This Week’s Market Commentary

December 3, 2012

This week has five pieces of economic data set for release, including two that are considered to be highly important to the markets and mortgage rates. November’s manufacturing index from the Institute for Supply Management (ISM) is the first, coming at 10:00 AM ET Monday. This index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a small decline in sentiment from October to November. October’s reading was previously announced as 51.7. A weaker reading than the expected 51.2 would be good news for the bond market and mortgage rates. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. The lower the reading the better the news for bonds because waning sentiment indicates a slowing manufacturing sector and makes a broader economic recovery less likely.

The next piece of data that we need to be concerned with comes early Wednesday morning when revised 3rd Quarter Productivity numbers are posted. This index is expected to show an upward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn’t necessarily bad for the bond market. It’s the conditions around an expanding economy, such as inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 2.7%, up from the previous estimate of 1.9%. The higher the reading, the better the news for the bond market.

October’s Factory Orders will be posted late Wednesday morning. This report is similar to the Durable Goods Orders report that was released last week, except this one includes manufacturing orders for both durable and non-durable goods. This data usually isn’t a major influence on bond trading, but it does carry enough importance to impact mortgage rates if it shows a sizable variance from forecasts. Analysts are expecting to see a slight decline in new orders. The larger decline, the better the news for bond prices and mortgage rates because it would signal manufacturing sector weakness. If we do see a sizable drop in new orders, the bond market could thrive, improving mortgage rates Wednesday morning.
There is no other relevant economic news scheduled for release until Friday morning. There are a couple of potentially relevant foreign central bank announcements early Thursday morning that we will be watching. Announcements from the Bank of England and the European Central Bank, which are similar to our FOMC meetings, could influence the global markets including ours. The impact will probably be minimal, but we do need to keep an eye on those announcements early Thursday.

The biggest news of the week comes Friday morning when the Labor Department posts November’s Employment figures. This is arguably the most important monthly report we see. It is comprised of many statistics and readings, but the most watched ones are the unemployment rate, the number of news jobs added or lost during the month and average hourly earnings. Current forecasts call for a 0.1% increase in the unemployment rate to 8.0% while 90,000 new jobs were added to the economy. The income reading is forecasted to show an increase of 0.2%. An ideal scenario for mortgage shoppers would be a higher unemployment rate than 8.0%, a smaller increase in payrolls (or a decline) and no change in the earnings reading. If we are fortunate enough to hit the trifecta with all three, we should see the stock markets fall, bond prices rise and mortgage rates move lower Friday. However, stronger than expected readings would likely fuel a stock rally and bond sell-off that would lead to higher mortgage rates.

Also Friday is the release of December’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates slightly. Consumer sentiment or confidence is tracked because the more comfortable consumers are about their own financial situations, the more likely they are to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the economy, any related data is watched closely. Friday’s release is expected to show a reading of 82.4, which would be a small decline from last month’s final reading of 82.7. A larger decline in confidence would be considered good news for the bond market and mortgage rates.

Overall, look for Friday to be the key day of the week simply due to the fact we are getting the monthly Employment report that day. Monday’s ISM report is also considered highly important, but a level below the Employment report. Still it could be a market mover and set the tone for the markets until Friday’s data is posted. The middle part of the week is the lightest, which is a change from most weeks. I would pick Tuesday to be the least important day of the week, however, any day can bring movement in mortgage rates if the stock markets make a sizable move or something unexpected happens here or in the geopolitical arena. Therefore, I would recommend maintaining contact with your mortgage professional if still floating an interest rate and closing in the near future.

This Week’s Market Commentary

October 8, 2012

This week brings us the release of four economic reports that are of interest to the mortgage market along with two fairly important Treasury auctions. The week also gets heavy in quarterly earnings releases for companies, which could cause significant movement in the stock markets. The earnings results could affect bond trading as investors move funds into stocks if the reports are good. The other possibility is that earnings would generally disappoint, meaning investors may move funds out of stocks and into bonds as a safe-haven. The latter would be good news for the bond market and mortgage rates.

The bond market is closed Monday in observance of the Columbus Day holiday and will reopen Tuesday morning.  The stock markets are open for trading Monday, so their movement is worth watching as a sizable move up or down in the major indexes may influence bond trading and mortgage pricing early Tuesday morning. I suspect many mortgage lenders will be closed tomorrow, as will U.S. banks. If anyone is open for business and does post rates tomorrow, you can expect to see an increase of approximately .125 of a discount point from Friday’s morning pricing due to weakness in bonds late Friday afternoon.

The first report of the week comes at 2:00 PM ET Wednesday afternoon when the Federal Reserve posts its’ Beige Book. This report details economic conditions throughout the U.S. by Fed region and is relied upon heavily by the Federal Reserve when determining monetary policy at their FOMC meetings. If it reveals stronger signs of economic growth from the last release, we could see mortgage rates revise higher Wednesday afternoon.

Also Wednesday is the first of two important Treasury auctions this week. The sale of 10-year Notes will be held Wednesday while 30-year Bonds will be sold Thursday. We often see some weakness in bonds ahead of the sales as the firms participating prepare for them. However, as long as the auctions are met with decent demand from investors, the firms usually buy them back. This tends to help recover any presale losses. But, if the sales are met with a lackluster interest from investors- particularly international buyers, the bond market may move lower after the results are posted and mortgage rates may move higher. Those results will be announced at 1:00 PM each sale day.

August’s Trade Balance report will be released early Thursday morning. It gives us the size of the U.S. trade deficit but is the week’s least important report and likely will have little impact on the bond market and mortgage rates. Analysts are expecting to see a $43.8 billion deficit, but it will take a wide variance from forecasts to directly influence mortgage pricing.

The week closes with two reports being posted Friday morning, one of which is very important to the bond market and mortgage rates. That would be September’s Producer Price Index (PPI) early Friday morning. This is one of the two very important inflation readings we get each month. This index measures inflationary pressures at the producer level of the economy. Analysts are expecting to see a 0.8% increase in the overall index and a 0.2% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could raise concerns in the bond market about future inflation and lead to higher mortgage rates Friday. However, weaker than expected readings should result in bond market strength and lower mortgage pricing.

The last report of the week is October’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. Rising confidence means consumers feel better about their own financial and employment situations, meaning they are more apt to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related date is watched closely. Good news for the bond market would be a sizable decline in consumer confidence, but due to the importance of Friday’s other report, I suspect this data will have little impact on mortgage rates. It is expected to show a reading of 78.5, up slightly from September’s final of 78.3.

