Can Mortgage Rates Stay Low Forever?

The

Mortgage Rate Jig

If you have been a regular subscriber of this blog, you know a common topic over the past two years has been mortgage rates.

Perhaps you have wondered about my continued dialog on "buy now as interest rates are bound to go up"

Frankly, it what common sense dictated.  Though the Fed, by definition, was buying down interest rates through all the QE money flowing into bonds, everyone knew that was ending in October and that the economy has continued to improve, albeit a bit unsteady at times and not be broadly felt among all sectors(especiallya a 18.5 million were reported today as still unemployed!).

Yet, normally the expectation and then end of a major incentive would alone change the trajectory of the factor being impacted.  Thus, add the improving economy pressure on credit and the normal inflows to stocks from bonds, one would expect interest rates to climb at least modestly.

But, again in Jim Belote's Weekly Mortgage Update, we see that rates have remained steady and are at one of the lowest points in history.    Go Figure!!!

Read and comment!!!

Provided to you Exclusively by Jim Belote   For the week of Nov 17, 2014 | Vol. 12, Issue 46

Jim Belote Branch Manager, MBA Union Mortgage Group Phone: (757) 395-LOAN Fax: (757) 351-6471 E-Mail: jim@jimbelote.com 582 Lynnhaven Parkway, Suite 300 Virginia Beach, VA 23452

In This Issue...

Last Week in Review: The Bond markets were closed Tuesday in honor of Veterans Day, while the rest of the week was quiet with only a handful of economic reports on the calendar. Forecast for the Week: The Fed minutes could cause volatility. Plus, key housing reports, and is inflation still tame? View: Check out these five tips that can help yield more productive and meaningful work relationships.

Last Week in Review

"Home of the brave." The Bond markets were closed on Tuesday in honor of Veterans Day, and the brave men and women who have served and sacrificed to protect and preserve our great nation. The economic calendar was quiet the rest of the week, but there are some key highlights to note. In the labor sector, Weekly Initial Jobless Claims came in at 290,000. Claims have remained below 300,000 for nine straight weeks—a feat that has not occurred since 2000. In addition, claims are 20 percent lower than they were this time one year ago. However, all is not golden as 18.2 million Americans still say they can't find a full-time job. This is a big number, considering that we're five years into an economic recovery. While the labor sector is improving, there is still more work needed ahead. Oil prices continue to drift lower, reaching levels not seen since October 2011. This slide lower has put extra cash in consumers' pockets just in time for the holiday shopping season, and it helped Retail Sales in October bounce back from the negative numbers seen in September. However, all-time price highs in meat, dairy and produce could tap into these savings at the pump. Looking ahead, housing data is abundant in the coming week. And while the hot housing numbers from 2013 have cooled a bit this year, recent data suggest that the housing recovery is still intact. Existing Home Sales in September touched their highest level in a year, while New Home Sales hit a six-year high. These will be important numbers to watch as we look ahead to the housing sector, and whether its recovery continues, next year.  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

Important manufacturing, inflation and housing reports are ahead. Plus, the minutes from the Fed's latest meeting will be released. Look for a double dose of manufacturing news, with the Empire State Index on Monday and the Philadelphia Fed Index on Thursday. Two key inflation reports are ahead. The wholesale-measuring Producer Price Index will be delivered on Tuesday, followed by theConsumer Price Index on Thursday. Housing news is abundant this week. The NAHB Housing Market Index comes out on Tuesday, Housing Starts and Building Permits will be released Wednesday, and Existing Home Sales follows on Thursday. As usual, Weekly Initial Jobless Claims will also be announced on Thursday. In addition, investors will be closely scrutinizing the minutes from the late October Federal Open Market Committee meeting. The minutes, which will be released on Wednesday at 2:00 p.m. EST, will reveal details of the Fed's decision to end its latest round of Quantitative Easing. They could also give more clues as to the timing of rate hikes, which could lead to volatility in the markets. 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 continue to trade in a sideways pattern. Home loan rates remain near 18-month lows and I will continue to monitor them closely. Chart: Fannie Mae 3.5% Mortgage Bond (Friday Nov 14, 2014)

The Mortgage Market Guide View...

