Mortgage Time…better late than never!

MORTGAGE TIME
Mortgage Market News for the week of Nov. 22, 2013
Compliments of
Patrick Gardner
Mortgage Loan Officer
NMLS ID: 378888
415-423-1424
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FED MINUTES REVEAL SPLIT
Once again, the biggest influence on mortgage rates was shifting sentiment about future Fed policy. The Fed Minutes and statements from Fed officials caused investors to move forward their expected timing for scaling back the bond purchase program. As a result, mortgage rates ended the week a little higher.

The Minutes from the October 30 Fed meeting released this week revealed a great deal of disagreement among Fed officials about when to change policy. Just last week, testimony from the nominee for the next Fed Chief, Janet Yellen, encouraged investors that the Fed will not begin to scale back its bond purchases any time soon. In contrast, what emerged from the Minutes is that a number of Fed officials expect improvement in the labor market to warrant tapering to begin “in coming months.” The added demand for mortgage-backed securities (MBS) from the Fed has been a major factor in keeping mortgage rates low, and any signs that the Fed may begin to taper either sooner or later have consistently caused significant movement in mortgage rates. The unexpectedly hawkish tone of the Fed Minutes offset the dovish comments from Yellen, leaving mortgage rates roughly unchanged over the two-week period.

The October Existing Home Sales report released this week showed a drop of 3% from September. There were a number of reasons for the decline, including the government shutdown which took place during the first half of the month. Even with the decline in October, Existing Home Sales were still 6% higher than one year ago. The housing sector has been an important source of strength for the economy this year, so investors will be closely watching next month’s data.

ALSO NOTABLE
Core CPI inflation was just 1.7% higher than one year ago
Retail Sales showed healthy gains in October
The Dow stock index climbed to a record high above 16,000
Gold prices declined to a four-month low

WEEK AHEAD
Next week, Pending Home Sales will be released on Monday. Housing Starts and Consumer Confidence will come out on Tuesday. Durable Orders, Chicago PMI, and Consumer Sentiment will be released on Wednesday. In addition, there will be Treasury auctions on Monday, Tuesday, and Wednesday. Mortgage markets will be closed on Thursday in observance of Thanksgiving and will close early on Friday. Enjoy your holiday!

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