Overall, I am expecting to see a fair amount of movement in mortgage rates again this week, but the biggest changes will likely come the latter part of the week. The key economic report is Friday’s PPI but the Fed’s Beige Book also has the potential to influence the markets and mortgage rates if it shows any surprises. Therefore, we can label Wednesday or Friday as the most important day of the week. Also worth noting is the active week for corporate earnings that can cause a great deal of volatility in stocks and mortgage rates any day of the week. Accordingly, please proceed cautiously and maintain contact with your mortgage professional if you have not locked an interest rate yet.

This week’s market commentary

This week brings us the release of six relevant economic reports for the bond market to digest in addition to two potentially influential Treasury auctions. Most of the reports are considered to be of moderate to fairly high importance to the markets, so they do have the potential to affect mortgage rates. We also have to consider stock market swings as they also can have a direct impact on bond trading and mortgage pricing, as we have seen over the past few weeks. Generally speaking, stock market strength makes bonds less appealing to investors and leads to higher mortgage pricing. On the other hand, stock weakness often leads to safe-haven investing where investors move funds away from stocks and into bonds to escape the volatility. That translates into higher bond prices and lower mortgage rates.

The first release of the week is September’s Consumer Confidence Index (CCI) late Tuesday morning. This Conference Board index will be posted at 10:00 AM ET and gives us a measurement of consumer willingness to spend. It is expected to show an increase in confidence from last month’s reading, indicating that consumers were more optimistic about their own financial situations than last month, therefore, more likely to make a large purchase in the near future. This is bad news for the bond market and mortgage rates because consumer spending fuels economic growth. Analysts are calling for a reading of approximately 63.0, up from August’s 60.6 reading. The smaller the reading, the better the news for the bond market and mortgage rates.

August’s New Home Sales will be released late Wednesday morning. The Commerce Department is expected to say that sales of newly constructed homes rose last month, indicating housing sector strength. This report will likely not have a noticeable impact on mortgage rates unless its readings differ greatly from forecasts. This is the week’s least important report in terms of potential impact on mortgage rates, partly because it covers the small portion of all homes sales that last week’s Existing Home Sales report did not.

The Treasury will sell 5-year Notes Wednesday and 7-year Notes Thursday, which will tell us if there is an appetite for medium-term securities. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher, pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of the sales will be announced at 1:00 PM ET each day, so any reaction to the results will come during afternoon trading Wednesday and Thursday. Recent sales in these securities have not shown high levels of investor interest, so I do not have high expectations for this week’s auctions.

August’s Durable Goods Orders is the week’s most important data and will be posted early Thursday morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Big-ticket products are items that are expected to last three or more years. Analysts are expecting to see a sizable drop of 5.1% in new orders, indicating softening conditions in the manufacturing sector. That could help boost bond prices and cause mortgage rates to drop Thursday because signs of economic weakness make longer-term securities more appealing to investors. However, a sizable increase would indicate a stronger than expected manufacturing sector and would likely help push mortgage rates higher. It is worth noting that this data is known to be quite volatile from month-to-month, so a slight or moderate change may not affect mortgage pricing.

Also Thursday morning is the final revision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don’t see this revision having much of an impact on the financial markets or mortgage pricing. The GDP is important because it is the total sum of all goods and services produced within the U.S. and is considered the best measurement of economic activity. It is expected to show no change from the previous estimate of a 1.7% increase in the GDP. It will take a fairly large revision for this data to move mortgage rates Thursday.

Friday has two reports scheduled that may influence mortgage rates. The first is August’s Personal Income and Outlays early Friday morning. It gives us an indication of consumer ability to spend and current spending habits. This is relevant to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is negative news for the bond market and mortgage rates because it raises inflation and economic growth concerns, making long-term securities such as mortgage-related bonds less attractive to investors. It is expected to show an increase of 0.2% in income and a 0.5% increase in spending. If we see weaker than expected readings, the bond market should react positively, leading to lower rates Friday.

The second report is the University of Michigan’s revised Index of Consumer Sentiment for September. The preliminary reading that was released earlier this month showed a 79.2 reading. Analysts are expecting to see a small downward revision, meaning consumer confidence was slightly weaker than previously thought. As with Tuesday’s CCI release, a lower than expected reading would be good news for bonds and should help improve mortgage rates.

Overall, it is likely going to be a fairly active week in the markets and mortgage rates again. The most important day will likely be Tuesday or Thursday, but Friday’s data can also influence mortgage rates. The best candidate for the calmest day of the week appears to be Monday with no relevant data being released and an improvement in mortgage rates waiting for borrowers due to strength late Friday. I am still looking for stocks to move lower before they move much higher, which would push investor funds into bonds and drive mortgage rates lower. Therefore, I remain optimistic towards mortgage rates, both short and long-term, but still recommend maintaining fairly regular contact with your mortgage professional if still floating an interest rate.

This Week’s Market Commentary

September 10, 2012

This week brings us the release of six relevant economic reports that may influence mortgage rates in addition to two Treasury auctions and an afternoon of FOMC events. Several of the economic reports and the FOMC stuff are all considered to be highly important to the financial and mortgage markets, meaning that we may see significant changes to rates this week. There is a very good chance of seeing noticeable changes in rates several days. There is no relevant news scheduled to be posted Monday, so look for the stock markets to be the biggest force behind bond trading and changes to mortgage pricing until we get to the middle part of the week.

The week’s first event is July’s Goods and Services Trade Balance data early Tuesday morning, giving us the size of the U.S. trade deficit. It is expected to show a deficit of approximately $44.0 billion, which would be an increase from June’s $42.9 billion. However, I would consider this the least important of this week’s events, meaning it will likely have little impact on bond trading or mortgage rates unless it varies greatly from forecasts.

There are two Treasury auctions this week that have the potential to influence mortgage rates. The first is Wednesday’s 10-year Treasury Note auction, which will be followed by a 30-year Bond auction Thursday. It is fairly common to see some weakness in bonds before these sales as investors prepare for them. If the sales are met with a decent demand from investors, indicating that interest in longer-term securities such as mortgage-related bonds still exists, the earlier losses are usually recovered after the results are announced. The results of Wednesday’s sale will be posted at 1:00 PM ET while Thursday’s results are set for 11:30 AM ET due to other events scheduled that day. If demand was strong, particularly from international investors, we should see mortgage rates improve during afternoon trading Wednesday. However, due to the magnitude of Thursday’s Fed events, that day’s auction will likely have little impact on the bond market and mortgage rates.