5 Tips for Providing Constructive Feedback Constructive feedback with colleagues and partners can yield more productive and meaningful work relationships. The next time something isn't quite working well in a process or on a project, consider these five steps that can help. 1. Tie to a goal Goals unite teams and provide direction. Whether you have a shared goal with a member of your network or know a colleague's professional goal, tying feedback to that larger goal situates it in more meaningful context. 2. Ask permission People get defensive if they are not prepared for feedback. Asking for permission puts individuals in a more open, receptive mindset. 3. Identify specific behavior Isolating a specific behavior reinforces that constructive feedback is about a behavior and not the character or quality of the individual. 4. Offer concrete action steps Detailed options to improve a behavior shift the conversation from the past to the future and how to best move forward. 5. Show support End positively. Reiterate goals and values. The following example illustrates how all five steps work together: "Hi, John. I know we want to wrap up this project quickly, but can I mention something that could help us work more effectively? A lot of interrelated tasks are happening at the same time. I don't know the status of your tasks unless I leave a voicemail or send an email and wait for a response. Could we chat on the phone each day for five minutes to keep each other in the loop? Or, could we send each other an email update each day? I appreciate the partnership we have on this project and want to make sure nothing falls through the cracks." On a final note, emails lack non-verbal cues. Give feedback face-to-face or over the phone, so the recipient hears your voice or sees your facial expression to minimize reading into your message. Sources: forbes.com, smallbusinesschron.com Economic Calendar for the Week of November 17 - November 21 Date ET Economic Report For Estimate Actual Prior Impact Mon. November 17 08:30 Empire State Index Nov NA 6.2 Moderate Tue. November 18 08:30 Producer Price Index (PPI) Oct NA -0.1% Moderate Tue. November 18 08:30 Core Producer Price Index (PPI) Oct NA 0.0% Moderate Tue. November 18 10:00 Housing Market Index Nov NA 54 Moderate Wed. November 19 02:00 FOMC Minutes 10/29 NA HIGH Wed. November 19 08:30 Building Permits Oct NA 1031K Moderate Wed. November 19 08:30 Housing Starts Oct NA 1017K Moderate Thu. November 20 08:30 Jobless Claims (Initial) 11/15 NA 290K Moderate Thu. November 20 08:30 Consumer Price Index (CPI) Oct NA 0.1% HIGH Thu. November 20 08:30 Core Consumer Price Index (CPI) Oct NA 0.1% HIGH Thu. November 20 10:00 Existing Home Sales Oct NA 5.17M Moderate Thu. November 20 10:00 Philadelphia Fed Index Nov NA 20.7 HIGH

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. 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, we do not make any representations as to its accuracy or completeness and as a result, 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. In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: jim@jimbelote.com If you prefer to send your removal request by mail the address is: Jim Belote Union Mortgage Group 582 Lynnhaven Parkway, Suite 300 Virginia Beach, VA 23452

How Much Longer Can Historic Low Rates Last???????????

Interest Rates

The Unbelievable Phenom

Since 2005, interest rates have been below the historical 7% good rate.  Except for the past 9, going on 10 years, a 7% rate was always the rate to buy a home.  Many times rates have be 8-10% with periods in the 14-18% range.

Thus, interest are an absolute Phenom to buyers and sellers.  Last two weeks, as shared in Jim's MMG Weekly below, interest rates have been below 4% for a well financed buyers.  Yet even a buyer with "a lesser financial profile" would still see a rate just over 4%.

No doubt the economy's slow recovery and the stock market recent stock fluctuations has kept investors in the safe haven of government and other bonds.   Jim again explains the indirect but effective relations between these two factors.

Yet, if you are still sitting on the sideline wondering if it is a good time to move, you have to be wondering when with this ride end.

Sure if you miss this rate and buy when rates have "zoomed up" to 5%, you will still have an interest rate rarely seen(except for the past 9-10 years and back in the 50s).

Keep up with this blog and you will know when the trend is turning!

But do you really want to wait??

