MMG Weekly 10/27/14

Guy R. Vetrano NMLS# 183357
Certified Mortgage Planning Specialist
Sun West Mortgage USA, Inc. (FN) NMLS#359295
Phone: 866-924-4616
Mobile: 602-692-7196
License: 866-586-0980
Guy.Vetrano@swmc.com
guyvetrano.sunwestmortgage.com
In This Issue…  
Last Week in Review: Home loan rates remain near 18-month lows, while housing reports showed mixed news for the sector.

Forecast for the Week: Look for key reports on housing, consumer attitudes, U.S. economic growth, inflation and more. Plus, a big Fed meeting is ahead.

View: Check out the secret to being more valuable at your job, revitalizing your career, or getting paid more.

Last Week in Review  
It’s been said that “opportunity comes knocking.” And that’s certainly the case for people looking to purchase or refinance a home, as home loan rates remain near 18-month lows.

In recent weeks, investors have moved into the safe haven of the Bond markets for several reasons, including weak economic data here at home, concerns about Ebola, and economic and geopolitical uncertainty overseas. This has helped Mortgage Bonds reach 18-month highs, and since home loan rates are tied to Mortgage Bonds, rates have reached 18-month lows.

In addition, Stocks have been volatile due to the upcoming end of the Fed’s Bond-buying program. The Fed has been slowly tapering its purchases throughout the year, and every indication is that the Fed will completely end the program at its meeting on October 28 to 29. The key takeaway is that Stocks performed terribly after the first and second rounds of the Fed’s Bond-buying program ended. If Stocks worsen, Mortgage Bonds and home loan rates could continue to improve.

In other news, key housing reports showed mixed results for the sector. September Existing Home Sales reached its highest pace of the year, showing gains in all major regions except for the Midwest. September New Home Sales also reached a six-year high. However, New Home Sales for August, which were originally reported at 504,000, were revised to 466,000. Sales in June and July were also revised lower.

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  
A packed economic calendar is in store this week. Plus, the Fed meeting could cause volatility in the markets.

  • Housing news kicks off the week with Pending Home Sales on Monday, followed by theS&P/Case Shiller Home Price Index on Tuesday.
  • Durable Goods Orders will also be released on Tuesday.
  • We’ll get a read on how consumers are feeling with Consumer Confidence on Tuesday and theConsumer Sentiment Index on Friday.
  • Thursday’s reports feature Weekly Initial Jobless Claims and the first reading on Q3 Gross Domestic Product.
  • Friday brings Personal IncomePersonal SpendingPersonal Consumption Expenditures(inflation index), the Employment Cost Index, and Chicago PMI (a regional manufacturing report).

In addition, the Fed’s next two-day meeting of the Federal Open Market Committee begins Tuesday, with the Monetary Policy Statement being released on Wednesday. Investors will be watching closely to see if the Fed fully tapers its ongoing Bond-buying program. This announcement has the potential to create volatility in the markets.

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 remain near 18-month highs, helping home loan rates reach 18-month lows. I’ll continue to monitor them closely.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday October 24, 2014)

Japanese Candlestick Chart

The Mortgage Market Guide View…  
3 Steps to Becoming an Expert

Peter Economy, management expert and co-author of the bestselling book, “Managing for Dummies,” says the secret to being more valuable at your job, revitalizing your career, or getting paid more is simple–become an expert. He recommends the following three steps to get there:

Step 1. Understand what you’re interested in. What you already know can put you within short reach of being an expert in your field (if you aren’t one already). This is the least time-intensive route. But if what you’re already doing no longer interests you, you must find something inspiring enough to make learning feel effortless.

Step 2. Focus on one thing at a time. Learn too many things at once and you’ll be overwhelmed and probably fail. Don’t move on to the next subject of your expertise until you feel comfortable with the one you’re working on now.

Step 3. Practice makes perfect. There’s no such thing as an overnight expert. Be willing to invest the time for:

  • Studying. Reading, taking courses, attending training or seminars, watching videos, hiring a mentor, and learning from other experts are all great avenues.
  • Applying. Getting practical experience will help you go deeper, work out the kinks, and fully explore your field of expertise.
  • Presenting. Documenting your findings with a journal or blog will help you understand even more facets of your expertise. If at all possible, write or speak about your trials and resolutions, teaching others about your journey.

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

Source: Inc.com

Economic Calendar for the Week of October 27 – October 31

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. October 27
10:00
Pending Home Sales
Sep
NA
-1.0%
Moderate
Tue. October 28
08:30
Durable Goods Orders
Sep
NA
-18.4%
Moderate
Tue. October 28
09:00
S&P/Case-Shiller Home Price Index
Aug
NA
6.7%
Moderate
Tue. October 28
10:00
Consumer Confidence
Oct
NA
86.0
Moderate
Wed. October 29
02:00
FOMC Meeting
Oct
NA
0.25%
HIGH
Thu. October 30
08:30
GDP Chain Deflator
Q3
NA
2.1%
Moderate
Thu. October 30
08:30
Gross Domestic Product (GDP)
Q3
NA
4.6%
Moderate
Thu. October 30
08:30
Jobless Claims (Initial)
10/25
NA
283K
Moderate
Fri. October 31
08:30
Personal Income
Sep
NA
0.3%
Moderate
Fri. October 31
08:30
Personal Spending
Sep
NA
0.5%
Moderate
Fri. October 31
08:30
Personal Consumption Expenditures and Core PCE
Sep
NA
0.1%
HIGH
Fri. October 31
08:30
Personal Consumption Expenditures and Core PCE
YOY
NA
1.5%
HIGH
Fri. October 31
08:30
Employment Cost Index (ECI)
Q3
NA
0.7%
HIGH
Fri. October 31
09:45
Chicago PMI
Oct
NA
60.5
HIGH
Fri. October 31
10:00
Consumer Sentiment Index (UoM)
Oct
NA
86.4
Moderate

All products are subject to credit and property approval. Program terms and conditions are subject to change without prior notice. Not all products are available in all states or for all amounts. Other restrictions and limitations apply. The content in this flyer is for informational purposes only and not meant for legal, tax, or professional accounting advice. Sun West Mortgage Company, Inc. (NMLS ID 3277) in Arizona is licensed as Sun West Mortgage USA, Inc. (FN) and holds a Mortgage Banker License (#0909624), a Mortgage Banker Branch License %u2013 Other Trade Name #1 (#0116436) and for the Scottsdale, AZ Branch Office (NMLS ID 359295), a Mortgage Banker Branch License (#0118060) for the Tempe, AZ Branch Office (NMLS ID 981806), a Mortgage Banker Branch License (#0119120) for the Tacoma, WA Branch Office (NMLS ID 1153767) and a Mortgage Banker Branch License (#0118641) for the Cerritos, CA Branch Office (NMLS ID 1031622) approved by the Arizona Department of Financial Institutions, Phone: (602) 771-2800. Please refer to www.swmc.com and www.nmlsconsumeraccess.org to see where Sun West Mortgage Company, Inc. (NMLS 3277) is a licensed lender and servicer. In all jurisdictions, the principal (Main) licensed location of Sun West Mortgage Company, Inc. is 18000 Studebaker Road, Suite 100 in Cerritos, CA 90703, Phone: (800) 453-7884.