One of the week’s two important inflation readings is the only economic report scheduled for release Thursday morning. The Labor Department will post August’s Producer Price Index (PPI) at 8:30 AM ET, giving us an important measurement of inflationary pressures at the producer level of the economy. There are two readings that analysts follow in this release. They are the overall index and the core data reading. The core data is the more important of the two since it excludes more volatile food and energy prices. Analysts are predicting a 1.2% increase in the overall index, and a rise of 0.2% in the core data. Stronger than expected readings could fuel inflation concerns in the bond market. That would be bad news for bonds and mortgage rates because inflation is the number one nemesis of the bond market as it erodes the value of a bond’s future fixed interest payments. As inflation becomes more of a concern in the markets, bonds become less appealing to investors, leading to falling prices and higher mortgage rates.

Thursday’s Fed events start with the 12:30 PM adjournment of the FOMC meeting that began Wednesday. It is widely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting, but there is a great deal of hope in the market that we are getting closer to another move by the Fed such as QE3. Friday’s Employment numbers helped bolster the calls for Fed action. I believe that an announcement of a bond buying program should rally not only stocks but also bonds and mortgage rates because those are the securities that the Fed will purchase in the QE program. On the other hand, the lack of at least a strong indication that QE3 is coming soon will probably lead to selling in the markets and an upward revision to mortgage rates.

Also worth noting is that the FOMC meeting is ending earlier than the traditional 2:15 PM because it is one of the meetings that will be followed by a press conference with Fed Chairman Bernanke. The meeting will adjourn at 12:30 PM while the press conference will begin at 2:15 PM and will probably lead to afternoon volatility in the markets and mortgage rates Thursday. The Fed will also update their economic and monetary policy projections right before the press conference begins. They are expected to be posted at 2:00 PM ET. Any significant revisions to the Fed’s outlook on unemployment, GDP growth or their timetable for keeping key rates at current levels will also cause volatility in the markets and mortgage rates.

Friday has the remaining four pieces of economic data with two of them considered to be major releases. Those highly important reports are August’s Retail Sales and Consumer Price Index (CPI) will both be posted at 8:30 AM. The sales report will give us a very important measurement of consumer spending, which is extremely relevant to the markets because it makes up over two-thirds of the U.S. economy. Current forecasts are calling for a 0.7% increase in sales. Analysts are also calling for a 0.8% rise in sales if more volatile auto transactions are excluded. Larger than expected increases would be considered bad news for bonds and likely lead to an increase in mortgage pricing since it would indicate economic growth.
The Consumer Price Index (CPI) is also one of the most important reports we see each month. It is considered to be a key indicator of inflation at the consumer level of the economy. As with its’ sister PPI report, there are two readings in the report- the overall index and the core data reading. Current forecasts show a 0.6% increase in the overall reading and a 0.2% rise in the core data reading. As with the PPI, a larger increase in the core data would signal rising inflation and would likely lead to higher mortgage rates Friday morning.

August’s Industrial Production data will be posted mid-morning Friday. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important but could help change mortgage rates if there is a significant difference between forecasts and the actual reading. Analysts are expecting to see a 0.2% decline from July’s level of output. A sizable increase could lead to slightly higher mortgage rates, while a weaker than expected figure would indicate a softer than thought manufacturing sector and would be considered good news for bonds and mortgage rates. However, the CPI and Retail Sales reports are the key data of the day and will likely influence mortgage pricing much more than the production report will.

The last release of the week will be posted by the University of Michigan late Friday morning. Their Index of Consumer Sentiment will give us an indication of consumer confidence, which hints at consumers’ willingness to spend. If consumer confidence in their own financial situation is rising is rising, they are more apt to make large purchases. But, if they are growing more concerned about their job security or finances, they probably will delay making that large purchase. This influences future consumer spending data and can impact the financial markets. It is expected to show a reading of 73.3, which would mean confidence slipped from August’s level of 74.3. That would be considered favorable news for bonds and mortgage rates because waning consumer spending indicates slower economic growth.

Overall, I think we need to label Thursday as the most important day of the week with the PPI and Fed events scheduled. However, Friday has some very important economic data set for release and also has the potential to heavily influence bond trading and mortgage rates. Monday will probably end up being the calmest day for mortgage rates, but we still may see minor changes if the stock markets show much movement. I strongly recommend maintaining contact with your mortgage professional if still floating an interest rate, especially the latter part of the week.

This Week’s Market Commentary

August 27, 2012

This week brings us the release of six economic reports that may affect mortgage rates along with two Treasury auctions and a Fed conference that has several key speakers. There is nothing of relevance scheduled for tomorrow, so look for the stock markets to drive bond trading and mortgage rates tomorrow. With data and related events scheduled every other day of the week, it is likely to be an active one for mortgage rates.

The Conference Board will post their Consumer Confidence Index (CCI) for August late Tuesday morning. This index measures consumer sentiment about their personal financial situations, giving us a measurement of consumer willingness to spend. If consumers are feeling more confident in their own finances, they are more apt to make a large purchase in the near future, fueling economic growth. A decline in confidence would indicate that surveyed consumers probably will not be buying something big in the immediate future. That would be a sign of economic weakness and should drive bond prices higher, leading to lower mortgage rates Tuesday. It is expected to show a reading of 65.5, which would be a slight decline from July’s 65.9. The lower the reading, the better the news for bonds and mortgage rates.

Wednesday has two reports scheduled that can potentially influence mortgage pricing. The first is the first revision to the 2nd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. The GDP is the total of all goods and services produced in the U.S. and is considered to be the best measurement of economic activity. This reading is the second of three that we see each quarter. Last month’s preliminary reading revealed that the economy grew at an annual rate of 1.5%. Wednesday’s revision is expected to show that the GDP actually rose only 1.6%. A smaller than expected reading should help lower mortgage rates Wednesday, especially if the inflation portion of the release does not get revised higher. There will be a final revision issued next month, but it probably will have little impact on mortgage rates since traders will be more interested in the current quarter’s activity.

The Federal Reserve will release its Beige Book report at 2:00 PM ET Wednesday. This report details current economic conditions in the U.S. by Federal Reserve regions. It is believed to be a key source of data when the Fed meets for their FOMC meetings and is usually released approximately two weeks prior to each meeting. If it reveals any significant surprises or changes from the past, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed’s next move. Most likely though, it will be a non-event and will not lead to a noticeable change in mortgage rates.

July’s Personal Income and Outlays report will be released early Thursday morning, giving us a measurement of consumer ability to spend and current spending habits. It is expected to show an increase of 0.3% in income and a 0.5% increase in spending. Since consumer spending makes up over two-thirds of the U.S. economy, weaker than expected numbers would be considered good news for the bond market and mortgage rates.

