Mortgage Market Weekly – Update Mar 30, 2015

In This Issue…

Last Week in Review: February New Home Sales reached their best level in seven years, while U.S. economic growth for 2014 was disappointing.

Forecast for the Week: A packed economic calendar is ahead, culminating with Friday’s Jobs Report for March.

View: Use these tips to help avoid flight delays, or make any delays you do experience more palatable.

Last Week in Review

“You take the good, you take the bad.” The Facts of Life. That television series theme song also applies to recent economic news, as housing is a bright spot while economic growth overall remains sluggish.

new-home-sales_2015-03-30New Home Sales surged in February, rising 8 percent from January to an annual rate of 539,000 units, while January’s sales were revised higher to 500,000. New Home Sales now stand at their best level since February 2008 and are up nearly 25 percent from the 432,000 recorded in February 2014. The report also showed that the median sales price for new homes was $275,500, up 2.6 percent from a year ago.

Existing Home Sales also rose by a modest 1.2 percent in February, to an annual rate of 4.88 million units, which was just below expectations. Low inventories were said to be a key factor in price growth, which rose at the fastest pace in a year.

However, growth for our economy overall is still sluggish. The final reading on fourth quarter 2014 Gross Domestic Product (GDP) was unchanged from the second reading, coming in at 2.2 percent. This was well below the 5 percent recorded in the third quarter of last year. For all of 2014, GDP was 2.42 percent, which is disappointing considering we are six years into our economic recovery. One positive item to note from the report: Consumer spending rose to 4.4 percent, which is the fastest rate since the first quarter of 2006.

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

Key reports on inflation, manufacturing and housing are ahead, along with the Jobs Report for March.

  • The packed economic calendar will kick off on Monday with the Fed’s favorite measure of inflation, Personal Consumption Expenditures, along with Personal Income and Personal Spending.
  • In housing news, Pending Home Sales will be released Monday, followed by the S&P/Case-Shiller Home Price Index on Tuesday.
  • Also on Tuesday, we’ll get a read on Consumer Confidence.
  • In the manufacturing sector, look for the Chicago PMI on Tuesday and the ISM Index on Wednesday.
  • The first of two key labor market reports will be delivered on Wednesday with the ADP National Employment Report.
  • As usual, Weekly Initial Jobless Claims will be released on Thursday.
  • That brings us to Friday’s Jobs Report for March, which will be dissected to the fullest extent by investors around the globe. The Jobs Report includes Non-farm Payrolls, the Unemployment Rate and Hourly Earnings.

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 worsened in recent days after rallying earlier this month. However, home loan rates remain near record lows.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Mar 27, 2015)

mgt-bonds-2015-03-30

The Mortgage Market Guide View…

Help! My Flight is Delayed!

Earlier this year, a Texas to Oklahoma flight scheduled to last 58 minutes turned into a 9-hour nightmare as the plane was delayed due to bad weather. While avoiding flight delays entirely may be impossible, there are some steps you can take before, during and after experiencing one.

Before you fly. Technology and big data to the rescue! FiveThirtyEight has analyzed 6 million flights and discovered which airports, airlines and routes are most likely to arrive on time. Check out your upcoming or future flights here.

Know your rights. Take a minute to review the specific details of your airline’s customer service plan (here are links for Delta, United, JetBlue and American Airlines). If your airline fails to meet its commitments, you can submit a complaint to the U.S. Department of Transportation’s Aviation Consumer Protection Division.

If you get stranded. Visit the FlyersRights.org Help! I’m Stranded page for a list of helpful information, including airline phone numbers. If you can take a different flight, the Next Flight app lets you check for non-stop flights for the current day and following two days. In case you’re stuck, Priority Pass gives details on 700 airport VIP lounges, before you shell out membership fees.

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

econ-cal-2015-03-30

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.

If you prefer to send your removal request by mail the address is:

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 Nov 24, 2014

In This Issue…

Last Week in Review: The housing sector continues to improve, as home loan rates remain near annual lows.

Forecast for the Week: Look for news on housing, inflation, consumer confidence and the state of our economy—all ahead of the Thanksgiving holiday.

