE, style of Bond purchases to fight off deflation and promote economic growth in the region. The news has caused extreme volatility in U.S. markets. However, Mortgage Bonds and home loan rates (which are tied to Mortgage Bonds) remain near historic best levels.

The bottom line is that 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

Economic data is plentiful this week, while the first Federal Open Market Committee (FOMC) meeting of the year will take place.

Look for several key housing reports, including New Home Sales and the S&P/Case-Shiller Home Price Index on Tuesday and Pending Home Sales on Thursday.
Also on Tuesday, Durable Goods Orders for December will be released.
We’ll get a sense of how consumers are feeling with Consumer Confidence on Tuesday and the Consumer Sentiment Index on Friday.
As usual, Thursday brings Weekly Initial Jobless Claims.
On Friday, look for the first reading on Q4 2014 Gross Domestic Product, the Employment Cost Index, and manufacturing news via the Chicago PMI.

In addition, the FOMC meeting kicks off on Tuesday and will end Wednesday with the 2:00 p.m. EST release of the Fed’s monetary policy statement. This always has the potential to be a market moverâ€”be sure to stay tuned!

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, the Mortgage Bond market has been volatile of late. Home loan rates are still hovering near record lows, making now a great opportunity for anyone looking to purchase or refinance.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Jan 23, 2015)

The Mortgage Market Guide View

Are You Listening?Active listening is an important part of business relationships. It demonstrates respect to everyone in a conversation. Plus, it helps ensure you are receiving complete details and clarity of the message.

Whether on the phone or in person, these six strategies for active listening will keep you tuned in to the conversation.

1. Power down. Don’t get distracted by technology. Email pop ups and cell phone notifications disrupt the conversation and distract both you and the speaker. Put your phone on silent, close your laptop or turn your desktop monitor away from you. Your messages will be there when your conversation is complete.

2. Sit up. How you physically carry yourself carries through into your energy and attentiveness. Sit up straight and give the speaker your full attention. If you are on the phone, you can stand up to be alert and attentive.

3. Don’t interrupt. Hold your clarifying questions until the speaker is done. Jot your questions down, so you don’t forget. They may get answered along the way.

4. Cue you are listening. Simple verbal cues like “uh-huh” and “okay” let the speaker know you are still present in the conversation. If you are in person, an occasional nod goes hand in hand with making eye contact.

5. Summarize key points. When the speaker is done, summarize his or her key points to illustrate you were listening. Start with, “What I’m hearing you say is…” or, “If I’m understanding you correctly….”

6. Clarify. Ask questions that provide additional details about a situation. You can also clarify what actions or outcomes the speaker anticipated by having the conversation with you.

Please feel free to pass these great tips along to your team, clients and colleagues!

Economic Calendar for the Week of January 26 – January 30

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Tue. January 27	08:30	Durable Goods Orders	Dec	NA	Â	-0.9%	Moderate
Tue. January 27	09:00	S&P/Case-Shiller Home Price Index	Nov	NA	Â	4.5%	Moderate
Tue. January 27	10:00	Consumer Confidence	Jan	NA	Â	92.6	Moderate
Tue. January 27	10:00	New Home Sales	Dec	NA	Â	438K	Moderate
Wed. January 28	02:00	FOMC Meeting	Jan	NA	Â	0.25%	HIGH
Thu. January 29	10:00	Pending Home Sales	Dec	NA	Â	0.8%	Moderate
Thu. January 29	08:30	Jobless Claims (Initial)	1/24	NA	Â	NA	Moderate
Fri. January 30	08:30	Gross Domestic Product (GDP)	Q4	NA	Â	5.0%	Moderate
Fri. January 30	08:30	GDP Chain Deflator	Q4	NA	Â	1.4%	Moderate
Fri. January 30	08:30	Employment Cost Index (ECI)	Q4	NA	Â	0.7%	HIGH
Fri. January 30	09:45	Chicago PMI	Jan	NA	Â	58.3	HIGH
Fri. January 30	10:00	Consumer Sentiment Index (UoM)	Jan	NA	Â	98.2	Moderate

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 â€“ 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 Jan 19, 2015

January 19, 2015 By Don Parsons

In This Issue…

Last Week in Review: Retail sales plummeted, inflation remains tame, and home loan rates are hovering near record lows.Forecast for the Week: It’s a holiday-shortened week, with housing reports dominating the headlines.View: These five podcasts are great tools to help you succeed this year.