Friday is a multi-release day with August’s revision to the University of Michigan’s Index of Consumer Sentiment and last month’s Factory Orders data both being posted late Friday morning. The sentiment index helps us track consumer willingness to spend similarly to Tuesday’s CCI. It is expected to show no change from August’s preliminary reading of 73.6. If it revises lower, consumers were less confident about their personal financial situations than previously thought. This would be good news for the bond market and mortgage rates because waning confidence usually means that consumers are less likely to make large purchases in the near future. As with the CCI index, the lower the reading the better the news for bonds and mortgage rates.

July’s Factory Orders data measures manufacturing sector strength and is similar to last week’s Durable Goods Orders, but includes orders for both durable and non-durable goods. It is expected to show a 2.0% increase in new orders. A smaller than expected rise would be favorable for bonds, but I don’t see this data causing much movement in rates unless its results vary greatly from forecasts since the big-ticket products portion of the report was released last week.

Also worth mentioning are a couple of Treasury auctions that may affect bond trading and mortgage rates this week along with a speaking engagement by Fed Chairman Bernanke. The two relevant Treasure auctions are Wednesday’s 5-year Note and Thursday’s 7-year Note sales. Results of the auctions will be posted at 1:00 PM ET each day. If investor interest is strong in the auctions, we can expect the broader bond market to rally and mortgage rates to move lower. However, lackluster demand could lead to bond selling and higher mortgage rates Wednesday and Thursday afternoons.

Mr. Bernanke will be speaking Friday morning at the Jackson Hole Fed conference in Wyoming. He will be addressing current and future economic conditions, so his words are likely to influence the markets and mortgage pricing Friday. Also scheduled to speak are the European Central Bank and International Monetary Fund Presidents. What they will say and how it will impact the markets is difficult to predict, but there is a high probability of the markets reacting heavily to their words, so the event needs to be watched.
Overall, I believe it is going to be a fairly active week for the financial and mortgage markets. The calmest day will likely be tomorrow, but choosing the best candidate for the most important day isn’t as easy. Wednesday has two economic reports scheduled along with the 5-year Note auction, but Friday’s Jackson Hole conference can be a market mover by itself without the two economic reports that are scheduled that day. So, let’s go with Wednesday AND Friday as the key days of the week. Since it looks to be another active week, I strongly recommend maintaining contact with your mortgage professional if still floating an interest rate.

New Neighborhoods Spring Up in Old Locations

August 23, 2012

The housing industry is rethinking the types of homes they want to build and where to build them.
In cities, old industrial buildings and deserted warehouses are being torn down to make way for new housing.

Young Millennials and older Baby Boomers are rejecting traditional suburban homes in favor of urban living. These two generations make up almost half of the American population.

Many plan to live near city centers so they can walk to work, shops and restaurants or take public transportation. They prefer smaller homes because they’re single or have no kids. They don’t want to spend much free time maintaining their homes, and they don’t want to spend a lot on gasoline.

Many 30-something professionals also plan to live in city neighborhoods rather than in the suburbs. And they don’t plan to live in multi-story condos, according to Smart Growth America’s LOCUS, a coalition of real estate developers and investors who are in favor of urban projects.

This is a dramatic shift in the types of homes people want, and it’s probably not temporary, experts say.

This Week’s Market Commentary

This Week’s Market Commentary

August 6, 2012

This week is extremely light in terms of the number of economic reports that are scheduled for release that may influence mortgage rates. In fact, there are only two monthly or quarterly reports and neither is considered to be highly important to the markets. There are several Treasury auctions scheduled during the week, but only two of them are worth watching. This makes it likely that stock movement will heavily influence bond trading and mortgage rates several days.

There are two public speaking engagements by Fed Chairman Bernanke, neither of which is likely to cause volatility in the markets or mortgage pricing. The first is Monday morning when he will appear via prerecorded video at a conference in Boston. He is also hosting a town hall meeting on education Tuesday afternoon in Washington D.C. and will answer questions from people in attendance and via video feed. Both of these are considered to be of very low importance and have little chance to causing any havoc in the markets.

The first economic data of the week is Employee Productivity and Costs data for the second quarter that will be released early Wednesday morning. It will give us an indication of employee output per hour. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don’t see this being a big mover of mortgage pricing, but since it is the only data of the day in a week with little else scheduled, it may influence rates slightly during morning trading. Analysts are currently expecting to see an increase in productivity of 1.5% and a 0.4% rise in labor costs. A stronger than expected productivity reading and a smaller than expected increase in costs could help improve bonds, leading to lower mortgage rates Wednesday.

June’s Trade Balance report will be released early Thursday morning. It gives us the size of the U.S. trade deficit but is the week’s least important report and likely will have little impact on the bond market and mortgage rates. Analysts are expecting to see a $47.5 billion deficit, but it will take a wide variance to directly influence mortgage pricing.

Also worth noting are two important Treasury auctions this week. The sale of 10-year Notes will be held Wednesday while 30-year Bonds will be sold Thursday. We often see some weakness in bonds ahead of the sales as the firms participating prepare for them. However, as long as they are met with decent demand from investors, the firms usually buy them back. This tends to help recover any presale losses. But, if the sales are met with a lackluster interest from investors- particularly international buyers, the bond market may move lower after the results are posted and mortgage rates may move higher. Those results will be announced at 1:00 PM each sale day.

Overall, it is difficult to label one particular day as the most important with so little to choose from. Monday may be a little interesting considering the size of Friday’s stock rally that pushed the Dow higher by 217 points, which drove bond prices lower. We would not be surprised to see the negative tone extend into tomorrow’s bond trading and mortgage rates, especially if stocks open higher. We never recommend straying far from your mortgage professional if still floating an interest rate, however, the markets and mortgage pricing are likely going to be much calmer than recent weeks.

This Week’s Market Commentary

July 2, 2012

This week brings us the release of only three pieces of relevant economic data that may influence mortgage rates, but two of them are considered to be highly important. In addition, the Independence Day holiday falls in the middle of the week this year, so we have an early and full-day closure to work around.

Unlike many Mondays, tomorrow does bring us some very important economic data. This would be the Institute of Supply Management’s (ISM) manufacturing index for June late tomorrow morning. This index measures manufacturer sentiment by surveying trade executives on current business conditions. A reading above 50 means that more surveyed executives felt business improved during the month than those who felt it had worsened. Analysts are expecting a reading of 52.2. That would indicate that more manufacturers felt business worsened from the previous month, when we saw a 53.5 reading. Good news for bonds and mortgage rates would be a weaker than expected reading, particularly something below the recessionary threshold of 50.0.

