In This Issue
Last Week in Review: There are signs that the labor and housing markets are improving. But how did home loan rates react?
Forecast for the Week: Important housing, inflation, and manufacturing news is ahead.
View: Still not sure how and when to use social media for your business? Be sure to read the information below.
Last Week in Review
“It all depends on how we look at things.” Those words by Carl Jung describe the importance of perspective…and that’s exactly what the news from last week requires. Read on for details and what they mean for home loan rates.
There was good news as Americans filing weekly Initial Jobless Claims fell to 323,000. This was below expectations and the lowest level since January 2008. In addition, the four week moving average (which evens out any seasonal abnormalities) fell to 336,000–the lowest since November 2007.
The job market is improving, but an important concern remains. The Labor Force Participation Rate (LFPR) is at its lowest level since the late 1970’s. The LFPR calculation is quite simple. If you are 16 years old and not in the military, then you either have a job or you don’t. The ratio of people “participating” or working is then compared to the total population.
In housing news, research firm CoreLogic reported that home prices rose 10.5 percent in March 2013 from March 2012. This was the biggest annual increase since March 2006 and the 13th consecutive increase in home prices. There was also a 1.9 percent gain from February to March and prices increased in all states except four. However, home prices remain 25 percent lower than the peak of April 2006.
What does this mean for home loan rates? Remember that good economic news often causes money to flow out of safer investments like Bonds and into Stocks, as investors try to take advantage of gains. This means good economic news–while a good sign for our recovery–can also be “bad” news for home loan rates, as they are tied to Mortgage Bonds. We saw this dynamic in the markets last week.
However, 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 economic calendar is filled with several key reports this week.
- Monday brings the Retail Sales Report for April.
- We’ll get a read on inflation at both the wholesale and consumer levels this week with the Producer Price Index on Wednesday and the Consumer Price Index on Thursday.
- There’s a double dose of manufacturing news with Wednesday’s Empire State Index and Thursday’s Philadelphia Fed Index.
- Thursday also brings news on the housing sector with Housing Starts and Building Permits for April.
- Weekly Initial Jobless Claims will also be reported as usual on Thursday.
- Ending the week on Friday, the Consumer Sentiment Index for May will be released.
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 fell below a key technical level. But home loan rates remain near record bests and I’ll continue to monitor all the news closely.
The Mortgage Market Guide View…
Social Media in 3 Links:
Choose the Link that Matches Your Level
You’ve heard it before: “Social media is the future of business” or “If you’re not using social media, you won’t be in business for long.”
Those sentiments can seem like overstatements, but the underlying ideas are still true. Social media is one of the most powerful forces in business today and using it can help strengthen your business relationships.
The key is understanding how and when to use social media.
But who has time? The tools and sites are always changing… best practices can be hard to nail down… and once you have a handle on it, you still have to find the time in your day to actually do it.
Here are 3 links that provide the information you need to be more productive, regardless of what stage you’re at in the social media movement!
1. Need a reason?
The following link provides an eye-catching, 4-minute video that highlights the importance and benefits of social media’s impact on business. Plus, the bottom of the web page lists 28 interesting stats and sources to learn more.
Take 4 minutes to watch this video now:
http://www.socialnomics.net/2013/01/01/social-media-video-2013/
2. More in Less Time
Believe it or not, you can integrate 6 different types of social media into your day in just 30 minutes. If you’re not sure what to do or how to get started–without wasting your entire day online–then this resource is for you.
It features specific steps and suggested times to allocate to each tool. And, it even displays the advice in an easy-to-understand infographic:
http://socialmediatoday.com/brianna5mith/1373116/how-rock-social-media-30-minutes-day-infographic
3. Dig Into the Details
If you’ve already established a social media presence, then it’s time to make sure you understand how to get the most out of your efforts.
Discover why people turn to social media…when the best time to tweet is…and how to move beyond the generic “engage in conversations” advice. Plus, there are plenty of stats and charts to help you see what’s really going on and how you can benefit from it.
Best of all, it’s a video–so you can sit back and take it all in without reading or clicking through slides:
http://vimeo.com/19228431
The advice in the links above can help you either get started or make your efforts more productive.
The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. 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, we do not make any representations as to its accuracy or completeness and as a result, 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.
In the unlikely event that you no longer wish to receive these valuable market updates, please email: don@donparsons.com
If you prefer to send your removal request by mail the address is:
Don Parsons
20250 Acacia Street, Suite 120
Newport Beach, CA 92660