A measure of consumer sentiment rose in January for the fifth straight monthly gain, according to data released Friday, as job gains helped put worries about U.S. government finances in the background.
The final January reading of the University of Michigan/Thomson Reuters gauge of consumer sentiment reached 75.0, compared to a preliminary report of 74.0 and a December reading of 69.9. The sentiment gauge, which covers how consumers view their personal finances as well as business and buying conditions, averaged about 87 in the year before the start of the most recent recession.
Recent job growth has been improving, though still well below the pace needed to bring unemployment significantly below the 8.5% rate it was last month.
Obviously, this is important to housing. As consumers feel better about the economy, the more likely they are to purchase a home.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +150 -91 basis points from last Friday to the prior Friday which moved mortgage rates to their lowest level in 4 months.
This was a complete reversal from the previous week where we lost -91 basis points.
MBS shot up (and therefore mortgage rates moved lower) primarily for three reasons. Front and center was the Fed.
The Fed left their key interest rates alone but made a statement that their fed fund rate would essentially be zero until 2014 which caused MBS to rally.
Also the 4th QTR GDP numbers did show economic growth at 2.8% but fell short of the market expectations of 3.0%. This helped mortgage rates because this report was not inflationary.
U.S. bonds also benefited from concerns in Europe that the renegotiations between Greece and their bond holders was not going well. This could trigger Greece to finally default and cause some additional financial instability in the region.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
Date
ET
Economic Release
30-Jan
8:30
PCE (MoM)
30-Jan
8:30
Core PCE (MoM
30-Jan
8:30
Core PCE (YoY)
30-Jan
9:55
PCE (YoY)
30-Jan
8:30
Pesonal Income
31-Jan
9:00
S&P Case-Shiller Home Price Index
31-Jan
9:45
Chicago Purchasing Managers Iindex
31-Jan
10:00
Consumer Confidence
1-Feb
7:00
MBA Mortgage Applications
1-Feb
8:15
ADP Employment
1-Feb
10:00
Consutruction Spending
1-Feb
10:00
ISM Manufacturing
1-Feb
10:00
ISM Prices Paid
1-Feb
10:30
EIA Crude Oil Stocks
1-Feb
17:00
Total Vehicle Sales
2-Feb
8:30
Initial Jobless Claims
2-Feb
8:30
Continuing Jobless Claims
2-Feb
8:30
Nonfarm Productivity
2-Feb
8:30
Unit Labor Costs
3-Feb
8:30
Average Weekly Hours
3-Feb
8:30
Nonfarm Payrolls
3-Feb
8:30
Avg. Hourly Earnings (MoM)
3-Feb
8:30
Avg. Hourly Earnings (YoY)
3-Feb
8:30
Unemployment Rate
3-Feb
10:00
Factory Orders
3-Feb
10:00
ISM Non-Manufacturing
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Home sales rose in December to the highest pace in nearly a year. The gain coincides with other signs that show the troubled housing market improved at the end of last year.
The National Association of Realtors said Friday that sales increased 5 percent last month to a seasonally adjusted annual rate of 4.61 million, the best level since January 2011 and the third straight monthly increase.
Sales are increasing at a time when the market is flashing other positive signs. Mortgage rates are at record-low levels. Homebuilders have grown slightly less pessimistic because more people are saying they might be open to buying a home this year. And home construction picked up in the final quarter of last year.
The median sales price rose 2.3 percent to $164,500 in December.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -91 basis points from last Friday to the prior Friday which moved mortgage rates upward.
The biggest economic surprise was the large decrease in the weekly Initial Jobless Claims data which is certainly positive for the economy, but negative for bonds.
But the real catalyst was a change in market sentiment that Greece’s bond holders were close to accepting the new terms of a “voluntary” hair cut of 60% to 70% on what they are owed. This removed some of the “fear factor” premium in bonds that have kept mortgage rates artificically low for the past 8 weeks. .
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
Date
ET
Economic Release
24-Jan
10:00
Richmond Fed Manufacturing Index
25-Jan
7:00
MBA Mortgage Applications
25-Jan
10:00
Housing Price Index (MoM)
25-Jan
10:00
Pending Home Sales (MoM)
25-Jan
10:30
EIA Crude Oil Stocks change
25-Jan
14:15
Fed Interest Rate Decision
26-Jan
8:30
Continuing Jobless Claims
26-Jan
8:30
Durable Goods Orders
26-Jan
8:30
Durable Goods Orders ex Transportation
26-Jan
8:30
Initial Jobless Claims
26-Jan
10:00
Leading Indicators (MoM)
26-Jan
10:00
New Home Sales
26-Jan
10:00
New Home Sales (MoM)
27-Jan
8:30
Gross Domestic Product Annualized
27-Jan
8:30
Gross Domestic Purchases Price Index
27-Jan
8:30
Real Personal Consumption Expenditures (QoQ)
27-Jan
9:55
Reuters/Michigan Consumer Sentiment Index
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
The number of U.S. homes that received a foreclosure filing fell to a four-year low in 2011 as a slowdown in processing hit the market, RealtyTrac said in a report on Thursday.