View: Get more from your lunch hour with these great tips.

Last Week in Review

Time is on our side. Time continues to be on the side of potential homebuyers, as home loan rates remain near 18-month lows. But could a hint of inflation be creeping into our economy – and if so, could higher home loan rates be on the horizon? [Read more…]

Mortgage Market Weekly – Update Nov 17, 2014

In This Issue…

Last Week in Review: The Bond markets were closed Tuesday in honor of Veterans Day, while the rest of the week was quiet with only a handful of economic reports on the calendar.

Forecast for the Week: The Fed minutes could cause volatility. Plus, key housing reports, and is inflation still tame?

View: Check out these five tips that can help yield more productive and meaningful work relationships.

[Read more…]

Mortgage Market Weekly – Update Aug 25, 2014

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_2014-08-22Housing 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:

  1. 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).
  2. Recruit candidates. Turn to social media, your networks, and local colleges and universities. Provide the job description for reference.
  3. 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.
  4. 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.
  5. 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.
  6. 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

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 – NMLS 2105
450 Newport Center Drive Suite 350
Newport Beach, CA 92660
2130 Main Street Suite 260
Huntington Beach, CA 92648

Top Things to Watch for in 2014

Economy, Interest Rates, and Housing

  1. Experienced lenders will have a huge advantage. New lending rules and strict compliance requirements will be too overwhelming for some. Dodd-Frank rules are still only 50 percent implemented and smaller lenders may not be able to afford legal staff or counsel necessary to monitor compliance.
  2. Expect inflation in 2014 to wind up no higher than 1.5 percent, possibly lower. From import prices to producer prices, from the CPI to the Federal Reserve’s favorite measure of inflation, core Personal Consumption Expenditures, are all running well below the Fed’s target of 2 percent.
  3. Interest rates will be stable into early 2015, although exceptionally low mortgage rates are a thing of the past. Auto loans and other short term rates will barely be affected by tapering of Fed purchases.
  4. The unemployment rate should be at or near 6.5 percent by the end of 2014. Jobs begin 2014 where they were in early 2013, averaging 190,000 per month. Most economic headwinds are behind us, and we could see increases to 220,000 per month.
  5. New home sales up, existing homes stay flat. The flood of distressed sales pushed existing home sales up at the expense of new homes, but distressed sales as a percentage of all home sales will decline. Existing home sales should stand pat at 5 to 5.25 million while new home sales rise by about 20 to 25 percent – to about 525,000.
  6. House prices could see a 5 to 6 percent boost. Look for slowing median house price increases and more rapidly rising average house prices, courtesy of increasing income disparities between the rich and everyone else. Inventory bottomed in 2013, but a 5 percent increase should increase supply, enabling more first-time buyers and move-up buyers to find a home.
  7. The economy could finally break out of its low growth funk. An election year means politically motivated saber rattling over the budget will be kept to a minimum. The most recent budget deal will help increase GDP due to the short-run increase in government spending, and decrease economic uncertainty. Overall, expect a one-point rise in GDP to 3.1 percent in 2014.

Mortgage Market Weekly Update – July 22, 2013

In This Issue

Last Week in Review: Key inflation and housing data was released, plus Fed Chairman Ben Bernanke made some important remarks.

Forecast for the Week: Look for more key housing data, as well as Jobless Claims and Consumer Sentiment.

View: Add hours to your day with these great tips.

Last Week in Review

“Be willing to make decisions.” General George Patton. And that’s exactly what the Fed must be willing to do when it comes to their Bond purchase program known as Quantitative Easing (QE). Read on to find out what this could mean for home loan rates.

cpi_jan-jun2013Remember that the Fed has been purchasing $85 billion a month in Bonds to help lower unemployment and stimulate the housing market and the economy overall. Last week, Fed Chairman Ben Bernanke noted that these purchases are by no means on a preset course and that Bond buying could be reduced at faster pace, a slower pace, or even increased for a time, depending on outlook. Bernanke also mentioned the word deflation last week for the first time in recent memory, and this could pave the way for QE to last into 2014.

