Darryl Steffey
Senior Loan Officer, NMLS# 107940
Residential Mortgage Services
Cell Phone: 610-587-7746
2208 Quarry Drive, Suite 205
West Lawn, PA 19609
  In This Issue...  
  Last Week in Review: While lower oil prices are giving people reason to cheer, there was some disappointing news in the housing sector.

Forecast for the Week: A full slate of economic reports will be released ahead of the Christmas holiday.

View: Saying "no" can be easy with these five tips.
 
     
  Last Week in Review  
  "You make me wanna (Shout!)" These days, many people are shouting for joy as gas prices continue to plunge. But was the rest of the week's news cause to celebrate? Read on for details.

Falling gas prices were definitely a key factor leading consumer prices lower in November, as the Consumer Price Index fell by 0.3 percent. The inflation-reading gauge posted its largest monthly decline in six years. Low inflation is good news for Bonds, as inflation reduces the value of fixed investments like Bonds. This means low inflation is also good news for home loan rates, which are tied to Mortgage Bonds.

Over in the housing sector, November Housing Starts fell by 1.6 percent from October to an annual rate of 1.028 million units. Single-family starts fell 5.4 percent, while the volatile multi-family segment rose by 6.7 percent. Building Permits in November also declined. Despite these decreases, the housing sector has been improving overall. In addition, the recent strong Jobs Report for November is a good sign for economic growth next year—and that should help the housing sector continue its otherwise improving trend.

Also of significance: The Fed held its last Federal Open Market Committee meeting of 2014, and it noted that it will keep the Fed Funds Rate (the rate banks use to lend money to each other overnight) low until it feels that the economy can function normally with higher rates. This led to a rally in Stocks, while Mortgage Bonds and home loan rates remain near 18-month bests.

The bottom line is that home loan rates remain near some of their best levels of the year, and now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.
 
     
  Forecast for the Week  
  The first half of the week will be busy, with key reports on housing, inflation and economic growth.
  • In the housing sector, Existing Home Sales for November will be released on Monday. November New Home Sales follow on Tuesday.
  • The final reading on third quarter Gross Domestic Product will be closely watched when the numbers are delivered on Tuesday.
  • Tuesday also brings several more key reports, including the Consumer Sentiment Index, Durable Goods Orders, Personal Income, Personal Spending and Personal Consumption Expenditures (the Fed's favorite measure of inflation).
  • Weekly Initial Jobless Claims will be released on Wednesday instead of Thursday due to the Christmas holiday.
The Stock markets will close early at 1:00 p.m. EST on Wednesday, December 24, while the Bond markets will be closing at 2:00 p.m. EST. All markets will be closed on Thursday, December 25 in observance of Christmas. On Friday, December 26 there will be normal market hours.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while 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—and when they 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 were 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 remain near 18-month highs, meaning home loan rates are still hovering near historic lows.
 
Chart: Fannie Mae 3.5% Mortgage Bond (Friday December 19, 2014)
Japanese Candlestick Chart
 
     
  The Mortgage Market Guide View...  
  5 Ways to Say No

The holidays aren't the only time of year people overcommit themselves—and being able to say no isn't always easy. But there are ways to say no that make all the difference, and can help you preserve both your sanity and your relationships.

Christine Carter, Ph.D., sociologist, happiness expert at UC Berkeley's Greater Good Science Center, and author of "The Sweet Spot: How to Find Your Groove at Home and Work" (coming January 2015) offers five effective ways to say no:

1. Vague but effective: "Thank you for asking, but that isn't going to work out for me."

2. Ask me later: "I want to do that, but I'm not available until April. Will you ask me again then?"

3. Keep trying: "None of those dates work for me, but I would love to see you. Send me some more dates."

4. Try me last minute: "I can't put anything else on my calendar this month, but I'd love to do that with you sometime. Will you call me right before you go again?"

5. Gratitude: "Thank you so much for your enthusiasm and support! I'm sorry I'm not able to help you at this time."

If you'd like to find out even more effective ways you can say no, read Carter's full article 21 Ways to "Give Good No."

Please feel free to pass these great tips along to your team, clients and colleagues!

Source: Greater Good Science Center


Economic Calendar for the Week of December 22 - December 26
Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. December 22
10:00
Existing Home Sales
Nov
NA
 
5.26M
Moderate
Tue. December 23
10:00
New Home Sales
Nov
NA
 
458K
Moderate
Tue. December 23
10:00
Personal Consumption Expenditures and Core PCE
YOY
NA
 
1.6%
HIGH
Tue. December 23
10:00
Personal Consumption Expenditures and Core PCE
Nov
NA
 
0.2%
HIGH
Tue. December 23
10:00
Personal Spending
Nov
NA
 
0.2%
Moderate
Tue. December 23
10:00
Personal Income
Nov
NA
 
0.2%
Moderate
Tue. December 23
10:00
Consumer Sentiment Index (UoM)
Dec
NA
 
93.8
Moderate
Tue. December 23
08:30
GDP Chain Deflator
Q3
NA
 
1.4%
Moderate
Tue. December 23
08:30
Gross Domestic Product (GDP)
Q3
NA
 
3.9%
Moderate
Tue. December 23
08:30
Durable Goods Orders
Nov
NA
 
0.4%
Moderate
Wed. December 24
08:30
Jobless Claims (Initial)
12/20
NA
 
289K
Moderate
 
 
 
 
 
The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.
 
As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.
 
Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Market Guide, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.