Mortgage Market Guide: Housing Starts Hit 5-month High

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Mortgage Market Guide: Housing Starts Hit 5-month High


  In This Issue  

Last Week in Review: Housing Starts were hot in July. Consumer inflation kept cool.

Forecast for the Week: Housing news and Gross Domestic Product are the reports to watch.

View: Check out four tools to make your writing more polished and professional.

  Last Week in Review  

“I’m on my way. I’m on my way. Home sweet home.” Motley Crue. More families may soon be on their way to homeownership as July Housing Starts hit their highest level in five months. Meanwhile, consumer inflation remained tame.

Housing Starts Hit 5-month High

July Housing Starts rose 2.1 percent from June to an annual rate of 1.21 million units, above the 1.167 million expected. The sector continues to be a bright spot in a muddling along economy. The 1.21 million is the second-highest Housing Starts rate since the recession, and multifamily units are leading the increase. Building Permits fell 0.1 percent from June to an annual rate of 1.152 million, in line with expectations. These figures should be welcome news to potential homebuyers, especially those in areas that have struggled with a limited supply of homes.

Consumer inflation remained tame in July because of low energy costs. The Consumer Price Index (CPI) was unchanged from June to July, as expected. Core CPI, which strips out volatile food and energy, rose 0.1 percent, just below the 0.2 percent expected. The Core rate rose 2.2 percent on an annual basis, just below the 2.3 percent recorded in June. Inflation reduces the value of fixed investments, like Mortgage Bonds. This means tame inflation tends to be good news for home loan rates, since they are tied to Mortgage Bonds.

Inflation is also one of the many economic factors the Federal Open Market Committee (FOMC) considers when setting monetary policy. The recent release of the July FOMC meeting minutes did not provide any clear signal regarding when the Fed may next change the Fed Funds Rate. This is the rate banks use to lend money to one another overnight. September provides the next opportunity for the Fed to consider an adjustment.

For those looking to invest in a home right now, home loan rates remain in historically low territory.

If you or anyone you know has any questions about home loan rates or products, please contact me.

  Forecast for the Week  
Housing news and economic growth in the form of Gross Domestic Product will be closely watched.
  • The week begins with New Home Sales being released on Tuesday followed by Existing Home Sales on Wednesday.
  • Weekly Initial Jobless Claims and Durable Goods Orders will be delivered on Thursday.
  • On Friday, the Consumer Sentiment Index and the second reading on second quarter Gross Domestic Product 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. 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 traded in a tight pattern recently. home loan rates remain in historically low territory.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Aug 19, 2016)
Japanese Candlestick Chart
  The Mortgage Market Guide View…  

4 Tools to Make Business Writing a Snap

“He was such a bad writer, they revoked his poetic license.” — Milton Berle

Even professional writers sometimes find writing difficult. And when there’s a deadline to meet, the right words can be hard to come by. So if you’re looking to write better business and sales letters, or occasional social media and blog posts, thankfully there are plenty of apps and add-ons that can help.

Here are four tools to help make your writing more professional and polished:

After the Deadline is a free, open-source grammar, style and spelling checker for social media, blog or other browser-based posting. Either paste your text into the online checker or download the plug-ins for your browser of choice, including Chrome, Firefox, OpenOffice, WordPress and others.

Proofread Bot can help improve your writing on the spot as well as make you less reliant on the program over time. The automatic proofreader highlights the errors it finds and teaches you with brief explanations. Available for Office Online, Google Docs, several browsers and blogger platforms for as little as .007 cents per word (or $35 for review of 500,000 words).

WordRake will help you convey what you mean clearly and concisely, eliminating jargon and wordiness from your style. This Word and Outlook add-on puts Microsoft’s native grammar and style checker to shame. But at $129 to $199 annually … it’s pricey. The tool is probably most suitable for those wishing to add blogging, articles, press releases or other long-form writing to their marketing mix.

Letter templates can eliminate those blank page blues if you’re called upon to write a reference, recommendation or request. Microsoft Office Online users can get free business letter templates (not to mention other PowerPoint and Excel goodies too!). Small-business site 4hb has over 680 sample letters for almost any need. Just copy and paste the content and modify to suit.

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

Source: Business 2 Community

Economic Calendar for the Week of August 22 – August 26
Housing Starts Hit 5-month High


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Questions, Comments or For more information you can contact Christian Penner at: Call/Text: (561) 373-0987 or visit us online at

The Christian Penner Mortgage Team, A Branch of 
American Financial Network, Inc

CORP NMLS# 237341 ; Equal Opportunity Employer ; Equal Opportunity Lender American Financial Network, Inc. 10 Pointe Drive, Suite 330, Brea, CA 92821.

Call/Text: (561) 373-0987

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Call/Text: (561) 373-0987


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