Week in review

Send to a Friend Follow Me On:

Michael Magnabousco Corporate Account Executive Vantage Production Phone: 800-963-1900 x 1538 Direct Number 732-526-1538 License: Ask Me About This Service !! mmagnabousco@vantageproduction.com www.vantageproduction.com

In This Issue               Last Week in Review: Key housing and jobs data was released. Plus a surprising read on Gross Domestic Product, the broadest measure of economic activity. Forecast for the Week: This week's economic calendar is light, featuring readings on retail sales, jobless claims and wholesale inflation. View: See the important time tip that can make all the difference any time of year.       Last Week in Review               "Tomorrow is often the busiest day of the week." Spanish Proverb. And it sure seemed that way with last week's busy economic calendar, as Friday's Jobs Report capped off a week filled with data. Here are the highlights. The highly anticipated November Jobs Report revealed that employers created 203,000 jobs last month, above the 188,000 expected. The Unemployment Rate fell to a 5-year low of 7 percent while the Labor Force Participation Rate (LFPR) managed to tick up to 63.0 percent, though it is still at lows not seen since the late 1970s. The LFPR is a measure of how many people are looking for work. All in all this was a good report, but the labor market is not out of the woods yet. Also of significance, the second reading of third quarter Gross Domestic Product (GDP) rose by 3.6 percent, above expectations and the best level in a year and a half. But a closer look shows the gains coming from a large buildup in inventories. This is important to note because a buildup in inventories could cause goods to stay on the shelf and not materialize into sales, which could set the stage for a disappointing read in the fourth quarter. In housing news, research firm CoreLogic reported that home prices, including distressed sales, rose by 12.5 percent in October 2013 compared to October 2012. This marks the twentieth month of year-over-year home price gains. In addition, New Home Sales for September fell but October's New Home Sales surged 26 percent, coming in above expectations. Both reports were delayed due to the government shutdown. What does this mean for home loan rates? Remember that the Fed has been purchasing $85 billion in Bonds and Treasuries each month to stimulate the economy and housing market. The Fed has said that its decision regarding when to taper these purchases will be dependent on economic data. Whether data has been strong enough for the Fed to begin tapering these purchases after its meeting of the Federal Open Market Committee on December 17-18 remains to be seen. Either way, the timing of the Fed's decision will definitely impact home loan rates heading into 2014 and it's why economic data in the coming weeks will be important to monitor. The bottom line is that now remains a great time to consider a home purchase or refinance as home loan rates remain attractive compared to historical levels. Let me know if I can answer any questions at all for you or your clients.       Forecast for the Week               Economic data is light this week and doesn't kick off until Thursday. As usual, Thursday brings Weekly Initial Jobless Claims. Last week's claims dropped below 300,000, though this figure could have been skewed by the Thanksgiving holiday. Also on Thursday, Retail Sales will be delivered and will show the health of consumer spending. The last report this week will be the Producer Price Index on Friday, which will reveal if there are any inflation pressures at the wholesale level. 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 that home loan rates are based on. 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 and home loan rates have worsened in recent weeks, as some positive economic reports have caused concern that the Fed will taper its Bond purchases sooner rather than later. I will continue to monitor this story for all the latest developments. Chart: Fannie Mae 4.0% Mortgage Bond (Friday Dec 06, 2013)       The Mortgage Market Guide View...             Time Tips Taking the "Price" Out of Priceless "I once asked a five-year-old what he would take with him if he were going to Heaven. He replied, 'I would take my parents because I think that up there they would have more time with me.'... 'nuff said." - Art Linkletter, TV Host Time is a treasured commodity made more valuable because it is usually in short supply. When a day, an hour, or even one second passes, it cannot be returned. It is fixed. And it is finite. What might seem to be stating the obvious is really a profound concept worth our reflection during hectic holidays. This season, regardless of which holiday you celebrate or if you celebrate any at all, remind yourself that the family, friends, and even coworkers and clients gathered around you probably crave your attention much more than any other gift. The key is to consciously honor the person or event, to stay connected during your experience. This is all that "being in the moment" means, and it makes moments last. Consider setting aside a few hours for coffee with a friend. If you have kids, make a plan to take each one for their own special outing. Reserve some time each workday to call your favorite clients and colleagues, check-in, and personally wish them a happy holiday. Our "to-do list" is always right where we left it, our schedule can remain the paragon of organization, and success will eagerly await our return! But somehow the importance of these things will seem somewhat diminished and somehow less important when first we realize how precious, how priceless, our time really is to others. Feel free to pass these tips along to your team, clients, and colleagues! Economic Calendar for the Week of December 09 - December 13 Date ET Economic Report For Estimate Actual Prior Impact Thu. December 12 08:30 Jobless Claims (Initial) 12/7 315K   298K Moderate Thu. December 12 08:30 Retail Sales Nov 0.6%   0.4% HIGH Thu. December 12 08:30 Retail Sales ex-auto Nov 0.3%   0.2% HIGH Fri. December 13 08:30 Producer Price Index (PPI) Nov -0.1%   -0.2% Moderate Fri. December 13 08:30 Core Producer Price Index (PPI) Nov 0.1%   0.2% Moderate       test test test     The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.   As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.   Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Market Guide, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.     You received this email as a result of your ongoing business relationship with Michael Magnabousco. While beneficial to a wide audience, this information is also commercial in nature and it may contain advertising materials.   UNSUBSCRIBE: If you would like to stop receiving emails from Michael Magnabousco, you can easily unsubscribe.   Powered by DB Nurture.   Copyright 2013. PlatinumPro Marketing.