Send to a Friend


 
Rhonda Porter
Loan Officer MLO121324
Mortgage Master Service Corp.
Phone: (206) 718-9488
Fax (253) 234-2229
License: CLA 40445
rhonda@rhondaporter.com
www.mortgageporter.com
 
Follow Me On:      


  In This Issue  
     
 

Last Week in Review: Consumers are feeling confident. Find out why.

Forecast for the Week: Important news is ahead on the labor front.

View: What are you "not doing" to help your productivity? See the important tips below.

 
     
  Last Week in Review  
     
 

"The great thing in the world is not so much where we stand as in what direction we are moving." Oliver Wendell Holmes. Consumers are certainly feeling more confident about the direction our economy is moving. Read on for details and what they mean for home loan rates.

Consumer Confidence, which measures how optimistic or pessimistic consumers are with respect to the economy in the near future, hit a five-year high in May, coming in at 76.2. The Consumer Sentiment Index, a similar measure, also came in above expectations for May.

There was also good news on the housing front, as the Case Shiller 20-city Home Price Index rose 10.9 percent year-over-year. This was above expectations and the best annual gain in seven years. In addition, the second estimate for first quarter Gross Domestic Product (GDP) rose by 2.4 percent. By comparison, the final reading of GDP for the fourth quarter of 2012 was 0.4 percent. GDP is an important measure of productivity growth and a key indicator of economic strength.

In inflation news, the Personal Consumption Expenditures (PCE), the Fed's favorite measure of inflation, shows that inflation remains tame. In fact, the year-over-year core PCE (which excludes volatile food and energy measurements) is running at 1.1 percent, well below the Fed's upper end target of 2 percent and just above the all-time low.

What does all of this mean for home loan rates? Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates (which are tied to Mortgage Bonds) improve. Strong economic news often has the opposite result. With several strong economic reports released last week, Bonds and home loan rates felt the impact.

However, helping Bonds and home loan rates is the fact that inflation remains non-existent, as inflation reduces the value of fixed investments like Bonds. A big question moving forward is: Will the Fed continue its Bond purchase program known as Quantitative Easing? While low inflation gives the Fed cover to do so, there are growing opinions that the program should come to an end.

The bottom line is that home loan rates remain near historic lows and now 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 heats up with important news on the labor front.

  • On Monday, we get data on manufacturing with the ISM Index.
  • Wednesday will be a full day with Productivity, ISM Services Index and the Fed's Beige Book.
  • As usual, Weekly Initial Jobless Claims will be reported Thursday. Last week, Initial Jobless Claims came in above expectation at 354,000. The data remains in a range that is consistent with just modest job growth.
  • On Friday, we end the week with the often market-moving Jobs Report for May, which includes Non-Farm Payrolls and the Unemployment Rate.

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 that home loan rates are based on.

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, May was a rough month for Bonds and home loan rates. But they remain near historic best levels and I will continue to monitor their movement closely.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday May 31, 2013)
Japanese Candlestick Chart
 
     
  The Mortgage Market Guide View...  
     
 
     
 

Power Productivity Points
4 Things to Put On Your "Not To Do" List

"Beware the barrenness of a busy life." Socrates

Working harder isn't always the answer to expansion. Counter intuitive as it may seem, sometimes not doing things can increase your productivity and reduce your stress--a powerful combination for anyone who works just about anywhere. Creating a "Not To Do" list is essential if you want to grow your business, or show your employer you deserve that promotion.

Here are four things you can not do starting today to give you the margin you need to think and act more clearly in business and life:

Dumb uses for smartphones. If you're constantly checking Facebook, answering or originating random text messages, or have any social media account alerts turned on, you'll never be as productive as you could be.

Only check e-mail twice a day. Turn off your alerts here, too. Whenever you click on the "Get Mail" button, your brain drip feeds small doses of Something-Important-Is-About-To-Happen-Juice (psychologists call it dopamine). Except, it's not true. Try out this tip for just one week and see if you don't accomplish more than you thought possible.

Stop answering the phone. Emergencies aside, send your calls to voicemail first and return them only during set times (and state those times on your voicemail greeting). This has three instant benefits. First, it tells people you are a focused person, which they will respect and even appreciate. Second, it makes you a focused person--keeping you on task and freeing you from interruptions you can't anticipate. Third, you can determine if you're the right person to handle the call or if it can be delegated.

Just say no. There is a big difference between being busy and being productive. Want to know where you're just busy? Keep track of everything you do every 30 minutes, every day, for one week. Then take all the items that aren't moving you toward your goals and stop doing them, delegate them to someone else, or hire someone to do them for you. What will you do with all that extra time? Concentrate only on activities and processes that make money or move you ahead.

The key to more productivity is not more work. The key is more focus. Creating your "Not To Do" List will reset your priorities, refresh your morale and could even remake your career.

Make sure to pass these tips along to your clients and colleagues!

Economic Calendar for the Week of June 03 - June 07

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. June 03
10:00
ISM Index
May
50.9
 
50.7
HIGH
Wed. June 05
08:15
ADP National Employment Report
May
157K
 
119K
HIGH
Wed. June 05
08:30
Productivity
Q1
0.6%
 
0.7%
Moderate
Wed. June 05
10:00
ISM Services Index
May
53.5
 
53.1
Moderate
Wed. June 05
02:00
Beige Book
Jun
 
 
 
Moderate
Thu. June 06
08:30
Jobless Claims (Initial)
6/1
347K
 
354K
Moderate
Fri. June 07
08:30
Non-farm Payrolls
May
164K
 
165K
HIGH
Fri. June 07
08:30
Unemployment Rate
May
7.5
 
7.5
HIGH
Fri. June 07
08:30
Hourly Earnings
May
0.2%
 
0.2%
HIGH
Fri. June 07
08:30
Average Work Week
May
34.4
 
34.4
HIGH
     



The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.

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.

Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Market Guide, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.