The Commerce Department will post May’s Factory Orders data late Tuesday morning, which is similar to the Durable Goods Orders report that was released last week. The biggest difference is that this week’s report covers both durable and non-durable goods. It usually doesn’t have as much of an impact on the bond market as the durable goods data does, but can lead to changes in mortgage pricing if it varies greatly from forecasts because it measures manufacturing sector strength. Current expectations are showing a 0.4% increase in new orders from April’s levels. A decline in orders would be considered good news for the bond market and could help lower mortgage rates slightly Tuesday.

The U.S. financial and mortgage markets will be closed Wednesday in observance of the Independence Day holiday. They will also close early Tuesday afternoon ahead of the holiday and will reopen Thursday morning for regular trading hours. Considering recent events from Europe, who will treat Wednesday as any other day of business, we could see bond traders sell holdings before the 2:00 PM ET close Tuesday to protect themselves over the holiday. That raises the possibility of seeing an upward revision to mortgage rates Tuesday afternoon.

The last data of the week is arguably the single most important report we see each month. The Labor Department will post June’s unemployment rate, number of new payrolls added or lost and average hourly earnings early Friday morning. These are considered to be very important readings of the employment sector and can have a huge impact on the financial markets. The ideal scenario for the bond market is rising unemployment, a large decline in payrolls and no change in earnings. Weaker than expected readings would likely help boost bond prices and lower mortgage rates Friday. However, stronger than expected readings could be extremely detrimental to mortgage pricing. Analysts are expecting to see the unemployment rate remain at 8.2%, with 100,000 jobs added and a 0.2% rise in earnings.

Overall, I am expecting to see a fairly active week for the financial markets and mortgage rates. We have a small increase in rates waiting for us tomorrow morning due to weakness in bonds late Friday. The most important day of the week is Friday, but tomorrow could also be a key day in determining whether rates move higher or lower on the week. Furthermore, the stock markets will also heavily affect bond trading if they rally or go into a sell-off any day of the week. Therefore, I recommend maintaining contact with your mortgage professional if still floating an interest rate.

This Week’s Market Commentary

June 25, 2012

This week brings us the release of six pieces of economic data in addition to a couple of Treasury auctions that have the potential to influence mortgage rates. None of the reports are considered to be highly important or labeled as market-movers, but they do carry enough significance to affect mortgage pricing if they show surprises in their results.

May’s New Home Sales report kicks off this week’s data late tomorrow morning. It is similar to last week’s Existing Home Sales report, but tells us how well sales of newly constructed homes were last month. It is expected to show an increase in sales, but will likely not have much of an impact on mortgage rates because this data tracks the small portion of home sales that last week’s report did not. I believe it will take a large rise in sales or a sizable decline for this data to influence mortgage rates.

June’s Consumer Confidence Index (CCI) is the second report of the week. It will be posted late Tuesday morning and is important to the financial markets because it measures consumer willingness to spend. If consumers are more confident about their own financial situations, they are more apt to make large purchases in the near future. If it shows a sizable increase in confidence from last month, we can expect to see the bond market falter and mortgage rates rise slightly. Current forecasts are calling for a reading of 64.0, down from last month’s 64.9 reading. The lower the reading, the better the news for bonds and mortgage rates.

May’s Durable Goods Orders will be posted early Wednesday morning, giving us an indication of manufacturing sector strength. It tracks orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. This data is known to be quite volatile from month to month and is expected to show an increase of 0.5% in new orders from April to May. A large decline would be the ideal scenario for the bond market and would likely lead to a decline in mortgage pricing because it would indicate manufacturing sector weakness.

Thursday’s only monthly or quarterly economic data is the final reading to the 1st Quarter Gross Domestic Product (GDP). The GDP is the sum of all products and services produced in the U.S. and is considered to be the best measurement of economic growth or contraction. However, this particular data is quite aged now (covers January through March) and will likely have little impact on the bond market or mortgage pricing unless it varies greatly from previous readings. Market participants are looking more towards next month’s release of this quarter’s initial GDP reading. Last month’s first revision showed a 1.9% rise in the GDP, which is what analysts are expecting to see again.
Friday has two reports scheduled, the first being May’s Personal Income and Outlays data at 8:30 AM ET. This report gives us an indication of consumer ability to spend and current spending activity. They are important because consumer spending makes up over two-thirds of the U.S. economy. If consumer income is rising, they have more money to spend each month. Analysts are expecting to see an increase of 0.1% in income and a 0.1% rise in the spending portion of the report. Declines in both of these readings would be good news for the bond market and mortgage rates.
The University of Michigan will close out this week’s data when they update their Index of Consumer Sentiment for May late Friday morning. This index gives us a measurement of consumer willingness to spend. As with Tuesday’s CCI, if consumers are more comfortable with their own financial situations, they are more apt to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data has the potential to affect bond trading and mortgage rates. A downward revision would be considered good news for bonds and rates, but forecasts are calling for no change from this month’s preliminary reading of 74.1.
Also worth noting is the fact that the Fed will be selling more debt this week. These sales may influence broader bond trading enough to affect mortgage rates if they show strong or weak investor demand. There are sales every day except Friday but the two most likely to affect rates are Wednesday’s 5-year Note sale and Thursday’s 7-year Note auction. If they are met with a strong demand, we could see bond prices rise during afternoon trading. This could lead to afternoon improvements to mortgage rates also. But, if the sales draw a lackluster interest from investors, mortgage rates may move higher during afternoon trading those days.
Overall, Tuesday, Wednesday and Friday’s data should bring some volatility in trading and mortgage rates. It is difficult to label one particular day as the most important as none of them stand out as critical. In fact, any day that has a sizable move in stocks could help determine which day was the most active for mortgage rates.

San Mateo Office Teams Up With Second Harvest for Food Drive

June 14, 2012

Mortgage California is partnering with Second Harvest Food Bank to feed 100,000 children each month this summer. In the San Mateo office, food will be collected through July 2 to be donated to hungry children in the community.

Please avoid bringing items packaged in glass. Some nutritious, non-perishable foods that would be great donations:

- Fruit cups (packed in juice)
- High fiber cereal bars (without peanuts)
- Pop-Top tuna
- Pretzels
- Cheese and crackers
- Graham crackers
- Low-sugar cereal
- 100% Fruit juice boxes

Donations can be dropped off at our corporate headquarters and at the Mortgage California San Mateo office:

16780 Lark Avenue
Los Gatos, California 95032
or
1875 S. Grant Street Suite 700
San Mateo, California 94402

This Week’s Market Commentary

This week brings us the release of four important economic reports in addition to two Treasury auctions that may influence rates. Only one of the reports is considered to be of fairly high importance to the bond market and mortgage pricing.

