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For the week of Nov 20, 2017 --- Vol. 15, Issue 47

Happy Thanksgiving to all!

Last Week in Review: Retail Sales edged higher while Housing Starts surged in October.

Forecast for the Week: Meeting minutes might move markets in this short week.

View: Go paper "light" in your office with these digital ideas.

Last Week in Review 

"Who will buy my sweet red roses?" Oliver. Retailers looked to October sales for signs of a blossoming or thorny holiday shopping season ahead. Meanwhile, Housing Starts dug out from storm damage.

Retail Sales slowed in October, rising just 0.2 percent. This was down from the 1.9 percent increase registered in September, which was boosted by post-hurricane spending. Year over year, sales were up 4.6 percent. Despite the small gains in October, only a few sectors were weak: building material suppliers, gas stations and non-store retailers. Heading into the holiday shopping season, the National Retail Federation expects total sales of $678.75 billion to $682 billion, up from $655.8 billion last year.

Housing Starts hit a one-year high in October due in part to disruptions in September caused by Hurricanes Harvey and Irma. The Commerce Department reported that Housing Starts surged to an annual rate of 1.29 million units, up 13.7 percent from September versus the 1.198 million expected. However, starts were down nearly 3 percent from a year ago. Single-family starts, which account for the largest share of the housing market, rose 5.3 percent. Starts on multi-family dwellings of five or more units rose a whopping 37.4 percent from September to October.

Building Permits, a sign of future construction, rose 5.9 percent from September to an annual rate of 1.297 million.

Wholesale inflation came in hotter than expected in October. The Producer Price Index (PPI) rose 0.4 percent versus the 0.1 percent expected, fueled by higher costs for services. Core PPI, which excludes food and energy, also rose 0.4 percent, above expectations. Year over year, PPI saw the biggest increase since February 2012, rising 2.8 percent. Core PPI increased 2.4 percent over last year.

These inflationary pressures didn't carry over to the more closely-watched consumer inflation reading, which remained tame. The October Consumer Price Index (CPI) and Core CPI were in line with expectations.

Inflation is an important measure to watch because inflationary pressures reduce the value of fixed investments like Mortgage Bonds and can harm the home loan rates tied to them.

At this time, home loan rates remain attractive.

If you or someone you know has questions about home financing or home loan rates please contact me. I'd be happy to help.

Forecast for the Week

Meeting minutes might be the market mover in this short week. Markets are closed Thursday for Thanksgiving. Stock markets close early at 1 p.m. ET Friday. Bond markets close at 2 p.m. ET Friday.

  • Existing Home Sales will be released on Tuesday.
  • Weekly Initial Jobless Claims, Durable Goods Orders and the Consumer Sentiment Index will be delivered on Wednesday along with the Federal Open Market Committee meeting minutes.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, 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. When Bond prices 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 are 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 Bond prices have been volatile. Despite the ups and downs, home loan rates remain near historic lows.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Nov 17, 2017)

Japanese Candlestick Chart

 

 

The Mortgage Market Guide View...

5 Digital Ways to Go Paper "Light"

While taking an office entirely paperless is probably unrealistic for most professionals, adopting a paper "light" approach can be an easy alternative. So whether you want to take a more conscious approach to paper use or reduce office clutter in the new year, here are a few digital solutions to try.

Ditch paper to-do lists that can't ping your smartphone with reminders or help you follow long-term goals. Instead, consider creating and tracking tasks and to-dos with Outlook or Gmail.

Capture business card content and convert it to digital contact information that goes straight into your smartphone address book with WorldCard Mobile for iPhone and Android.

Scan documents without a hardware scanner using TurboScan for iPhone or CamScanner for Android. Capture documents with the camera on your smartphone, share them via a cloud storage service like Google Drive or Box, and view from any device.

Dual or multi-monitor setups at workstations can reduce the need to print documents for cross-referencing. Instead, documents can be opened on multiple screens.

Opt for paperless subscriptions to newspapers, magazines and trade publications, which can be read on computers, tablets and e-readers. In addition to reducing waste, paperless subscriptions free up storage space on shelves and are often conveniently searchable and shareable.

Try taking your paper "light" strategy to the next level with some of these easy tips!

Source: CIO

Economic Calendar for the Week of November 20 - November 24

Date

ET

Economic Report

For

Estimate

Actual

Prior

Impact

Tue. November 21

10:00

Existing Home Sales

Oct

NA

5.39M

Moderate

Wed. November 22

08:30

Durable Goods Orders

Oct

NA

2.2%

Moderate

Wed. November 22

10:00

Consumer Sentiment Index (UoM)

Nov

NA

97.8

Moderate

Wed. November 22

08:30

Jobless Claims (Initial)

11/18

NA

NA

Moderate

Wed. November 22

02:00

FOMC Minutes

Nov

NA

NA

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.

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Pam Woodall
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Fort Walton Beach

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