Posts Tagged ‘new home sales’

December 30, 2013
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.

Mortgage Market News for the week of Dec. 6, 2013

December 6, 2013
MORTGAGE TIME
Mortgage Market News for the week of Dec. 6, 2013
Compliments of:
Patrick Gardner
Mortgage Loan Officer
NMLS ID: 378888
415-423-1424
Email me
Visit my website

LABOR MARKET IMPROVING
A wide range of major economic data released this week revealed an unexpectedly strong level of improvement in the labor market and other areas. This is good news for the economy, but it is negative for mortgage rates. As a result, mortgage rates ended the week higher.

The data released earlier in the week hinted at healthy improvement in the labor market, and Friday’s Employment report confirmed the gains. Against a consensus forecast of 180K, the economy added 203K jobs in November. The Unemployment Rate declined from 7.3% to 7.0%, the lowest level since November 2008. The economy has added an average of 193K jobs over the past three months. Several Fed officials have suggested that they would like to see sustainable job gains around 200K per month to confirm that the labor market is back on more stable ground before scaling back on monetary stimulus. This data brings the Fed closer to tapering its bond purchase program.

This week’s economic data revealed that the strength in the labor market is consistent with improvement in the overall economy as well. Third quarter GDP was revised substantially higher to 3.6% from 2.8%, well above the consensus of 3.0%. This was the fastest pace of growth since the first quarter of 2012. The ISM national manufacturing index rose to the highest level since April 2011. October New Home Sales increased 25%, but this was from a somewhat depressed level in September. Finally, Consumer Sentiment jumped to the highest level since July.

ALSO NOTABLE
Core PCE inflation was just 1.1% higher than one year ago
Weekly Jobless Claims declined below the 300K level
The European Central Bank made no change in rates
Gold prices declined to the lowest level since July

WEEK AHEAD
The most significant economic data next week will be the Retail Sales data and the PPI inflation report. Retail Sales account for about 70% of economic activity and will be released on Thursday. 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. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. The next Fed meeting will take place on December 18.