MMG Weekly 4/6/2015

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

In This Issue…  

Last Week in Review: The Jobs Report for March was a disappointment, while home values continue to grow at normal levels.

Forecast for the Week: The economic calendar is quiet, but the minutes from the Fed’s March meeting and the beginning of earnings season could cause volatility.

View: Change is inevitable, and communicating change effectively is crucial to success. The four ideas below can help.

Last Week in Review  

“If you want the flowers in your garden to be glorious and to smell good, you must risk an occasional stink.” Lord Harewood. The Jobs Report for March was a stinker, but hopefully not a sign of more bad reports to come from the labor sector.

Employers added 126,000 new jobs in March, well below the 250,000 expected. This was the slowest pace of job creations since December 2013, and it ended 12 straight months of job gains above 200,000. The lower-than-expected number could be partly due to the now-ended port strike on the West Coast, along with harsh winter weather.

The number of job gains for January and February were also revised lower by 69,000, which added to the sour tone of the report. However, the Unemployment Rate did remain steady at 5.5 percent. It will be important to see if the March report was just an anomaly, or a sign of more struggles ahead for the labor sector.

In housing news, the S&P/Case-Shiller Home Price Index rose by 4.6 percent from January 2014 to January 2015. This is the biggest gain since September and up from the 4.4 percent annual rate recorded in December. The lofty price gains seen in 2013 and early 2014 may have cooled, but home price gains continue to be steady at what is considered normal levels. Also, February Pending Home Sales came in better than expected, up 3.1 percent from January and up 12 percent from this time last year.

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  

After last week’s heavy-hitters, this week’s calendar features just a few economic reports.

  • On Monday, look for the ISM Services Index, which is a national non-manufacturing index.
  • Wednesday brings the minutes from the March meeting of the Federal Open Market Committee.
  • Weekly Initial Jobless Claims will be reported, as usual, on Thursday.

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 rallied in recent days, helping home loan rates remain near historic lows.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday April 3, 2015)

Japanese Candlestick Chart

The Mortgage Market Guide View…  

4 Keys to Communicating Change

Change is inevitable. Teams change. Jobs change. Policies and processes change. Technologies change.

Managing change is not always easy, but effectively communicating change of any kind is essential to success. Here are four ideas that can help:

Use a variety of communication methods. Everyone has a unique perspective based on prior experiences. This shapes what they hear, how they interpret it, and how they react. No one message or delivery will resonate with everyone. Some people may need to hear and read messages many times in different formats to be comfortable. Understanding this can help you prepare a wider-reaching communication strategy.

Honesty is key. People will speculate and try to read between the lines of what is being communicated. To minimize this, communicate honestly with concrete details.

Frequency is essential. Every implementation plan should have a communication strategy that ensures ongoing, predictable communication cycles through a variety of media before, during and after implementation. Each audience (e.g., clients, employees, vendors, partners and regulatory agencies) will have different needs. If you have nothing new to report, reiterate what was shared previously about timelines, deadlines and deliverables.

You must learn and adapt. As you communicate, keep your ear to the ground and listen for opportunities to adapt your strategy or clarify a message.

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

Economic Calendar for the Week of April 6 – April 10
Economic Report
Mon. April 06
ISM Services Index
Wed. April 08
FOMC Minutes
Thu. April 09
Jobless Claims (Initial)

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:
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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.
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