MMG Weekly 5/11/15

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: Job growth rebounded in April, while home prices continue to rise.

Forecast for the Week: Look for news on retail sales, consumer sentiment and wholesale inflation in the second half of the week.

View: Having a busy spring season? These five tips will help you navigate hectic times with ease.

Last Week in Review  

Put a spring in your step. Job growth bounced back in April, after the dismal numbers for March. How did Mortgage Bonds and home loan rates react? Read on below.

The April Jobs Report showed that 223,000 jobs were created, which was essentially in line with expectations. The Unemployment Rate fell to 5.4 percent, matching lows not seen since May 2008.

However, there were some downsides in the details. The Labor Force Participation Rate (LFPR) is at 62.8 percent, still near the lows seen in the late 1970s. The LFPR measures the proportion of working-age Americans who have a job or are looking for one, and it should be moving higher in a recovery.

Meanwhile, the number of jobs created in March was revised even lower, down to 85,000 from the 126,000 previously reported. The question now is whether March’s reading was just an anomaly due to the harsh weather across the country, or signs of slowing job growth. Stay tuned, as future reports will be revealing.

In housing news, research firm CoreLogic reported that home prices, including distressed sales, rose 5.9 percent from March 2014 to March 2015. This was the 37th straight month of consecutive annual gains in home prices nationally. CoreLogic noted that limited supply, buyer demand and low rates continue to put upward pressure on home prices in most markets.

Mortgage Bonds have moved lower in recent weeks, but were able to rally due to the mixed Jobs Report. Home loan rates remain attractive, and this season 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 second half of the week is busy, featuring several key reports.

  • Economic data begins on Wednesday with Retail Sales for April, which will gauge consumer spending.
  • Thursday brings the Producer Price Index, which measures inflation at the wholesale level.
  • Weekly Initial Jobless Claims will also be released on Thursday.
  • The week comes to an end with the Consumer Sentiment Index and Empire State 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 rallied in recent days after a downward trend. Home loan rates remain attractive.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday May 8, 2015)

Japanese Candlestick Chart

The Mortgage Market Guide View…  

5 Easy Ways to Manage Busy Times

When life and work are busy, there never seems to be enough time in the day. You can navigate hectic times with ease when you use these five tips:

Establish a firm deadline for decision making. Then, mark your calendar to take action. For example, schedule one hour to look online and check reviews for the best smartphone, then schedule the purchase for 2:00 p.m. that Thursday.

Remember your personal systems. Eating the same breakfast, exercising on a schedule and only taking appointments during set time-windows are simple ways you can streamline things.

Leverage technology. Automate as much of your workload as you can. For instance, you can free up your time by using Customer Relationship Management (CRM) software, setting up automatic bill pay, and subscribing to a newsletter service instead of writing your own.

Use smartphone smarts. Stop juggling to-do lists in your mind (or texting yourself), and get an organizer app like Any.do or Awesome Note.

Know your quadrants. Stephen Covey built a billion dollar empire with a single time-management exercise. By determining which items are (1) immediate and important deadlines, (2) long-term goals, (3) distracting or lower priority activities, or (4) activities yielding little value, you can clarify your workdays.

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

Economic Calendar for the Week of May 11 – May 15

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Wed. May 13
08:30
Retail Sales
Apr
0.0%
0.9%
HIGH
Wed. May 13
08:30
Retail Sales ex-auto
Apr
0.5%
0.4%
HIGH
Thu. May 14
08:30
Jobless Claims (Initial)
5/09
NA
265K
Moderate
Thu. May 14
08:30
Producer Price Index (PPI)
Apr
-0.1%
0.2%
Moderate
Thu. May 14
08:30
Core Producer Price Index (PPI)
Apr
NA
0.2%
Moderate
Fri. May 15
08:30
Empire State Index
May
5.0
-1.2
Moderate
Fri. May 15
10:00
Consumer Sentiment Index (UoM)
May
NA
95.9
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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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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