The remaining reports are considered to be of moderate or low importance and will likely not heavily influence mortgage rates. There is nothing of importance scheduled for release tomorrow, so expect the stock markets to influence bond trading and mortgage pricing.

The National Association of Realtors will give us their Existing Home Sales report late Tuesday morning. This data tracks resales of homes in the U.S. during April, giving us a measurement of housing sector strength. This type of data is relevant because a weakening housing sector makes a broader economic recovery less likely. Current forecasts are calling for an increase in home sales between March and April. Ideally, the bond market would prefer to see a decline, indicating further housing sector weakness. A large increase in sales could lead to bond weakness and a small increase in mortgage rates Tuesday morning.
April’s New Home Sales report is the sister report of the Existing Home Sales and will be released late Wednesday morning. It gives us a similar measurement of housing sector strength and future mortgage credit demand, but tracks a much smaller portion of housing sales than Tuesday’s report does. Actually, it is the least important release of the week and probably will not have much of an impact on mortgage pricing. It is expected to show gains in sales from March’s level, meaning the new home portion of the housing sector also strengthened last month.

Thursday has the week’s most important report with April’s Durable Goods Orders being posted. This data gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. These are items made with an expected life span of three or more years. It is currently expected to show an increase in new orders of approximately 0.3%, indicating the manufacturing sector remained fairly flat last month. That would be relatively good news for the bond market and mortgage rates, but this data is known to be quite volatile. Therefore, a small variance from forecasts would likely have little impact on Thursday’s mortgage rates.

The last relevant data of the week will come from the University of Michigan, who will update their Index of Consumer Sentiment for May late Friday morning. This type of data is watched closely because when consumers are feeling more confident about their own financial situations, they are more likely to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, rising confidence and the higher levels of spending that usually follow, are considered negative news for bonds and mortgage rates. Friday’s report is expected to show a small decline from this month’s preliminary reading of 77.8. A reading above 77.5 would be considered negative for bonds and mortgage pricing.
Overall, I think we have a moderately busy week ahead of us. The big report of the week is the Durable Goods Orders, making Thursday the best candidate for most active day for mortgage rates. Tuesday’s housing report may also cause movement in rates if it shows a sizable variance from forecasts. There are also a couple of Treasury auctions that are worth noting. The 5-year Note sale is Wednesday and the 7-year Note auction will be held Thursday. Both may also influence bond trading and possibly mortgage rates if they are met with an exceptional demand or if there is lackluster interest from investors.

Also worth noting is the fact that the bond market will close early Friday afternoon ahead of next Monday’s Memorial Day holiday. With all this, there is a pretty good possibility of seeing mortgage rates change several times this week- especially if there is more volatility in the stock markets. Accordingly, please proceed extremely cautiously if still floating an interest rate.

This Week’s Market Commentary

May 14, 2012

This week brings us the release of five pieces of relevant economic news in addition to the minutes from the most recent FOMC meeting. Two of the economic reports are considered to be highly important to the markets and mortgage rates, while the others carry enough significance to influence mortgage rates if they show a wide variance from forecasts.

The first important piece of data this week is April’s Retail Sales, which will be released at 8:30 AM ET Tuesday. It is an extremely important report for the financial markets since it measures consumer spending. Consumer spending makes up over two-thirds of the U.S. economy, so this data can have a pretty significant impact on the markets. Current forecasts are calling for a 0.2% increase in sales from March to April.

A weaker than expected level of sales should push bond prices higher and mortgage rates lower Tuesday morning as it would signal that economic activity may not be as strong as thought. However, a larger increase could fuel fears of economic growth that would lead to stock buying and bond selling that would push mortgage rates higher.

April’s Consumer Price Index (CPI) will also be posted at 8:30 AM ET Tuesday. It is similar to last week’s PPI report, but measures inflationary pressures at the more important consumer level of the economy. These results will be watched closely and could lead to significant volatility in the bond market and mortgage pricing if they show any surprises. Current forecasts are calling for no change in the overall index and a 0.2% rise in the core data reading. The core data is the more important of the two readings because it excludes more volatile food and energy prices, giving analysts a more stable and reliable measurement of inflation.
Wednesday has three reports scheduled, starting with April’s Housing Starts at 8:30 AM ET. This data measures housing sector strength and mortgage credit demand by tracking newly issued permits and actual starts of new home construction. It is expected to show an increase in new starts from March’s readings. Since this report is not considered to be of high importance to the bond market, it likely will have little impact on mortgage rates unless it varies greatly from forecasts.

The second report of the day is April’s Industrial Production at 9:15 AM ET. It measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.5% increase in production, indicating that manufacturing activity is growing. A smaller than expected increase in output would be good news for the bond market and mortgage rates because it would indicate that the manufacturing sector is not as strong as thought. This report is just a bit more important to the markets as the earlier housing report, so they both will likely need to show unexpected strength or weakness for them to cause movement in mortgage rates.

Wednesday’s third release is the minutes of the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy and economic growth. The goal is to form opinions about the Fed being able to wait until late 2014 to make a move to either boost economic activity or slow growth to ease inflation concerns. Since the minutes will be released at 2:00 PM ET, if there is a market reaction to them it will be evident during afternoon trading Wednesday.

The last data of the week comes late Thursday morning with the release of April’s Leading Economic Indicators (LEI). This Conference Board report attempts to measure economic activity over the next three to six months. It is expected to show a 0.2% increase from March’s reading, meaning that economic activity is likely to strengthen slightly over the next few months. A decline would be good news for the bond market and mortgage rates, while an increase could cause mortgage rates to inch higher Thursday.

Overall, it looks like we may see the most activity Tuesday with the two most important reports of the week scheduled. Wednesday could also be active while Friday is the best candidate for calmest day unless something unexpected happens. However, sizable gains or losses in the major stock indexes could influence bonds and mortgage rates more than a good part of this week’s economic data can. Therefore, please maintain contact with your mortgage professional if still floating an interest rate.

Public Records Errors and Real Estate Transactions

May 8, 2012

A recent Inman News article explains how mistakes in public records can hurt sellers without due diligence. While paperwork isn’t the most glamorous part of selling a home, the article is clear about the dangers of not knowing the legal usable square footage of your home as defined by the public record.

Buyers want to know the actual square footage, not just what is reported by the seller. If the numbers don’t match up, it could cause a problem.

