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.

Your Weekly Mortgage Time is Here…Late, but here Nonetheless

MORTGAGE TIME Mortgage Market News for the week of Jan. 17, 2014

Compliments of: Patrick Gardner Mortgage Loan Officer NMLS ID: 378888 415-423-1424 Email me Visit my website INFLATION REMAINS TAME Mortgage rates began the week with downward momentum following last Friday’s big miss on the Employment report. That, combined with low inflation, more than offset this week’s slightly stronger than expected economic growth data, and mortgage rates ended the week a little lower. With the Fed’s recent decision to reduce its bond purchases, investors were left evaluating what they believed to be the appropriate level of mortgage rates for the current economic environment. In short, moderate economic growth and low inflation represent relatively favorable conditions for mortgage rates. This week, the December Retail Sales report revealed gains consistent with moderate growth. Since Retail Sales account for about 70% of economic activity, investors pay close attention to this data. Two of the more significant monthly inflation reports also were released this week, the Consumer Price Index (CPI) and the Producer Price Index (PPI), and both confirmed that inflation remains tame. Core CPI was just 1.7% higher than one year ago, well below the Fed’s target level of 2.0%, while Core PPI was even lower at 1.4% on an annual basis. JOLTS, another report released this week, is quickly gaining prominence with investors because it is considered to be a favorite of incoming Fed Chair Janet Yellen. The JOLTS survey measures Job Openings and Labor Turnover levels, providing another level of insight into labor market conditions. Since the Unemployment Rate has been heavily influenced recently by people leaving the labor force rather than by job gains, investors and Fed officials are eager for additional details to judge the strength of the labor market. The November JOLTS data showed that Job Openings unexpectedly rose to the highest level since March 2008. The percentage of people quitting their jobs was nearly unchanged. ALSO NOTABLE • The Empire State index rose to the highest level since May 2012 • Capacity Utilization increased to the highest level since May 2008 • The Fed’s Beige Book reported moderate economic growth • Unemployment in the euro zone remained at a record high 12.1% WEEK AHEAD The Economic Calendar will be nearly empty next week. Existing Home Sales, Leading Indicators, and Jobless Claims will be released on Thursday. Mortgage markets will be closed on Monday in Observance of MLK Day.

MORTGAGE TIME Mortgage Market News for the week of Dec. 27, 2013

Compliments of:   Patrick Gardner Mortgage Loan Officer NMLS ID: 378888 415-423-1424 Email me Visit my website     QUIET HOLIDAY WEEK The mortgage market was quiet during Christmas week. The few economic reports released this week, including Durable Orders, Jobless Claims, and New Home Sales, were mostly stronger than expected. As a result, mortgage rates ended the week a little higher. While the headline results for this week’s New Home Sales report revealed a decline from the prior month, this obscured the substantial improvement. New Home Sales dipped slightly in November, but this was from a level in October which was revised substantially higher. In fact, the revised October reading was the highest level since July 2008. November New Home Sales were 17% higher than one year ago. This was another in a string of recent housing market reports which provide reasons to be optimistic heading into 2014. On December 18, the Fed announced that it will begin to scale back its bond purchases. The added demand from the Fed for mortgage-backed securities (MBS) has been a major factor helping to keep mortgage rates low, so a reduction in bond purchases is clearly negative for mortgage rates. Considering this, it is interesting to see that mortgage rates have moved only a little higher since the Fed announcement. In other words, the taper was almost completely priced in to mortgage rates ahead of the actual announcement. By contrast, the reaction in the stock market to the Fed statement was much larger. Investors were pleased that the Fed intends to hold the fed funds rate low until much greater labor market improvement is seen, and the Dow stock index has climbed roughly 600 points to a record high. ALSO NOTABLE • The IMF raised its outlook for the US economy next year • Core PCE inflation was just 1.1% higher than one year ago • 10-yr Treasury yields crossed above the 3.0% level • The Dow stock index rose to a record high   WEEK AHEAD The important monthly Employment report will not be released until January 10, leaving a light week for economic data to begin the new year. Pending Home Sales will be released on Monday. Chicago PMI Manufacturing and Consumer Confidence will come out on Tuesday. ISM Manufacturing and Construction Spending will be released on Thursday. Mortgage markets will close early on Tuesday and will be closed on Wednesday in Observance of the New Years holiday.

What’s Influencing a Stall in the Housing Recovery?

What’s Influencing a Stall in the Housing Recovery?
Posted by RE-Insider on 10/04/13 • Categorized as Industry News

Over the past twelve months, the housing market has been booming with a much anticipated recovery. This rebound was fueled by many factors falling in line at the right time; low prices and low interest rates combined with a small supply of houses available, ultimately prompting many investors and buyers to enter the market resulting creating bidding wars which began to drive prices up.

Now, prices are higher than we’ve seen in years, and mortgage rates have been moving up as well. This has lowered affordability, and the market is starting to cool down because of it, leading to many concerns over a short-term stall.

While it is still hard to tell what the final impact of the recent cooling will be, there are a few key factors playing a role in the market’s cooling and recovery which should be watched.

One factor which should be noted is how quickly affordability has decreased. Prices have moved up at unbelievable rates since a year ago, and now that mortgage rates are increasing, many buyers are being deterred to enter the market. New home orders rose only by 1% in August from the year before, major decline from the 11% increase in July.

Lack of available housing is also having an impact on the recovery. While demand plays a large role in both the amount and price of houses sold, the lack of available housing is still holding back many buyers. Listings were up by 20% in August from the start of the year, but this is still far below the already depressed levels of one year ago.