The bottom line is that the Fed’s decision on QE will be data dependent. If inflation starts to rise and economic reports continue to be strong, the Fed could consider tapering its Bond purchases sooner rather than later. Whether this will lead to higher home loan rates–and how much higher–remains to be seen.

Speaking of key data points released last week, the Consumer Price Index rose by 0.5 percent from May to June due to rising prices in gasoline, food, clothing, medical costs and housing. This number was above expectations and the second highest reading this year. It is important to note that the year-over-year Core CPI (the reading that strips out volatile food and energy prices) ticked down a notch, which is likely why the Fed continues to say that inflation remains tame.

Over in the housing market, Housing Starts declined by nearly 10 percent in June from May to 836,000. This was below expectations and the lowest level since August 2012. The drop was attributed towards a big decrease in apartments. Building Permits, a sign of future construction, also fell by 7.7 percent, below expectations.

Meanwhile, Retail Sales in June declined to 0.4 percent from 0.5 percent in May. It’s important to note that Retail Sales make up 30 percent of consumer spending. The latest Jobs Report showed a lot of part-time jobs were created and confirmed that wages for most people have not grown at all. Without wage growth, we should not expect any robust Retail Sales or pickup in economic activity. This is another data point the Fed will be watching as it makes decisions regarding QE.

The bottom line is that now remains a great time to consider a home purchase or refinance, as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

Several key housing reports will be released this week.

  • Existing Home Sales data kicks off the week on Monday and New Home Sales will be released on Wednesday. The reports come after last week’s big drop in Housing Starts.
  • As usual, Weekly Initial Jobless Claims will be reported Thursday. Last week’s claims fell by 24,000 to 334,000, but the decline was due in part to factories undergoing their usual summer shutdown for a few weeks.
  • Look for the Consumer Sentiment Index on Friday.

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 attempted to rally last week. I’ll continue to monitor their movement closely.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jul 19, 2013)

economic-calendar2013-07-22

The Mortgage Market Guide View…

Power Productivity
9 Ways to Add 5 Hours to Your Day

Never wait alone. Checkups, oil changes, long lines and hold times –  all of these contribute to significant chunks of idle time. Rather than catching up on the latest celebrity gossip, bring something to work on. (30 minutes)

One-touch rule. Don’t get back to it later–if a voicemail, email, or piece of paper takes one minute or less to handle, do it and move on. (20 minutes)

News fast. Avoid watching or listening to news first thing in the morning – it’s more important to build a positive mood as you prepare for your day. (30 minutes)

News faster. Get your news sources, blogs, and favorite daily content fed to a single location instead of clicking around willy-nilly. Bloglines is one resource. (20 minutes)

Write everything down. How many times have you gone to the grocery store with the list in your head, and still forgotten something? Write short lists on a sticky note, or simply text yourself. Same goes for the office: carrying a to-do list in your head is not just a recipe for forgetting all you have to do, it’s a stress generator. (30 minutes)

Free your hands. Holding a phone in the crook of your neck limits your ability to do much else. Handle calls while cooking, cleaning, and driving with a headset. (30 minutes)

Call them all. Instead of making three or four calls to different people on the same action item, make a conference call. FreeConfereneCall.com is both free and reliable–and even gives you your own line. (20 minutes)

Techno Freeze. Identify your most productive time during the day then turn off tech that distracts you. Setting aside email and phone for that period can easily double or triple your productivity. Turn off your TV early and save an average of 2.6 hours a day–11 days a year–according to the Bureau of Labor Statistics. (90 minutes)

Waffle check. Every minute you spend deciding what to do, buy, or wear is time you could use elsewhere. Knowing how much your time is worth per hour can help you avoid indecision. For example, “shopping around” for two hours to save $10 on shipping only makes sense if your time is worth $4 an hour. (30 minutes)

econ-calendar-20130722

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.

If you prefer to send your removal request by mail the address is:

Don Parsons
20250 Acacia Street, Suite 120
Newport Beach, CA 92660

Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. Mortgage Success Source, LLC does not grant to you a license to any content, features or materials in this email. You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.