Provided to you Exclusively by Jim Belote   For the week of Oct 27, 2014 | Vol. 12, Issue 43 Jim Belote Branch Manager, MBA Union Mortgage Group Phone: (757) 395-LOAN Fax: (757) 351-6471 E-Mail: jim@jimbelote.com 582 Lynnhaven Parkway, Suite 300 Virginia Beach, VA 23452 In This Issue... Last Week in Review: Home loan rates remain near 18-month lows, while housing reports showed mixed news for the sector. Forecast for the Week: Look for key reports on housing, consumer attitudes, U.S. economic growth, inflation and more. Plus, a big Fed meeting is ahead. View: Check out the secret to being more valuable at your job, revitalizing your career, or getting paid more. Last Week in Review It's been said that "opportunity comes knocking." And that's certainly the case for people looking to purchase or refinance a home, as home loan rates remain near 18-month lows. In recent weeks, investors have moved into the safe haven of the Bond markets for several reasons, including weak economic data here at home, concerns about Ebola, and economic and geopolitical uncertainty overseas. This has helped Mortgage Bonds reach 18-month highs, and since home loan rates are tied to Mortgage Bonds, rates have reached 18-month lows. In addition, Stocks have been volatile due to the upcoming end of the Fed's Bond-buying program. The Fed has been slowly tapering its purchases throughout the year, and every indication is that the Fed will completely end the program at its meeting on October 28 to 29. The key takeaway is that Stocks performed terribly after the first and second rounds of the Fed's Bond-buying program ended. If Stocks worsen, Mortgage Bonds and home loan rates could continue to improve. In other news, key housing reports showed mixed results for the sector. September Existing Home Sales reached its highest pace of the year, showing gains in all major regions except for the Midwest. September New Home Sales also reached a six-year high. However, New Home Sales for August, which were originally reported at 504,000, were revised to 466,000. Sales in June and July were also revised lower. 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 A packed economic calendar is in store this week. Plus, the Fed meeting could cause volatility in the markets. Housing news kicks off the week with Pending Home Sales on Monday, followed by the S&P/Case Shiller Home Price Indexon Tuesday. Durable Goods Orders will also be released on Tuesday. We'll get a read on how consumers are feeling with Consumer Confidence on Tuesday and the Consumer Sentiment Index on Friday. Thursday's reports feature Weekly Initial Jobless Claims and the first reading on Q3 Gross Domestic Product. Friday brings Personal Income, Personal Spending, Personal Consumption Expenditures (inflation index), theEmployment Cost Index, and Chicago PMI (a regional manufacturing report). In addition, the Fed's next two-day meeting of the Federal Open Market Committee begins Tuesday, with the Monetary Policy Statement being released on Wednesday. Investors will be watching closely to see if the Fed fully tapers its ongoing Bond-buying program. This announcement has the potential to create volatility in the markets. 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, helping home loan rates reach 18-month lows. I'll continue to monitor them closely. Chart: Fannie Mae 3.5% Mortgage Bond (Friday Oct 24, 2014) The Mortgage Market Guide View... 3 Steps to Becoming an Expert Peter Economy, management expert and co-author of the bestselling book, "Managing for Dummies," says the secret to being more valuable at your job, revitalizing your career, or getting paid more is simple—become an expert. He recommends the following three steps to get there: Step 1. Understand what you're interested in. What you already know can put you within short reach of being an expert in your field (if you aren't one already). This is the least time-intensive route. But if what you're already doing no longer interests you, you must find something inspiring enough to make learning feel effortless. Step 2. Focus on one thing at a time. Learn too many things at once and you'll be overwhelmed and probably fail. Don't move on to the next subject of your expertise until you feel comfortable with the one you're working on now. Step 3. Practice makes perfect. There's no such thing as an overnight expert. Be willing to invest the time for: Studying. Reading, taking courses, attending training or seminars, watching videos, hiring a mentor, and learning from other experts are all great avenues. Applying. Getting practical experience will help you go deeper, work out the kinks, and fully explore your field of expertise. Presenting. Documenting your findings with a journal or blog will help you understand even more facets of your expertise. If at all possible, write or speak about your trials and resolutions, teaching others about your journey. Please feel free to pass these tips along to your team, clients and colleagues. Source: Inc.com Economic Calendar for the Week of October 27 - October 31 Date ET Economic Report For Estimate Actual Prior Impact Mon. October 27 10:00 Pending Home Sales Sep NA -1.0% Moderate Tue. October 28 08:30 Durable Goods Orders Sep NA -18.4% Moderate Tue. October 28 09:00 S&P/Case-Shiller Home Price Index Aug NA 6.7% Moderate Tue. October 28 10:00 Consumer Confidence Oct NA 86.0 Moderate Wed. October 29 02:00 FOMC Meeting Oct NA 0.25% HIGH Thu. October 30 08:30 GDP Chain Deflator Q3 NA 2.1% Moderate Thu. October 30 08:30 Gross Domestic Product (GDP) Q3 NA 4.6% Moderate Thu. October 30 08:30 Jobless Claims (Initial) 10/25 NA 283K Moderate Fri. October 31 09:45 Chicago PMI Oct NA 60.5 HIGH Fri. October 31 10:00 Consumer Sentiment Index (UoM) Oct NA 86.4 Moderate Fri. October 31 08:30 Personal Income Sep NA 0.3% Moderate Fri. October 31 08:30 Personal Spending Sep NA 0.5% Moderate Fri. October 31 08:30 Personal Consumption Expenditures and Core PCE Sep NA 0.1% HIGH Fri. October 31