For example, the article hypothesizes that “if the sellers say their house has 3,000 square feet of living space, but the public record reports only 2,300 square feet, the buyers expect an explanation for the discrepancy.”
Many appraisers are now only taking legal public record square footage into account when making their evaluations of a home’s worth.

It would be wise to check that the record on your home is correct, and make adjustments to it if not to prevent any transactions from falling apart over this detail. As the article points out, it can take months for changes to show up in the public record, so it is best to start fixing any mistakes early on.

Read the Inman News article here. Do you know what the public record says about your home?

This Week’s Market Commentary

May 7, 2012

There are only three pieces of relevant economic data scheduled for release this week that may affect mortgage rates, in addition to two important Treasury auctions. The two most important reports will be posted Friday, meaning the markets will have to rely on factors other than economic news for direction most of the week.

There is no relevant economic data due until Thursday, so expect the stock markets to be a big influence on bond trading and mortgage rates until then.

The Treasury will hold a 10-year Note sale Wednesday and a 30-year Bond sale Thursday. Results of the auctions will be posted at 1:00 PM ET each day. If they are met with a strong demand from investors, we could see bond prices rise enough during afternoon trading to cause downward revisions to mortgage rates. However, lackluster bidding in the sale, meaning longer-term securities are losing their appeal, could lead to higher mortgage pricing those afternoons.

March’s Goods and Services Trade Balance report will be released early Thursday morning. This report gives us the size of the U.S. trade deficit but likely will not have much of an impact on the bond market or mortgage pricing. It is expected to show a $49.9 billion trade deficit, but it is the least important of this week’s data and likely will have little influence on Thursday’s mortgage rates.

Friday has the remaining two reports. April’s Producer Price Index (PPI) is the first at 8:30 AM ET. It helps us measure inflationary pressures at the producer level of the economy. If this report reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond market rally. The overall index is expected to show no change, while the core data that excludes more volatile food and energy prices has been forecasted to rise 0.2%. A decline in the core data would be ideal for mortgage shoppers because inflation is the number one nemesis for long-term securities such as mortgage-related bonds.

The last report of the week is May’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend, which relates to consumer spending. If consumers are more confident of their own financial situations, they are more apt to make large purchases in the near future. This report usually has a moderate impact on the financial markets though, because it is not exactly factual data. It is expected to show a reading of 76.2, which would be a small decline from last month’s final reading. If it shows a large decline in consumer confidence, bond prices could rise and mortgage rates would move slightly lower because waning confidence means consumers are less apt to make a large purchase in the near future. That is assuming the PPI does not give us a significant surprise though. The PPI is much more important to the bond market than the sentiment index is, so look for it to be the biggest influence on Friday’s mortgage pricing.

Overall, it likely will be a moderately active week for mortgage rates. Besides the week’s economic news, look for the stock markets to be a major influence on trading. The most important day of the week is Friday with the PPI report on the agenda, but Wednesday’s 10-year Note auction could also heavily sway bond trading. It appears we will likely see the most movement in mortgage rates the latter part of the week unless the stock markets post sizable gains or losses the first part.

Ways to Reduce Stress When You’re Moving

April 24, 2012

Buying and selling a home and moving is one of the most stressful processes on the human psyche. It is important that while going through the real estate process, you find time to take care of yourself.

Just like on an airplane, you have to put an oxygen mask on yourself before helping anyone else. This means that in order to be able to take care of things and other people, it is important that you make sure you take care of yourself first.

Savor time taking care of yourself to reduce the stress of moving.

Try setting aside relaxation time just for yourself each day, and do something you enjoy, despite the hectic and stressful nature of moving.

Reading a good book, spending time outside, taking a long bath, getting a massage – things like this will help you reduce your stress level immensely. With less real estate stress, handling the details will be easier.

This Week’s Market Commentary

February 6, 2012

There are only two pieces of monthly economic data scheduled for release this week. Neither of them is considered to be highly important, so we don’t have much to pin our hopes on or to be concerned with this week.

There are two Treasury auctions on the calendar that may influence mortgage rates the middle part of the week and the second part of Fed Chairman Bernanke’s testimony to Congress, but no important economic data.

Nothing of concern is due tomorrow, so look for the stock markets and news from Europe- particularly Greece, to drive the markets tomorrow. Fed Chairman Bernanke will speak to the Senate Budget Committee at 10:00 AM Tuesday. I don’t expect him to say anything different than he said last week to the House Budget Committee, but the Q&A portion of his appearance could lead to something new. It is worth watching, but it will probably not lead to a noticeable change in the markets or mortgage rates.

The two important Treasury auctions come Wednesday and Thursday when 10-year Notes and 30-year Bonds are sold. The 10-year sale is the more important one as it will give us a better indication of demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would likely result in upward afternoon revisions to mortgage rates.

With little monthly and no quarterly economic reports being posted, Thursday’s weekly release of unemployment figures may end up moving the markets and mortgage rates more than it traditionally does. The Labor Department is expected to announce that 370,000 new claims for unemployment benefits were filed last week, rising slightly from the previous week’s total. The higher the number of new claims for benefits, the better the news for the bond market and mortgage pricing as it would indicate weakness in the employment sector.

The first monthly report comes early Friday morning when December’s Goods and Services Trade Balance data will be posted. This report measures the U.S. trade deficit and can affect the value of the U.S. dollar versus other currencies, but it usually does not cause enough movement in bond prices to affect mortgage rates. It is expected to show a $48.2 billion trade deficit.

February’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment will be released late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows an increase in consumer confidence, the stock markets may move higher and bond prices could fall. It is currently expected to come in at 74.0, down from January’s final reading of 75.0. That would indicate consumers were less optimistic about their own financial situations than last month and are less likely to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, this would be considered good news for bonds and mortgage pricing.

Overall, despite being a fairly light week in terms of economic releases and relate events, it is still relatively crucial for the mortgage market. We saw the yield on the benchmark 10-year Treasury Note spike higher Friday as a result of the stronger than expected employment data. Stocks rallied as a result of that data, extending the 2012 stock rally that has pushed the Dow up over 5% and the Nasdaq up 11% year-to-date. Both indexes are at their highest levels since May 2008 and December 2000 respectively. This has me believing we are due to see a pullback in stocks fairly soon. If/when this happens, we should see funds shift back into bonds for safety, leading to lower mortgage rates. Keep in mind that this is more or less just speculation, but I am expecting to move to a less conservative approach regarding short-term mortgage rates in the near future.

Common First Time Homebuyer Mistakes

February 1, 2012

Many first-time homebuyers make simple and common mistakes that are easily avoidable.
They face multiple challenges anyway, such as finding the right home, the right agent, getting approved for a mortgage, and staying within their budget. By avoiding these common mistakes, the process of buying a home can be much less stressful.

