8 Countries Where There’s a Rush for U.S. Real Estate

8 Countries Where There’s a Rush for U.S. Real Estate

not always early, but ALWAYS on time….MORTGAGE TIME!

MORTGAGE TIME Mortgage Market News for the week of March 7, 2014

Compliments of: Patrick Gardner Mortgage Loan Officer NMLS ID: 378888 415-423-1424 Email me Visit my website   JOBS DATA AND UKRAINE It was a volatile week in mortgage markets. Early in the week, rapidly changing conditions in Ukraine caused a great deal of movement in mortgage rates, but there was little net impact. Later in the week, stronger than expected labor market data was negative for mortgage rates, and rates ended the week higher. Against a consensus forecast of 140K, the economy added 175K jobs in February, and the figures for the prior two months were revised a little higher. This took place, according to the Bureau of Labor Statistics, despite the largest weather related disruption since 1996. The Unemployment Rate unexpectedly rose from 6.6% to 6.7%, but this was due to an increase in the number of people that entered the labor force. The solid jobs report exceeded expectations nearly across the board. Since stronger economic growth raises future inflationary pressures, this was unfavorable news for mortgage rates. After Russia moved troops into Ukraine, the threat of an escalating conflict caused a “flight to safety” in financial markets on Monday. This involved a shift by investors to relatively safer assets, resulting in a large decline in stocks and significant improvement in bonds, including mortgage-backed securities (MBS). A complete reversal took place on Tuesday, however, after the Russian President said that Russia would not use military force in Ukraine. ALSO NOTABLE • ISM Services declined to the lowest level since February 2010 • The Treasury will auction $64 billion in securities next week • The European Central Bank (ECB) made no change in rates • Chinese manufacturing data fell to the lowest level in 8 months WEEK AHEAD The most significant economic report next week will be the Retail Sales data on Thursday. Retail Sales account for about 70% of economic activity. Before that, the JOLTS report, measuring job openings and labor turnover, will come out on Tuesday. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Friday. Import Prices and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. Changes in the situation in Ukraine also could have an impact on mortgage rates.

it’s a little late…yet still on time! MORTGAGE TIME

MORTGAGE TIME Mortgage Market News for the week of Feb. 21, 2014

Compliments of:   Patrick Gardner Mortgage Loan Officer NMLS ID: 378888 415-423-1424 Email me Visit my website   RATES HIGHER AFTER FED MINUTES The positive momentum in mortgage rates shifted direction after the release of the Fed Minutes on Wednesday. Investors viewed the Minutes as somewhat positive for stocks and negative for bonds. As a result, mortgage rates ended the week a little higher. The Minutes from the January 29 Fed Meeting revealed that Fed officials remained very divided as to the appropriate path for future policy. Overall, though, the perception of investors was that the position of the hawks remained solid, while the views of the doves may have weakened a little. As a reminder, “hawks” tend to favor less stimulus to help keep inflation low, while “doves” prefer more stimulus to boost economic growth. The Minutes stated that “a few participants” considered the possibility that it “might be appropriate” to raise the fed funds rate sooner than many expect. The Minutes also reinforced Fed Chair Yellen’s recent comments that there is a high hurdle for the Fed to pause in reducing its bond purchase program. The Fed’s bond purchases have helped keep mortgage rates low, and the Minutes reduced the likelihood that the program could be stretched out for a longer period of time. The economic data released this week continued to be affected by the unusually severe weather this winter. In particular, the housing reports all fell short of expectations. January Existing Home Sales declined 5% from December to the lowest level since July 2012. They were 15% below the peak levels seen last summer. On the plus side, total housing inventory available for sale increased. The results for January Housing Starts fell even farther below expectations with a decline of 16% from December. Building Permits declined as well. Finally, the February NAHB/ Wells Fargo Housing Market index showed that builder confidence dropped sharply. Both the National Association of Realtors (NAR) and the National Association of Home Builders (NAHB) attributed the weakness in recent data to a combination of bad weather, limited supply, and tight credit conditions. ALSO NOTABLE • Core CPI inflation was just 1.6% higher than one year ago • The Philly Fed index dropped to the lowest level since February 2013 • The Treasury will auction $96 billion in securities next week • Chinese PMI manufacturing data was weaker than expected   WEEK AHEAD Next week, New Home Sales will be released on Wednesday. Durable Orders, an important indicator of economic activity, will come out on Thursday. Pending Home Sales, Chicago PMI Manufacturing, and revisions to fourth quarter GDP will be released on Friday. Consumer Confidence and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

