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Mortgage Marketing Guide: Housing and GDP Something to Sing About

In This Issue…  
Last Week in Review: August New Home Sales and second quarter Gross Domestic Product surged, while sales of existing homes in August disappointed.
[su_spacer size=”10″] Forecast for the Week: The highly anticipated Jobs Report rounds out a week full of economic indicators.
[su_spacer size=”10″] View: Develop your leadership skills with six must-see TED talks.
Last Week in Review  
“Sing with me, sing for the year, sing for the laughter, sing for the tear.” Aerosmith. While year-over-year housing data sings of a strengthening market, some monthly results are true tearjerkers.

housing

August Existing Home Sales, as reported by the National Association of REALTORS®, declined 4.8 percent from July to an annual rate of 5.31 million. This was below the 5.50 million expected. The disappointing drop comes after three straight monthly gains. Year-over-year sales, however, have risen for 11 consecutive months and are 6.2 percent above a year ago.
[su_spacer size=”10″] August New Home Sales surged to the highest rate since early 2008 and were up nearly 22 percent from August 2014. July’s numbers also were revised higher, signaling continued strength in the U.S. housing market.
[su_spacer size=”10″] Second quarter Gross Domestic Product (GDP) data was also a reason to sing. Economic growth far outpaced growth in the first quarter, led by consumer and business spending. The final GDP reading rose 3.9 percent, above expectations and well above the anemic 0.6 percent registered in the first quarter. GDP measures the total output of goods and services produced in the U.S., and is the broadest measure of economic activity.
[su_spacer size=”10″] The Fed will continue to monitor all of these economic factors over the next month as it prepares for another discussion on whether or not to raise its benchmark Fed Funds Rate at the end of October. The Fed Funds Rate is the rate at which banks lend money to each other overnight. While an increase in the Fed Funds Rate does not directly impact home loan ratesFed Funds Rates may increase once the Fed takes action, depending on the market and overall economy.
[su_spacer size=”10″] For now, Fed Funds Rates remain near historic lows. If you have any questions at all about rates, the mortgage market or housing, please let me know.

Forecast for the Week  
The week is full of key economic data on housing, manufacturing and inflation, all leading up to the highly anticipated September Jobs Report on Friday.
  • Monday kicks off with Personal Income and Personal Spending as well as the inflation reading Personal Consumption Expenditures (PCE).
  • Housing data will be released Monday and Tuesday with Pending Home Sales followed by the S&P/Case-Shiller Home Price Index.
  • Also on Tuesday, Consumer Confidence will be reported.
  • The ADP National Employment Report will be released Wednesday.
  • Manufacturing numbers will come from the Chicago PMI on Wednesday followed by the national ISM Index on Thursday.
  • As usual, weekly Initial Jobless Claims will also be reported on Thursday.
  • Finally, the week closes with the September Jobs Report on Friday, which includes the closely watched Non-farm Payrolls and Unemployment Rate.
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.
[su_spacer size=”10″] 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.
[su_spacer size=”10″] 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.
[su_spacer size=”10″] As you can see in the chart below, Mortgage Bond prices have remained higher in recent weeks, keeping home loan rates near historic lows.
[su_spacer size=”10″]
Chart: Fannie Mae 3.5% Mortgage Bond (Friday September 25, 2015)
Japanese Candlestick Chart
The Mortgage Market Guide View…  
6 TED Talks for Developing Powerful Leadership
[su_spacer size=”10″] You don’t have to go to management school to learn how to be a great leader. These short TED lectures will help you unleash your leadership potential. Watch them yourself, make a day of it and host your own “leadership retreat” for employees, clients or referral partners, or use them as part of a “lunch and learn” discussion.
[su_spacer size=”10″] The Power of Believing That You Can Improve – Carol Dweck researches motivation, why people succeed (or don’t) and how to foster success. In this talk, she describes two ways to think about a problem that’s slightly too hard for you to solve.
[su_spacer size=”10″] The Key To Success? Grit – Angela Lee Duckworth defines grit as “passion and perseverance for long-term goals.” She explains her theory of “grit” as a predictor of success.
[su_spacer size=”10″] Plug Into Your Hard-wired Happiness – Executive, educator and life coach Srikumar Rao discusses how happiness is hardwired into us and easier to achieve than many people think.
[su_spacer size=”10″] 3 Rules to Spark Learning – Educator Ramsey Musallam shows how curiosity and experimentation are the keys to powerful innovation.
[su_spacer size=”10″] The Power of Vulnerability – Researcher Brené Brown explains why being vulnerable helps you address, acknowledge and work through almost any internal resistance in yourself or others.
[su_spacer size=”10″] How Too Many Rules at Work Keep You From Getting Things Done – Business Consultant Yves Morieux shows how measurement and processes can be counterproductive and how to make more room for freedom and collaboration.
[su_spacer size=”10″] Feel free to pass these helpful tips along to your team, clients and colleagues!
[su_spacer size=”10″] Source: Inc.com
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Economic Calendar for the Week of September 28 – October 02
CALENDAR

 


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– Mortgage Marketing Guide: Housing and GDP Something to Sing About

The Christian Penner Mortgage Team | Cell/Text: (561) 373-0987

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