Mortgage Market Weekly – Update August 10, 2015

In This Issue…

Last Week in Review: July’s Jobs Report showed continued signs of improvement.

Forecast for the Week: Thursday’s Retail Sales report will be the closely watched release on a light economic calendar.

View: Wrap up your summer with a reading list to boost morale and motivate you to take on the rest of the year.

Last Week in Review

“Working 9 to 5. What a way to make a living.” Dolly Parton. A heavy economic calendar culminated the week with July’s Jobs Report singing of work for many Americans. The housing market showed strong gains as well.

housing-price-index_2015-06-22Employers added 215,000 new jobs in July, while the figures for May and June were revised higher by a total of 13,000 jobs. Retail, health care and leisure led the pack with job opportunities. The unemployment rate held on to its seven-year low, which is also good news. While the average workweek increased, growth rate of wages remains at the lowest levels on record.

Home prices jumped in June. Research firm CoreLogic reported that home prices rose 6.5 percent, marking the 40th consecutive month of year-over-year gains. While prices are still down from the peak in April 2006, they are expected to continue to rise. CoreLogic cited pent-up demand, affordability and a more robust labor market for the gains.

Data continues to show that the job market, housing sector and economy overall are improving, even though inflation remains below the Fed’s 2 percent target. The big question now is whether or not our economy has improved enough for the Federal Reserve to begin raising its benchmark Fed Funds Rate (the rate banks use to lend each other money overnight). September’s Federal Open Market Committee meeting provides the next opportunity to see what the Fed will do.

For now, home loan rates remain near historic lows. Let me know if I can answer any questions at all about the mortgage market, housing or home loan rates for you or your clients.

Forecast for the Week

This week’s economic calendar is light, though the second half of the week features several key reports.

  • Tuesday kicks off with data from second quarter Productivity.
  • Jump ahead to Thursday with weekly Initial Jobless Claims and the closely watched Retail Sales report.
  • On Friday, the Consumer Sentiment and the Producer Price Indexes will be released.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, 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 are 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 throughout the latter part of July. Home loan rates remain near historic lows.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Aug 07, 2015):

mtgbonds_2015-08-02

The Mortgage Market Guide View…

Summer of Success Reading List

If you’re looking for a few great titles to wrap up your summer reading, look no further than these top picks from Amazon’s Best Seller list! These great reads will boost your morale and motivate you to take on the rest of the year.

Getting to Yes with Yourself (and Other Worthy Opponents) is the highly anticipated follow up to “Getting to Yes: Negotiation Agreement Without Giving In.” Harvard University professor and negotiation expert William Ury addresses one of the most common obstacles to achieving goals: negative self-talk.

StrengthsFinder 2.0 asks if you have the opportunity to do what you do best every day. For many, natural talents go untapped. Instead, people devote more time to fixing perceived shortcomings than to developing and using strengths. This book reveals how to change the pattern.

The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing shares the secrets of the most popular organization consultant in Tokyo. Disorganization contributes to problems in both business and life. But author Marie Kondo (whose consultancy has a three-month waiting list) promises if you organize your home or office just once—and do it properly—you’ll never have to do it again, and you’ll see positive results.

The Achievement Habit: Stop Wishing, Start Doing, and Take Command of Your Life written by the co-founder of Stanford’s d.School, Bernard Roth, shares thinking insights gained from solving large-scale design projects. Gain confidence, overcome obstacles that keep you from your potential, and learn to think more creatively from one of the masters of applied creative thought.

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

econ-cal-2015-08-08_0-48-45

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.

Don Parsons
Commerce Home Mortgage – NMLS 2105
450 Newport Center Drive Suite 480
Newport Beach, CA 92660
2130 Main Street Suite 260
Huntington Beach, CA 92648

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 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)

aug01-fannie-mae-chart

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

econ-calendar-201408

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