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Rhonda Porter
Loan Officer MLO121324
Mortgage Master Service Corp.
Phone: (206) 718-9488
Fax (253) 234-2229
License: CLA 40445
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  In This Issue  

Last Week in Review: Volatility continued in the markets among some good economic news.

Forecast for the Week: All eyes will be on the upcoming Fed meeting. Plus key housing, inflation and manufacturing reports will be released.

View: Facebook can be a great tool for your business--unless you make the below mistakes.

  Last Week in Review  

"I don't know where we're going, but we're on our way!" That quote from a Little Rascals episode can certainly apply to the markets of late, as uncertainty has Stocks and Bonds moving in various directions. Read on to learn what happened last week, and how home loan rates were impacted.

There was some good news for the labor sector as Weekly Initial Jobless Claims fell in the latest week to 334,000. This was below expectations and the lowest level since early May. The 4-week moving average, which evens out any seasonal abnormalities, also fell. In addition, consumers opened their wallets in May as Retail Sales rose at the fastest pace in three months, led by demand for groceries, autos and building materials.

Over in housing news, RealtyTrac reported that foreclosures rose by 2 percent in May from April. However, it's important to note that foreclosures have fallen 28 percent from May 2012. And there was some really good news for our economy: Standard & Poor's, one of the big three credit-rating agencies, raised the credit outlook for the U.S. from negative to stable.

What does all of this mean for home loan rates? Positive economic news often causes money to flow out of Bonds and into Stocks, as investors hope to take advantage of gains. When this happens, Bonds can worsen--and so can home loan rates, as they are tied to Mortgage Bonds. We continued to see some of that dynamic last week.

One key factor to monitor is inflation, which hurts the value of fixed investments like Bonds. Inflation at the wholesale level rose unexpectedly in May. However overall inflation pressures remain muted and that should help keep Bonds and home loan rates at attractive levels.

Another factor that has helped Bonds and home loan rates remain attractive is the Fed's Bond purchase program known as Quantitative Easing. The Fed has been purchasing Bonds and Treasuries at the rate of $85 billion a month since late last year. But as the housing and labor markets have begun to improve, there has been talk that the Fed should taper their purchases soon. The uncertainty surrounding this decision has led to much of the volatility in the markets of late.

The bottom line is that home loan rates remain attractive 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  

A full week of reports is ahead, plus the Fed meets!

  • The week kicks off with news from the manufacturing sector with Monday's Empire State Index, followed by the Philadelphia Fed Index on Thursday.
  • In the housing sector, Housing Starts and Building Permits will be released on Tuesday. Also look for Existing Home Sales on Thursday.
  • Tuesday also brings important inflation news, with the Consumer Price Index for May.
  • As usual on Thursday, Weekly Initial Jobless Claims will be released.

In addition, the Fed's next two-day meeting of the Federal Open Market Committee begins Tuesday, with its Policy Statement and rate decision released at 2:00 pm ET Wednesday. The markets will be listening closely to see if the Fed makes further mention of tapering its Bond purchase program.

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, Bonds have attempted to stabilize and regain some improvements. Home loan rates remain at attractive levels and I will continue to monitor their movement closely.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Jun 14, 2013)
Japanese Candlestick Chart
  The Mortgage Market Guide View...  

Do You Make These Mistakes on Facebook?
4 Ways to Keep Followers Engaged and Wanting More

Facebook can be a great tool for businesses to connect with their clients and potential clients. But it's critical to recognize that certain types of communication can actually hinder engagement. Here are four important mistakes to avoid.

Social media sparring
Facebook is not a forum for argument. If your followers get into a tussle, don't be tempted to moderate. And if someone wants to pick a fight with you, or say disparaging things about your company, don't retaliate. Figure out some way to handle the situation as if it were happening in public (because it is).

Anybody in there?
Not responding to posts from followers or even delaying your replies too long hurts engagement. Try to respond within the same day, even if it's just with a 'Like' on the comment.

Less is more
You don't need fifteen posts a day to engage your followers. In fact, if you spam the News Feed like that, it's a recipe for getting 'Unliked' fast, not to mention killing your engagement rates over time. One influential social media management company says two posts a day is just about perfect for peak engagement, as long as posts are engaging.

Don't always be closing
Facebook is best used to share stimulating and diverse content, create meaningful conversations, and build your community. Once you've built that community, sales and referrals flow naturally from the trust you create. Companies that do nothing but promote products or services have weak communities. Followers engage best with videos, pictures or interesting topical questions -- anything that puts a human face on your brand is a good thing.

Don't get left behind, the sooner you start building your community, the faster your business will benefit. Make sure to pass these tips along to your clients and colleagues!

Economic Calendar for the Week of June 17 - June 21

Economic Report
Mon. June 17
Empire State Index
Tue. June 18
Consumer Price Index (CPI)
Tue. June 18
Core Consumer Price Index (CPI)
Tue. June 18
Housing Starts
Tue. June 18
Building Permits
Wed. June 19
FOMC Meeting
Thu. June 20
Jobless Claims (Initial)
Thu. June 20
Existing Home Sales
Thu. June 20
Philadelphia Fed Index

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.

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