MMG Weekly 4/14/2015

Guy R. Vetrano NMLS# 183357
Mortgage Loan Originator
Bay Equity Home Loans
Phone: 480.500.6000 x 6017
Mobile: 602-692-7196
E-fax: 602.532.7304
gvetrano@bayeq.com
www.bayequityhomeloans.com

In This Issue…  

Last Week in Review: Home prices continue to rise at normal levels, while home loan rates continue to hover near record lows.Forecast for the Week: The busy economic calendar and full slate of earnings reports could lead to volatility in the markets.

View: Are your cell phone costs out of hand? Check out these three simple steps for shopping your plan.

Last Week in Review  

April showers bring May flowers. This spring is certainly poised for a blooming housing season as home loan rates hover near record lows.Home price gains are also holding steady. Research firm CoreLogic reported that home prices, including distressed sales, rose by 5.6 percent from February 2014 to February 2015. Prices were also up 1.1 percent from January to February. CoreLogic has forecasted that prices are expected to rise by 5.1 percent from February 2015 to February 2016, which would keep home price gains at normal levels.

CoreLogic’s Chief Economist, Dr. Frank Nothaft, said, “Since the second half of 2014, the dwindling supply of affordable inventory has led to stabilization in home price growth with a particular uptick in low-end home price growth over the last few months.”

In other housing news, RealtyTrac reported that monthly house payments on a median-priced home are more affordable than the monthly fair market rent on a three-bedroom property in 76 percent of U.S. counties. With home loan rates just above all-time record lows, this is great incentive for people looking to purchase homes this spring.

And in news to watch as we move ahead this year, the minutes from the Fed’s March meeting revealed that a hike in the Fed Funds Rate (the rate banks charge each other for lending money overnight) will be data dependent, with the timing still to be determined. When this rate hike does happen, volatility in the markets is a distinct possibility, but whether Mortgage Bonds and home loan rates will benefit remains to be seen.

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  

The economic calendar is packed with key reports on inflation, housing, manufacturing and more.

  • Economic data begins on Tuesday with Retail Sales, which will gauge the level of consumer spending in March.
  • The Fed will be closely watching two inflation reports this week for any signs of pricing pressures: the wholesale-measuring Producer Price Index on Tuesday and the Consumer Price Index on Friday.
  • In the manufacturing sector, look for the Empire State Index on Wednesday and the Philadelphia Fed Index on Thursday.
  • Over in housing, the NAHB Housing Market Index will be released on Wednesday, while Thursday brings Housing Starts and Building Permits.
  • Weekly Initial Jobless Claims will be released on Thursday, as usual.
  • Ending the week, 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 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 have been in a sideways pattern in recent days. Home loan rates remain near record lows.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday April 10, 2015)

Japanese Candlestick Chart

The Mortgage Market Guide View…  

3 Simple Steps to Reshop Your Cell-Phone Plan
These tips can help you save big.
By the editors of Kiplinger’s Personal Finance, Kiplinger.comStep 1
Match a plan with your usage patterns. At www.wirefly.com, enter the type of phone you want, the number of minutes and text messages and the amount of data you typically use in a month, whether you prefer having a contract or not, and the number of phone lines you’d like. The tool will produce a list of suitable plans and prices. A basic prepaid plan may be a good fit for casual users, but if you stream video or music regularly, look into a plan with bountiful data. If you crave the newest devices, focus on an early-upgrade plan that allows you to trade in your phone after you’ve made a certain number of payments.

Step 2
Look for deals. Wireless carriers are battling to grab your business. But check the fine print and do the math to make sure you’re getting a better deal. For example, Sprint recently promised AT&T and Verizon customers that they would pay half their current plan’s monthly price if they switched to a similar Sprint plan. Sprint also offered to reimburse any early-termination fees and to waive activation fees. But you have to buy a new Sprint phone at full retail price (or agree to a leasing program), and you must trade in your old phone or pay a $200 fee. In addition, the plan price may jump when you eventually upgrade your device.

Step 3
Check network coverage in your area. Ask neighbors, coworkers and friends who have service with carriers you’re considering about the reception. At www.rootmetrics.com, you can check your location on a coverage map to see network performance based on RootMetrics’ testing.

The payoff
You may find a better wireless plan at a lower price.

Reprinted with permission. All Contents ©2015 The Kiplinger Washington Editors. Kiplinger.com.

Economic Calendar for the Week of April 13 – April 17

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. April 14
08:30
Retail Sales
Mar
NA
-0.6%
HIGH
Tue. April 14
08:30
Retail Sales ex-auto
Mar
NA
-0.1%
HIGH
Tue. April 14
08:30
Producer Price Index (PPI)
Mar
NA
-0.5%
Moderate
Tue. April 14
08:30
Core Producer Price Index (PPI)
Mar
NA
-0.5%
Moderate
Wed. April 15
08:30
Empire State Index
Apr
NA
6.9
Moderate
Wed. April 15
10:00
Housing Market Index
Apr
NA
53
Moderate
Wed. April 15
02:00
Beige Book
Apr
NA
NA
Moderate
Thu. April 16
10:00
Philadelphia Fed Index
Apr
NA
5.0
HIGH
Thu. April 16
08:30
Building Permits
Mar
NA
1092K
Moderate
Thu. April 16
08:30
Housing Starts
Mar
NA
897K
Moderate
Thu. April 16
08:30
Jobless Claims (Initial)
4/11
NA
281K
Moderate
Fri. April 17
08:30
Consumer Price Index (CPI)
Mar
NA
0.2%
HIGH
Fri. April 17
08:30
Core Consumer Price Index (CPI)
Mar
NA
0.25
HIGH
Fri. April 17
10:00
Consumer Sentiment Index (UoM)
Apr
NA
93.0
Moderate

Equal Housing Lender. This is not a commitment to lend or extend credit. Restrictions may apply. Rates may not be available at time of application. Information and/or data are subject to change without notice. All loans are subject to credit approval. Not all loans or products are available in all states. Bay Equity LLC, 100 California Street Suite 1100, San Francisco, CA 94111-4561; NMLS ID#76988. Arizona Mortgage Banker License #0910340; NMLS consumer access: www.nmlsconsumeraccess.org
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