Last Week in Review

Shop or drop. Fewer people than expected opened their wallets in December, as the latest Retail Sales numbers declined. But with home loan rates hovering near historic lows, not all of last week’s headlines were disappointing.

Retail Sales plunged by 0.9 percent in December, the biggest decline in nearly a year as lower gas prices didn’t have the desired impact on consumer spending during the busy shopping season. November’s numbers were also revised lower. This news was a bit of a surprise, and not the best sign for our overall economic recovery. But one number doesn’t make a trend, so this will be an important report to watch in the coming months.On the inflation front, inflation at the wholesale level remained tamed in December while the Consumer Price Index showed its smallest gain in five years, mainly due to plunging oil prices. We are beginning to see disinflationary pressures, which is a slower rate of inflation over a shorter time period. While low inflation is Bond-friendly news (and also good for home loan rates, since they are tied to Mortgage Bonds), outright deflation is a sustained fall in prices. That is something we do not want to see because deflation also brings increased unemployment. Inflation is another key item to monitor as we move ahead into 2015.

Also of note, the World Bank cut its forecast for global growth, warning that the world economy remains overly reliant on the “single engine” of the U.S. recovery. If negative news from overseas continues, we could see safe haven trading into our Bond market, helping Mortgage Bonds and home loan rates 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 Sep 15, 2014

September 12, 2014 By Don Parsons

In This Issue…

Last Week in Review: Despite some positive economic reports late in the week, the markets grew volatile ahead of the upcoming Fed meeting.

Forecast for the Week: The Fed meets, plus key reports on inflation, manufacturing and housing.

View: Finding new clients can be easy with these four tips.

Last Week in Review

I don’t know where we’re going, but we’re on our way!” That quote from a Little Rascals episode applies to the markets of late, as uncertainty ahead of the upcoming Fed meeting has caused volatile movements for both Stocks and Bonds. Read on to learn how home loan rates were impacted. [Read more…]

Mortgage Market Weekly – Update Aug 25, 2014

August 22, 2014 By Don Parsons

In This Issue…

Last Week in Review: Key reports indicate that the housing recovery is back on track, while inflation remains tame.

Forecast for the Week: August ends on a busy note, with important reports on housing, inflation, economic growth and more.

View: Need some extra help at the office? Check out these six steps for hiring an intern.

Last Week in Review

“There is nothing as sweet as a comeback.” Anne Lamott. That’s certainly true when it comes to the housing sector, as recent reports indicate that the stall in the housing recovery seen late last year and in recent months may be over.

housing-starts_2014-08-22 Housing Starts for July surged by nearly 16 percent to an annual rate of 1.093 million, above expectations and up from the 945,000 in June. Building Permits, a sign of future construction, also came in above expectations while Existing Home Sales for July increased by 2.4 percent from June.

In addition, the National Association of Home Builders Housing Market Index, which is a measure of builder confidence, rose two points to 55 in August from the 53 recorded in July. This was the third straight monthly gain and brings the index to its highest level since the 56 recorded in January. As a rule, 50 is the line between positive and negative sentiment. All in all, these reports are a good sign that the housing sector is coming back strong.

In other news, despite signs earlier this summer that inflation may be heating up, the latest reports show that inflation at the consumer level remains tame. This is good news for Bonds, as inflation reduces the value of fixed investments like Bonds. And since home loan rates are tied to Mortgage Bonds, tame inflation is typically good news for home loan rates as well.

