MMG Weekly 2/20/18

Guy R. Vetrano NMLS# 183357
Senior Loan Officer
Bay Equity Home Loans
Phone: 480.500.6000 x 6017
Mobile: 602-692-7196

In This Issue  
Last Week in Review: Inflation and Housing Starts jumped higher in January, but consumer spending was weak.

Forecast for the Week: After last week’s full economic calendar, just a few reports are ahead.

View: You’ll be a #SocialMediaExpert thanks to these hashtag tips.

Last Week in Review  
“Feeling hot hot hot.” The Merrymen. Inflation and Housing Starts heated up in January, but Retail Sales were on the chilly side.

January Housing Starts jumped 9.7 percent from December to an annual rate of 1.326 million units, above expectations, per the Commerce Department. This was the highest level since October 2016 and up 7.3 percent from January 2017. Single-family starts, which account for the largest share of the market, rose 3.7 percent from December and are up 7.6 percent from January 2017. Multi-dwelling starts, which include five or more units, surged 19.7 percent from December. Housing Starts rose in the Northeast, South and West but declined in the Midwest.

Building Permits, a sign of future construction, rose 7.4 percent from December to an annual rate of 1.396 million units. The strong report could be a welcome sign for buyers struggling with low inventory around much of the country.

Consumer inflation also edged higher in January, with a key component spiking to a 12-month high! The Consumer Price Index (CPI) rose 0.5 percent in January, just above expectations due to higher gasoline prices, the Labor Department reported. The more closely watched Core CPI, which strips out volatile food and energy prices, rose 0.3 percent from December. This was the largest increase in a year, boosted by rising rents.

The Producer Price Index, which measures wholesale inflation, rose 0.4 percent in January, in line with expectations. Core PPI came in a bit hotter than anticipated.

The increase in inflation has spooked both the Stock and Bond markets in recent weeks. Signs of inflation can hurt fixed investments like Mortgage Bonds and impact the home loan rates tied to them. The Fed, investors and anyone looking to purchase or refinance a home should keep a close eye on inflation news in the weeks and months ahead.

Retail Sales decreased 0.3 percent in January, while December’s reading was revised downward to 0 percent from a 0.4 percent increase, per the Commerce Department. The key highlight was that consumer spending wasn’t strong in recent months, and this could impact GDP expectations.

Mortgage Bonds have struggled in recent weeks, though they are attempting to stabilize. Home loan rates have risen but remain near historic lows.

If you or someone you know has questions about home loan rates, please contact me. I’m always happy to help.

Forecast for the Week  
Housing news highlights an otherwise quiet economic calendar. The markets are closed Monday for Presidents Day.
  • Existing Home Sales will be released on Wednesday.
  • Look for weekly Initial Jobless Claims on Thursday.
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. When Bond prices 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 have been trying to stabilize after their recent plunge. Home loan rates have risen but remain historically attractive.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday Feb 16, 2018)
Japanese Candlestick Chart

The Mortgage Market Guide View…  
Tech Talk: Helpful Hashtag Hints

“Hashtag” is the name for the pound or number sign that arose in conjunction with social media. In fact, the Oxford American Dictionary officially recognized “hashtag” for inclusion in 2010, and it became legal to play according to the Scrabble Dictionary in 2014.

In social media, hashtags are especially useful to add to posts if you want to identify a specific topic that people can search for. Knowing how to use hashtags beyond loose categorizing of content doesn’t have to be a challenge. Here are five simple ways to ensure your hashtags are more engaging with your audience.

Target your tribe. The more specific your hashtags, the more your audience is targeted and the better engagement you’ll have. For example, if you sell real estate in Austin, Texas, don’t just use #realestate, use #austinrealestate to reach more active local customers.

Short and sweet. Stay away from lengthier hashtags because most users won’t spend the time it takes to type out longer tags. Being too clever or obscure can also negatively affect engagement.

Own your own. Making up your own hashtag, branded or not, can be very effective. Just be sure to use a research tool like Hashtagify or RiteTag to check how it might already be used by competing products, services or just a hashtag trend before rolling it out in your content.

Keep it minimal. More hashtags may not necessarily mean more traction on a post. A hashtag overload can draw the attention away from your message and come off as unauthentic, unprofessional and even spammy.

Be a platform pro. Twitter, Facebook, Google+ and Instagram have different types of user interfaces, so it pays to understand best practices for using hashtags on the platform you favor.

Expand your social media reach by getting more out of your hashtags.

Sources: Hootsuite, UPS Store Small Business Blog

Economic Calendar for the Week of February 19 – February 23
Economic Report
Wed. February 21
Existing Home Sales
Thu. February 22
Jobless Claims (Initial)
The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. 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, 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.
Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Market Guide, 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.