Foreclosure filings, which include default notices, scheduled auctions and bank repossessions, slid by 34 percent in 2011, the lowest level since 2007, just as the housing market was starting to crumble. RealtyTrac said there were filings on 1,887,777 homes last year.
Bank seizures of homes fell to 804,423 from 1,050,500 in 2010, also marking the lowest level in four years.
“A big part that is inflating the size of the decrease is a continuing extended foreclosure process,” said Daren Blomquist, director of marketing communications at RealtyTrac.
Nevada ranked as the state with highest foreclosure rate for the fifth year in a row, with one in 16 Nevada homes receiving at least one foreclosure filing in 2011. Even so, Nevada saw a 31 percent decrease in foreclosure activity for the year.
The length of time for foreclosure processing continued to increase in the final quarter of the year. Homes took on average 348 days to move through the process, up from 336 days in the third quarter and 305 days in the fourth quarter of 2010.
Foreclosures took the longest in New York state, where homes foreclosed in the fourth quarter took an average 1,019 days to complete the process. RealtyTrac also released foreclosure activity for December, which fell to a 49-month low of 205,024 homes, down nearly 9 percent from November. But bank repossessions rose 10 percent to 61,774.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +14 basis points from last Friday to the prior Friday which moved mortgage rates slightly lower.
We had a mixed bag of economic data with very strong readings in Consumer Sentiment but we had weaker than expected Retail Sales data.
Demand for our 10 year Treasury auction was very strong but pulled back on the 30 year Treasury bond auction.
With the long weekend, traders moved their money into bonds on Friday which helped to push mortgage rates lower.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
Date
ET
Economic Release
16-Jan
Martin L. King’s Birthday
17-Jan
8:30
NY Empire State Manufacturing Index
18-Jan
7:00
MBA Mortgage Applications
18-Jan
8:30
Producer Price Index (MoM)
18-Jan
8:30
Producer Price Index (YoY)
18-Jan
8:30
Producer Price Index ex Food & Energy (MoM)
18-Jan
8:30
Producer Price Index ex Food & Energy (YoY)
18-Jan
9:00
Net Long-Term TIC Flows
18-Jan
9:00
Total Net TIC Flows
18-Jan
9:15
Capacity Utilization
18-Jan
9:15
Industrial Production (MoM)
18-Jan
10:00
NAHB Housing Market Index
18-Jan
10:30
EIA Crude Oil Stocks change
19-Jan
8:30
Building Permits (MoM)
19-Jan
8:30
Consumer Price Index (MoM)
19-Jan
8:30
Consumer Price Index (YoY)
19-Jan
8:30
Consumer Price Index Ex Food & Energy (MoM)
19-Jan
8:30
Consumer Price Index Ex Food & Energy (YoY)
19-Jan
8:30
Continuing Jobless Claims
19-Jan
8:30
Housing Starts (MoM)
19-Jan
8:30
Initial Jobless Claims
19-Jan
10:00
Philadelphia Fed Manufacturing Survey
20-Jan
10:00
Existing Home Sales (MoM)
20-Jan
10:00
Existing Home Sales Change
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Real Estate used to be about location, location, location. Now it is most certainly about jobs, jobs, jobs.
We received some welcome news on the jobs front last week:
The private sector added a seasonally adjusted 325,000 jobs during the month, up from 204,000 in November, payroll-processing firm ADP said:
It marked the biggest monthly gain since December 2010, and was stronger than expected. Economists surveyed by Briefing.com were forecasting a gain of 180,000 jobs for the month. And the great news is that half of the gains were made by small business (companies with fewer than 50 employees).
Headline National Unemployment Rate Drops to 8.5%:
The U.S. Unemployment Rate unexpectedly fell to 8.5 percent last month as job creation was more robust than expected, providing continued signs that the nation’s labor market is improving gradually.