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

The economic calendar is packed this week with key housing, inflation, manufacturing and economic growth data.

Housing news kicks off the week with July New Home Sales on Monday. The S&P/Case-Shiller Home Price Index follows on Tuesday, with Pending Home Sales for July being reported Thursday.
We’ll get a sense of how consumers are feeling with Consumer Confidence on Tuesday and the Consumer Sentiment Index on Friday.
Look for Durable Goods Orders (i.e. orders for items that last for an extended period of time) on Tuesday.
Important news is ahead Thursday with the second reading of second quarter Gross Domestic Product.
Weekly Initial Jobless Claims will also be reported on Thursday. Claims continue to hover near the 300,000 mark.
Friday wraps up the week with Personal Income, Personal Spending and Personal Consumption Expenditures, the Fed’s favorite measure of inflation. Regional manufacturing news via the Chicago PMI will also be reported.

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 improved in the latter part of the week despite the positive housing data. Home loan rates remain near some of their best levels of the year and I’ll continue to monitor them closely.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday Aug 22, 2014)

aug22-bonds-chart

The Mortgage Market Guide View…

6 Steps for Hiring an Intern

Hiring an intern is a win-win. The intern gains valuable skills and experience. You gain extra help on a temporary basis. Follow these six steps to hire an intern:

Create a clear, meaningful job description. Do you need someone to focus on a special project or a social media coordinator to expand your social media outreach? Include the time commitment (usually up to 20 hours per week) and preferred work hours. Finally, outline the compensation (e.g., hourly wage or stipend).
Recruit candidates. Turn to social media, your networks, and local colleges and universities. Provide the job description for reference.
Prepare a workspace. Your intern will need a computer and a comfortable space. A phone may be necessary if the intern is calling contacts on your behalf.
Plan for mentoring and supervision. Your intern will be learning everything from job responsibilities, to appropriate dress code, to performance expectations, and office protocol. Plan for guidance every step of the way.
Give specific feedback. Concrete praise encourages a repeat performance. Concrete constructive feedback allows for corrective action. If you work with a college, you may have additional requirements of reporting to an internship coordinator or having a site visit.
Offer to be a reference. Internships aren’t expected to lead directly to a job with the host company. Offer to be a reference and speak about your interns’ job responsibilities and strengths with their prospective employers.

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

Sources: Forbes.com, inc.com, internprofits.com, sba.gov

Economic Calendar for the Week of August 25 – August 29

economic-chart-aug22

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 â€“ 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 20, 2014

June 20, 2014 By Don Parsons

In This Issue…

Last Week in Review: Housing is cooling, inflation is warming and the Fed announced more tapering.

Forecast for the Week: Important housing, inflation and consumer confidence reports are ahead. Plus, we’ll get news on the state of our economy with the final reading for first quarter Gross Domestic Product.

View: Good communication skills are critical to succeeding in business. Mastering the art of telling a good story is a key component. [Read more…]

Mortgage Market Weekly Update – Dec 16, 2013

December 13, 2013 By Don Parsons

In This Issue

Last Week in Review: There was important labor and housing market news, and fear regarding the Fed tapering its Bond purchases led to volatility in the markets.

Forecast for the Week: This week’s calendar is packed with key reports on U.S. growth, manufacturing, inflation, housing and jobs data. Plus the Fed meets.

View: Never quite know what to say in your sales emails? Check out the great guide below.

Last Week in Review

“A step in the right direction.” Barbra Streisand obviously wasn’t singing about the housing market in her 1980’s song. But those lyrics were fitting with last week’s housing news. Read on for details.

Initial-Jobless-Claims_2013-nov9-dec7 There was good news on the foreclosure front as research firm CoreLogic reported that completed foreclosures in October declined by 30 percent from those completed in October 2012. In addition, the foreclosure inventory declined by 28 percent this year while the rate of serious delinquency is at its lowest level since November 2008. RealtyTrac also reported that foreclosure inventory fell by 15 percent from October to November. This is good news for the housing industry, but with almost 900,000 properties across the nation still in foreclosure a level four times the normal the housing recovery still has more to go.

