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What happened last week?
Mortgage Backed Securities (MBS) gained +61 basis points from last Friday's close which caused 30 year fixed rates to move lower for the week. One major movement during the week that was responsible for rates decreasing was Tuesday's Non-Farm Payroll release which I had mentioned in last week’s memo.
The market had also expected published reports of around 180K new jobs. However, the reading was much lower at 148K. For those of you who have ever heard Gary Keller (Author, Co-Founder and Chairman of Keller Williams Realty) speaking in Public you will know that new Job Reports are something the Real Estate industry should keep a close eye on as many economists think that we need at least 150K new jobs each month to see any measurable economic growth. In the Mortgage Lending World, bonds typically perform better in low or negative economic growth, so this reading was positive for bonds and therefore rates came down slightly.
The market had also expected published reports of around 180K new jobs. However, the reading was much lower at 148K. For those of you who have ever heard Gary Keller (Author, Co-Founder and Chairman of Keller Williams Realty) speaking in Public you will know that new Job Reports are something the Real Estate industry should keep a close eye on as many economists think that we need at least 150K new jobs each month to see any measurable economic growth. In the Mortgage Lending World, bonds typically perform better in low or negative economic growth, so this reading was positive for bonds and therefore rates came down slightly.
What’s Happening this Week?
A huge amount of economic data will be released this week due to several reports postponed during the government shutdown. Retail Sales, Consumer Confidence and Auto Sales Reports will give you a generally good insight into Consumer behaviors. We will also get read outs on manufacturing from the Chicago PMI and ISM Manufacturing Reports due. Expect a view on inflation and where it is heading with results from both the PPI & CPI (Producer Price Index & Consumer Price Index).
We will also get more data on the jobs front with ADP Private Payrolls and Initial Jobless Claims. On the Housing front we will get Pending Home Sales and the Case-Shiller Home Price Index. Of course, the focus will naturally be on Wednesday's Federal Open Market Committee's (FOMC aka "the Fed") interest rate decision and policy statement.
Bottom Line:
It is (thus far) good news for Home Buyers obtaining a mortgage. Most traders and economists do not expect the FOMC to make any changes to their policies or their time tables. Furthermore, traders view the New Job data as a signal that the Federal Reserve would have to keep their massive monthly $85 billion Treasury and MBS purchases in place until at least the 2nd quarter of 2014 which will keep Mortgage Rates at low levels for an extended period of time.
Seize the opportunity in your market. Happy selling!!
Information Provided by:
Information Provided by:
Craig Inglis | Senior Loan Officer
VanDyk Mortgage Corporation | NMLS: 307619 State: LO 11567
cinglis550@vandykmortgage.com| Phone: 727-456-4773 | Fax: 727-499-6789 | Toll Free: 1-888-572-7759 | Cell: 727-410-8773
263 Corey Ave | St Pete Beach, FL 33706 | www.VanDykFL.com
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"There is no I in Real Estate only YOU!"
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