Growth in manufacturing jobs helped offset a loss in government positions, while wages edged higher and the length of the work week also lengthened a bit. Job gains came from a variety of quarters: Transportation and warehousing surged by 50,000, the couriers and message industry rose 42,000, and retail added 28,000. Manufacturing grew by 23,000 and the hospitality industry continued its brisk pace, adding 24,000 jobs in December and 230,000 over the past year at food and drinking establishments.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -82 basis points from last Friday to the prior Mortgage backed securities (MBS) gained +95 basis points from last Friday to the prior Friday which moved mortgage rates lower.
We had much better than expected U.S. economic data. Pending Home Sales, Consumer Confidence, and the Chicago PMI were all very strong.
Normally, these type of strong readings would cause bonds to sell off and your mortgage rates to rise. But last week was a holiday shortened week that saw very low volumes.
Traders simply “parked” their funds into the safe-haven of bonds over the holiday week which increased demand for bonds and temporarily lowered mortgage rates.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
Date
ET
Economic Release
Actual
Cons.
Previous
9-Jan
15:00
Consumer Credit Change
$7.30B
$7.65B
10-Jan
10:00
IBD/TIPP Economic Optimism (MoM)
42.8
10-Jan
10:00
Wholesale Inventories
0.50%
1.60%
11-Jan
7:00
MBA Mortgage Applications
-4.10%
11-Jan
10:30
EIA Crude Oil Stocks change
2.209M
11-Jan
14:00
Fed’s Beige Book
12-Jan
8:30
Continuing Jobless Claims
3.595M
12-Jan
8:30
Initial Jobless Claims
375K
372K
12-Jan
8:30
Retail Sales (MoM)
0.20%
0.20%
12-Jan
8:30
Retail Sales ex Autos (MoM)
0.30%
0.20%
12-Jan
10:00
Business Inventories
0.40%
0.80%
12-Jan
14:00
Monthly Budget Statement
-79.0B
-137.3B
13-Jan
8:30
Import Price Index (YoY)
-0.10%
9.90%
13-Jan
8:30
Trade Balance
($44.60)
-$43.47B
13-Jan
9:55
Reuters/Michigan Consumer Sentiment Index
70.5
69.9
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
The number of Americans who signed contracts to buy homes in November rose to the highest level in a year and a half. The best reading on pending homes sales since a federal home-buying tax credit expired appeared to encourage traders on Wall Street.
The Realtors group said Thursday that its index of sales agreements jumped 7.3 percent last month to a reading of 100.1. A reading of 100 is considered healthy. The last time the index was that high was in April 2010, one month before the tax credit expired.
Contract signings usually indicate where the housing market is headed. There’s a one- to two-month lag between a signed contract and a completed deal.
Homes are the most affordable they’ve been in decades. Long-term mortgage rates are at historic lows and prices in most metro areas have tumbled since late 2006.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -82 basis points from last Friday to the prior Mortgage backed securities (MBS) gained +95 basis points from last Friday to the prior Friday which moved mortgage rates lower.
We had much better than expected U.S. economic data. Pending Home Sales, Consumer Confidence, and the Chicago PMI were all very strong.
Normally, these type of strong readings would cause bonds to sell off and your mortgage rates to rise. But last week was a holiday shortened week that saw very low volumes.
Traders simply “parked” their funds into the safe-haven of bonds over the holiday week which increased demand for bonds and temporarily lowered mortgage rates.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
Date
ET
Economic Event
3-Jan
10:00
Construction Spending (MoM)
3-Jan
10:00
ISM Manufacturing
3-Jan
10:00
ISM Prices Paid
3-Jan
14:00
FOMC Minutes
4-Jan
7:00
MBA Mortgage Applications
4-Jan
10:00
Factory Orders (MoM)
4-Jan
16:00
Total Vehicle Sales
5-Jan
8:15
ADP Employment Change
5-Jan
8:30
Continuing Jobless Claims
5-Jan
8:30
Initial Jobless Claims
5-Jan
10:00
ISM Non-Manufacturing
5-Jan
11:00
EIA Crude Oil Stocks change
6-Jan
8:30
Average Hourly Earnings (MoM)
6-Jan
8:30
Average Hourly Earnings (YoY)
6-Jan
8:30
Average Weekly Hours
6-Jan
8:30
Nonfarm Payrolls
6-Jan
8:30
Unemployment Rate
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Mortgage Specialists, LLC
831 N. 98th Street, Omaha NE, 68114
Phone: 800-519-1870
To Unsubscribe, please click on the following email link: brent@mtg-specialists.com
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for January, 2012.