In other news, Weekly Initial Jobless Claims surged in the latest week by 68,000 to 368,000, which is the highest level since early October. The previous week, Weekly Initial Jobless Claims dropped to 300,000, but that was most likely influenced by the Thanksgiving holiday, as filers could have waited until after the holiday to process their claims. Also of note, Retail Sales for November came in above expectations.

What does this mean for home loan rates? The labor and housing markets are key areas the Fed has been watching as it determines when to taper its Bond purchases. Remember that the Fed has been purchasing $85 billion in Bonds and Treasuries each month to stimulate the economy and housing market. One of the key topics the Fed will be deciding at its December 17-18 meeting is whether to taper its purchases before or after the new year. Fear regarding this decision has led to volatility in the markets in recent weeks, and this topic is sure to impact the markets and home loan rates in the coming weeks and months.

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

This week’s packed economic calendar is filled with key reports each day.

Monday brings news on Productivity for the third quarter and the Empire State Manufacturing Index. The Philadelphia Fed Manufacturing Index will be reported on Thursday.
Look for inflation news on Tuesday with the Consumer Price Index.

Also on Tuesday, the National Association of Home Builders Housing Market Index will be released. More housing news follows on Wednesday with Housing Starts and Building Permits. Existing Home Sales will be delivered Thursday.

As usual, Thursday brings Weekly Initial Jobless Claims and comes after last week’s big spike.
On Friday, the final reading on Gross Domestic Product for the third quarter will be announced.

In addition, the two-day Federal Open Market Committee (FOMC) meeting begins on Tuesday and ends on Wednesday with the Fed’s monetary policy statement being delivered at 2:00 p.m. ET. All eyes will be watching to see if the Fed decides to begin tapering its Bond purchases.

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.

As you can see in the chart below, volatility has been rampant, as some positive economic reports have caused concern that the Fed will taper its Bond purchases sooner rather than later. I will be watching the news closely this week to see what happens after the Fed meeting.

Fannie Mae 4.0% Mortgage Bond (Friday Dec 13, 2013):

FannieMaeMortgageBond2013_12-16

The Mortgage Market Guide View…

Getting It In Writing
5 Steps to the Perfect Sales Email

Not all email is created equal, and that’s the reason you wouldn’t send the same email to a new prospect as you would your old Uncle Ned. If you’ve got something to sell–an idea, a meeting, a product, or even yourself–and you want to do it by email, keep these five step-by-step instructions handy:

STEP 1: Research Roundup. The first step in writing the perfect sales email is to not write anything until you’re prepared. It only takes a few minutes to Google the background of your recipient and gather other facts or trigger events to provide context and legitimate reasons for making contact.

STEP 2: Subject Scrutiny. You won’t close a deal on your first email, so focus exclusively on getting a response. The subject line has one purpose and one purpose only: to get the recipient to read your email.

Be as direct as possible:

Question about [personalized topic]
Idea for [something important to them]
Fred Jones said I should get in touch
Janet, quick question for you

STEP 3: For Openers. Don’t start by introducing yourself, start with something you noticed about them (a blog post or news item), something you have in common (mutual membership), or someone you both know–your reason for writing:

Janet, I noticed you…
Bob, Fred Jones mentioned that…
Mike, Congratulations on…

STEP 4: Connect the Dots. The main body of your email is where you should show your value. Remember, it’s all about response–so start a dialog by asking an insightful question. This highlights your value better than a long list of qualifications or product benefits.

STEP 5: Focused Farewell. In addition to “Sincerely” your salutation should be short, be in plain text with your contact info (no obtrusive logos), and include a link to one online profile of choice.

Feel free to pass these tips along to your team, clients, and colleagues.

Economic Calendar for the Week of December 16 – December 20

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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