1. Overlooking extra costs of homeownership
While some see themselves as ready for homeownership once they can afford a mortgage payment, it is important to remember the other fees that come along with owning a home. Property taxes, home owners association fees, maintenance, higher water and electrical bills, and property insurance are among the extra costs of owning a home, and should be calculated into your budget.

2. Not getting preapproved
It is very important to get preapproved for a loan before you go out searching for the perfect place. That way, you will be making financially sound decisions versus unrealistic emotional ones as to what you can afford.

3. Spending your entire savings on your down payment
This is one of the most common mistakes first time homebuyers make. Homebuyers who put 20 percent or more down don’t have to pay for mortgage insurance when getting a conventional mortgage, which often translates into substantial savings on the monthly payment. However, it is smarter to keep your rainy day savings intact instead.

Top Five Tips to Increase Your Home's Appraisal Value

The importance of the appraisal in a real estate transaction can’t be overestimated. An appraisal can completely kill a deal if it does not turn out well.

The Wall Street Journal recently posted an article with tips on upping your homes value during an appraisal, and here are some of our top picks:

1. Spruce up the house
While a couple of dishes in the sink won’t make a difference, there are quick fixes that do. Overgrown landscaping should be trimmed, and things like marks on walls and stained carpets should be cleaned. These affect the home’s overall value in appraisal, according to the WSJ.

2. Curb appeal matters
Take the time to mow the lawn, trim the hedges, and pull out any weeds. A nice-looking yard is not only a great first impression, but it can offset any nearby foreclosed properties.

3. Note the neighborhood improvements
Location, location, location! Make note of any changes to the neighborhood that are positive, such as a new playground or a Whole Foods nearby.

4. Keep the $500 rule in mind
According to the WSJ, appraisers often value a home in $500 increments. This means that if there is a repair over $500 that can or ought to be made, do it, or it could count against the property’s value.

5. Maintain a list of all updates to home
All updates, major and minor, to the home should be listed. “Itemize each update with the approximate date and approximate cost,” recommends Matthew George, the chief appraiser of Eagle Appraisals Inc. Remember to include things the appraiser might not notice, such as insulation and roof updates.

Credit Bureaus Selling Your Info: How to Opt Out

Written in our customer agreements with borrowers is a promise that our company would never release personal or financial information. Unfortunately, credit bureaus do not abide by these same rules.

The credit bureaus are the culprits on trigger leads which can cause solicitation for anyone borrowing for a home loan because they sell the leads to companies.  It’s not the vendors (LandSafe, IR, etc). 

Unfortunately, we are at the mercy of the bureaus on this deal. However, there are simple steps you can take to opt out of your information being sold by credit bureaus.

How to opt out of trigger leads
There are two ways to opt-out of trigger lead programs and ensure your information is not sold.

1. Complete and submit an online form at www.optoutprescreen.com. This method stops trigger leads for five years.

2. Complete a separate form at the same Web site (www.optoutprescreen.com) and then print, sign and mail a letter generated by that form to confirm your opt-out request. This method stops trigger leads permanently.

Both of the opt-out methods take five days to become effective, so if you don’t want your information to be sold, you need to opt-out at least five days before you make a specific inquiry.

If your information is already in the trigger lead pool, you may continue to receive telephone calls and mailings for some time after you elect to opt out.

Opting out via one of these methods is highly recommended for your privacy.

Is San Francisco Becoming a Seller’s Market?

January 24, 2012

Since the summer season wound down in September, the number of homes on the market in San Francisco has declined to the point that sellers face far less competition.

According to an article in the San Francisco Chronicle, the amount of homes for sale has hit a 12 month low.
Redfin’s analytical data has “found that given the relatively sparse number of homes on the market, it’s becoming more of a – surprise! – seller’s market out there,” reported the Chronicle.

In a balanced housing market, there is typically 5-6 months “supply,” or homes for sale. In December San Francisco hit a low of a 1.6 month supply.

Are you surprised by this change in the housing market in the city by the bay?

TeenForce Workers at Mortgage California Named Top Two in Program

January 13, 2012

At our company headquarters we employ several teenagers through TeenForce, a non-profit organization that helps teenagers gain work experience. Two of our teens have just been named the #1 and #2 workers in TeenForce!
Alyssa Schweickert, the #1 TeenForce worker in 2011, logged 670 hours. Melissa Dalla, the #2 TeenForce worker, logged 652 hours.
We are extremely proud of them and all of the hard work they have done, as well as all of our TeenForce employees. Congratulations, Alyssa and Melissa!

This Week’s Market Commentary

This week bring us the release of only three monthly reports that are relevant to the bond market and mortgage rates, but two of them are considered to be highly important.

In addition to those three reports, we also will get the minutes from the last FOMC meeting that may influence the markets and possibly mortgage rates. The financial markets are closed today due to the New Year’s Day holiday.

The first report is the Institute for Supply Management’s (ISM) manufacturing index for December late tomorrow morning. This highly important index measures manufacturer sentiment. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened.

That indicates manufacturing sector strength rather than contraction. Analysts are currently expecting to see a 53.4 reading in this month’s release, meaning that sentiment strengthened from November’s 52.7. A smaller reading will be good news for the bond market and mortgage shoppers, while a higher than expected reading could lead to higher mortgage rates tomorrow morning as it would point towards economic strength.

Also tomorrow is the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed’s thinking and concerns regarding the economy, inflation and monetary policy. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they won’t affect the markets or mortgage rates until afternoon hours.

The Commerce Department will post November’s Factory Orders data late Wednesday morning. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted late last week, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as electronics and autos. Examples of non-durable goods are food and clothing. Analysts are expecting to see an increase of 2.1% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a minor change in rates. The smaller the increase, the better the news for mortgage rates.

The final report of the week comes Friday morning when the Labor Department will post December’s employment figures. The Employment report is arguably the most important monthly release we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a decline in payrolls and earnings would be ideal news for the bond market.

Current forecasts call for a 0.1% rise from November’s unemployment rate of 8.6%, 150,000 new jobs added to the economy and an increase in earnings of 0.2%. If we see weaker than expected results, mortgage rates should improve Friday. However, stronger than expected readings will likely raise optimism about the economy, pushing mortgage rates sharply higher.

Overall, the key data of the week will be Friday’s Employment report, but look for tomorrow and Wednesday to be active due to the economic data and FOMC minutes scheduled. If they give us favorable results, mortgage rates will likely move lower for the week. But if not, we can expect to see mortgage rates move higher on the week.