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

MMG Weekly....Rates are hot

Still Waiting?

The Fall has again become a very active time for buyers and sellers.  Since 2012, this has been a regular trend that bucks historical results.

Perhaps this flumox in the market trends has you wondering what to do.  Well, why you wonder about the next step, other home buyers are snapping up the great interest rates(VA Loans now 3.5%!).  As a result, home sellers are seeing market times shrink compared to even two months ago.

As Jim Belote notes in his Mortgage Market Guide,

the trend on interest rates could remain in the buyer's corner in the short term as the bond market has seen an influx of funds.

Yet, I wouldn't wait on interest rates getting better as chances are they will get worse every bit as much as they will bet better.  Thus, if you are needing a new place, you should call today!!

Call me at 757 580-6546 or read Jim's notes below, then call me at 757 580-6546.

VA 30 Year Fixed Rates are down to 3.5%!  Call me today if I can put my 22 years of mortgage banking experience to work for your next VA buyer. 

Direct Line:  395-LOAN(5626)

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Jim Belote Branch Manager, MBA Union Mortgage Group Phone: (757) 395-LOAN Fax: (757) 257-2909 License: 254207 jim@jimbelote.com

In This Issue...   Last Week in Review: Stocks have been getting clobbered while Bonds and home loan rates hover near their best levels of the year. Forecast for the Week: The markets are closed Monday for Columbus Day, but then key news on consumer spending, inflation, manufacturing and housing follow later in the week. View: Ensure your customers have a great experience with these seven steps. Last Week in Review   It's been said that history repeats itself. That seems to be the case as we approach the end of the Fed's big Bond-buying program. Read on to learn why. In recent weeks, Stocks have seen a sell-off while Mortgage Bonds have pushed considerably higher. Why has this happened? Concerns about slowing global economic growth have pushed investors into the safe haven of the Bond market, and investors have also secured profits with Stock prices near all-time highs. But there's another reason that's important to mention. After the first and second rounds of the Fed's Bond-buying program (known as Quantitative Easing) ended, Stocks performed terribly—and that behavior seems to be repeating itself as the Fed's latest version of its Bond-buying program is nearing its end later this month. But that's not all that could impact the markets in coming weeks. If corporate earnings are worse than expected, Stocks could continue to drift lower, meaning Bonds and home loan rates could continue to benefit. This will be a key story to monitor in the weeks ahead. In housing news, research firm CoreLogic reported that home prices rose by 6.45 percent from August 2013 to August 2014, which is down from the annual figure reported in July. CoreLogic went on to say that home prices are 12.1 percent below the peak seen in April 2006. Looking forward, prices are expected to increase 5.2 percent from August 2014 to August 2015. The takeaway from this is that home price gains have slowed to more normal and sustainable levels, after the large appreciation seen last 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   After Monday's market closure in celebration of Columbus Day, the second half of the week features a busy economic calendar. Wednesday brings a full slate of reports, including the Producer Price Index (which measures inflation at the wholesale level) and Retail Sales. Also on Wednesday, look for news from the manufacturing sector with the Empire State Index. The Philadelphia Fed Index will be released on Thursday. Weekly Initial Jobless Claims will be reported, as usual, on Thursday. Claims continue to hover near the 300,000 mark. Several key housing reports will be released at the end the week, including the National Association of Home Builders Housing Market Index on Thursday, followed byHousing Starts and Building Permits on Friday. And last but not least, the Consumer Sentiment Index will also be released on Friday. 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, Bonds have improved recently, helping home loan rates remain near their best levels in the last year. Chart: Fannie Mae 4.0% Mortgage Bond (Friday October 10, 2014) The Mortgage Market Guide View...   7 Steps to Creating a Great Customer Experience Providing a memorable customer experience doesn't require bells and whistles. The bottom line is people want to feel appreciated and valued. Paying attention to the basics below will yield big results. Make it easy. Map out your customers' experience and analyze it from their perspective. When do they first engage with you? When do they stop? What happens each step of the way? Identify ways to make it easier for them to do business with you. Smile and greet people. Whether in person or on the phone, smile and be welcoming. Your voice and demeanor will make customers feel valued. Offer options. It happens. When you're not able to meet a customer's need for a specific product or service, don't just say no. Offer options. These may be alternative products or services, or recommending a different organization. Offering options shows you're listening and you care. Embrace criticism. Good suggestions aren't always wrapped in the prettiest of packages. Move beyond your customers' approach and listen to the issues they are expressing. Identify opportunities to improve the customer experience. Preserve the relationship. Satisfied customers are a great source for repeat business and referrals. When you've concluded a transaction or consultation, say, "Please give me a call if I can be of further assistance." Ask for referrals, and make sure you provide contact information. Always say thank you. You learned this lesson as a toddler. Your customers will feel valued when you say thanks, be it for stopping in, offering feedback, or choosing you to meet their needs. Send a handwritten note. While emails and texting have made it easier to communicate quickly, nothing beats a handwritten note. These timeless treasures show you made the extra effort to reach out. As always, please feel free to pass these tips along to your team, colleagues and clients! Economic Calendar for the Week of October 13 – October 17 Date ET Economic Report For Estimate Actual Prior Impact Wed. October 15 02:00 Beige Book Oct NA NA Moderate Wed. October 15 08:30 Retail Sales Sep NA 0.6% HIGH Wed. October 15 08:30 Empire State Index Oct NA 27.5 Moderate Wed. October 15 08:30 Core Producer Price Index (PPI) Sep NA 0.1% Moderate Wed. October 15 08:30 Producer Price Index (PPI) Sep NA 0.0% Moderate Wed. October 15 08:30 Retail Sales ex-auto Sep NA 0.3% HIGH Thu. October 16 08:30 Jobless Claims (Initial) 10/11 NA 287K Moderate Thu. October 16 10:00 Housing Market Index Oct NA 59.0 Moderate Thu. October 16 10:00 Philadelphia Fed Index Oct NA 22.5 HIGH Fri. October 17 08:30 Housing Starts Sep NA 956K Moderate Fri. October 17 08:30 Building Permits Sep NA 998K Moderate Fri. October 17 10:00 Consumer Sentiment Index (UoM) Oct NA 84.6 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.