Rates at 2014 Lows – Mortgage Time

MORTGAGE TIME Mortgage Market News for the week of Jan. 10, 2014

Compliments of: Patrick Gardner Mortgage Loan Officer NMLS ID: 378888 415-423-1424 Email me Visit my website   JOB GAINS FALL SHORT Investors were focused on the strength of the labor market this week. A strong reading for job gains in Wednesday’s ADP report caused mortgage rates to move a little higher. The ADP data turned out to be a poor indicator for Friday’s weaker than expected Employment report, however, and mortgage rates ended the week lower. Against a consensus forecast of 200K, the economy added just 74K jobs in November. This was the smallest monthly increase in jobs since January 2011. Given that several other labor market indicators showed greater strength in December, many investors were skeptical about how accurately the data reflects the strength of the labor market. For one thing, bad weather likely was a factor in the shortfall, as the construction sector was particularly weak. Upward revisions to the November data also partly offset the December results, leaving average gains of about 160K over the last two months. Bottom line, though, the report fell short of expectations, causing mortgage rates to move lower after the news. In another twist, the Unemployment Rate unexpectedly declined from 7.0% to 6.7%, the lowest level since October 2008. Looking below the surface, reported job gains accounted for just 0.1% of the decline, while a large group of people leaving the labor force was responsible for the remaining 0.2% decline. While the headline Employment report is based on data collected from just large employers, the Unemployment Rate is derived from a separate survey of individual households. According to this survey, there were job gains of about 150K in December, while roughly 350K people were no longer seeking work and thus were removed from the labor force. Since the Unemployment Rate is simply the number people in the labor force seeking work divided by the total labor force, it counts equally whether a person stops seeking work by finding a job, giving up on the job search, or retiring. ALSO NOTABLE • The Trade Deficit declined to the lowest level since October 2009 • The European Central Bank (ECB) made no change in rates • Mel Watt was sworn in for a five-year term as Director of the FHFA • Janet Yellen was confirmed to be the next Chair of the Fed WEEK AHEAD The most significant economic data next week will be the Retail Sales data and the monthly inflation reports. Retail Sales account for about 70% of economic activity and will be released on Tuesday. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Wednesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday. CPI looks at the price change for finished goods which are sold to consumers. Housing Starts and Industrial Production will come out on Friday. Import Prices, Philly Fed, Empire State, Consumer Sentiment, and the Fed’s Beige Book will round out a busy schedule.

MORTGAGE TIME

MORTGAGE TIME

Mortgage Market News for the week of Oct. 18, 2013

Compliments of:

Patrick Gardner

Mortgage Loan Officer

NMLS ID: 378888

415-423-1424

Email me

Visit my website

 

CONGRESS REACHES DEAL

Congress approved a deal on Wednesday to raise the debt ceiling and to fund the government for a few months. The news lifted both stocks and bonds. The S&P 500 index reached an all-time high. Mortgage rates also improved nicely after the deal was reported.

 

The deal extends the government’s borrowing authority until February 7, removing the risk of default. The deal also funds the government until January 15, ending the shutdown. It provides more time for negotiations, but it does not bring the two sides any closer to reaching a long-term agreement on the major fiscal issues. For mortgage markets, even the slight risk of default had been enough to prevent some investors from purchasing government bonds, including mortgage-backed securities (MBS). After the deal, these investors resumed their purchases of MBS, which lifted MBS prices and lowered mortgage rates.

 

Mortgage rates benefitted from the agreement for another reason. Investors now think that the Fed will wait longer to begin to taper its bond purchase program. Fed officials have expressed reluctance to reduce monetary stimulus while future fiscal policy remains uncertain. If history is any indication, the debate in Congress over a longer-term budget and deficit reduction package likely will continue right to the extended dates. In addition, before tapering the Fed will want to see how much the government shutdown slowed the economy. The flow of economic data produced by the government will resume next week, but it will take some time to sort out the impact of the shutdown from the underlying strength of the economy.

ALSO NOTABLE

•           The NAHB Home Builders confidence index fell slightly from multi-year highs

•           The Fed’s Beige Book reported “modest to moderate” economic growth

•           The Empire State index declined to the lowest level since May

•           The S&P 500 stock index rose to a record high

 

WEEK AHEAD

The end of the government shutdown means that the government will produce its economic reports again. The important September Employment report, originally scheduled for October 4, will be released on Tuesday. The other postponed reports, including CPI and Retail Sales, will be released in coming weeks. The rest of the schedule for next week includes Existing Home Sales on Monday, Jobless Claims on Thursday, and Consumer Sentiment on Friday. New Home Sales was originally scheduled for Thursday, but the report may be delayed.

Coliseum City

Coliseum City