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Mortgage Market Guide: Inflation Hot, GDP Not

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Mortgage and Lending with America’s Mortgage Solutions | The Christian Penner Mortgage Team NMLS# 368289
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Mortgage Market Guide: Inflation Hot, GDP Not

  In This Issue  
     
 
Last Week in Review: Housing, GDP and inflation news made headlines, but were the numbers friendly to Mortgage Bonds and home loan rates?

Forecast for the Week: All eyes will be on the February Jobs Report.

View: Create rituals that yield success.
 
     
  Last Week in Review  
     
 

“Oh, I get by with a little help from my friends.” The Beatles. News headlines shared the latest word on housing sales, Gross Domestic Product and inflation … helping home loan rates remain in historically low territory.

Inflation Hot, GDP Not

In housing news, January Existing Home Sales edged 0.4 percent higher from December to an annual rate of 5.47 million units, according to the National Association of REALTORS®. The increase was the highest level since July 2015. In the past year, sales are up 11 percent, the largest year-over-year gain since the 16.3 percent annual rise in July 2013. January New Home Sales, on the other hand, fell 9.2 percent from December.

The second reading of Gross Domestic Product (GDP) from the final quarter of 2015 showed growth of 1 percent, above the 0.4 percent expected and the 0.7 percent recorded in the first reading. GDP is one of the primary gauges of the health of our country’s economy and represents the total dollar value of all goods and services produced over a specific time period. Readings should be at least 2.5 percent to signify growth.

Finally, inflation, as measured by the Core Personal Consumption Expenditures index, rose 0.3 percent in January from December and year-over-year 1.5 percent. Inflation is not Bond-friendly news, meaning it also isn’t a good sign for home loan rates, which are tied to Mortgage Bonds. While inflation has not been an issue for some time, after the rise in January’s Core Consumer Price Index as well, it is definitely something to monitor.

The mix of news held Mortgage Bonds fairly steady the past week, helping keep home loan rates near historic lows.

If you or someone you know has any questions about home loans, refinancing or housing, please don’t hesitate to contact me.
 
     
  Forecast for the Week  
     
 
While manufacturing and housing data abound this week, February’s Jobs Report could be the market mover.
  • Economic data kicks off Monday with the Chicago PMI report along with Pending Home Sales.
  • On Tuesday, the ISM Index will give a national view of manufacturing.
  • Wednesday brings the first of two key labor market reports with the ADP National Employment Report. The Fed’s Beige Book will also be released.
  • Weekly Initial Jobless Claims, Productivity and the ISM Services Index will be released on Thursday.
  • The week culminates with the February Jobs Report, which includes Non-farm Payrolls, the Unemployment Rate, Average Work Week and Hourly Earnings.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices 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 are 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, Mortgage Bonds have held relatively steady in the spate of economic news.
 
Chart: Fannie Mae 3.5% Mortgage Bond (Friday Feb 26, 2016)
Inflation Hot, GDP Not
 
     
  The Mortgage Market Guide View…  
     
 
6 Rituals for Better Productivity

“Civilization advances by extending the number of operations we can perform without thinking about them.” Alfred North Whitehead, Mathematician

Do you feel like you aren’t accomplishing what you really want to each day? Or feel so pressed for time that your work feels haphazard? New York Times best-selling author Tony Schwarz says you can free up your mind, and your day, by turning some of your activities into rituals.
Here are six rituals you can create to help save time and brain space:

Work out first thing in the morning. Don’t fret about when you might fit in a workout. Just schedule it and do it. You may not even feel like it, but going through the motions can quickly improve your feelings and sharpen your focus for the day. Then it’s done!

Complete your most important tasks first. You’re fresher at the beginning of the day. Start with an early victory before things really get going each day to boost your motivation and morale.

Only work in 90-minute segments. Working longer than three hours straight creates lack of focus and fatigue. Use your smartphone to remind you to stop for well-deserved breaks throughout the day. Stretch your legs with a quick walk around the office or the block.

Write down ideas immediately. You can text or email yourself, talk into the voice recorder on your smartphone, or keep a small notepad with you at all times (including beside your bed). Capture ideas when you get them, and they won’t continue bouncing around your mind all day (or night).

Stick to your bedtime to ensure you get at least eight hours of rest. Skimping on sleep is an entry point for illness and lack of energy for focus.

Automate as much as possible. There are dozens of tasks you can automate to simplify your day and enjoy more work-life balance, from bill payments to letting calls go to voicemail while you’re working. Just remember, the less you have to think about doing mundane tasks, the more time you have for important things.

Please feel free to pass these helpful tips along to your team, clients and colleagues.

Source: Harvard Business Review
 
Economic Calendar for the Week of February 29 – March 04
Inflation Hot, GDP Not

 

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Questions, Comments or For more information you can contact Christian Penner Branch Manager at: Cell/Text: (561) 373-0987 or visit us online at www.ChristianPenner.com

Christian Penner Branch Manager Equity Prime Mortgage

NMLS#368289 a division of Equity Prime Mortgage NMLS #21116

Cell/Text: (561) 373-0987


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Cell/Text: (561) 373-0987

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