My New Blog

 

Compliments of

Jonathan White

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

440 Harvard Street

Brookline, MA 02446

     

 

Housing Sector Picks Up

 

It was a relatively quiet week for mortgage rates. The major economic data came in close to the expected levels, and there was little decisive news about the trade negotiations with China. 

 

The most significant economic data released this week came from the housing sector, and lower mortgage rates have been boosting recent activity. In October, sales of previously owned (existing) homes increased from September and were 5% higher than a year ago. National median existing-home prices were up 6% from a year ago. A lack of inventory remained the primary trouble spot in many regions, as the number of homes for sale was at just a 3.9-month supply nationally, well below the 6.0-month supply which is considered a healthy balance between buyers and sellers.

 

However, the latest reports contained signs that the pace of construction may be picking up, which could help ease tight inventory levels. In October, housing starts showed solid improvement from September and were 9% higher than a year ago. Building permits, which are a leading indicator of future construction, posted even stronger monthly gains and were at the best level since May 2007. In addition, the NAHB housing index showed that home builder confidence remained around 70, far above the readings near 60 seen a year ago. 

 

The minutes from the October 30 Fed meeting were consistent with recent comments from Fed officials and caused little reaction. In short, the minutes indicated that further changes in monetary policy will be unlikely as long as the economy performs roughly as expected with modest growth and inflation near the Fed's target level. Officials highlighted uncertainty about the impact of trade tensions on global economic activity as a potential risk to the economic outlook. 

 

 

Looking ahead, New Home Sales will be released on Tuesday. Core PCE, Durable Orders, Personal Income, and Pending Home Sales will come out on Wednesday ahead of the holiday. In addition, news about the trade negotiations with China or the impeachment inquiry could have an influence. Mortgage markets will be closed on Thursday and will close early on Friday for Thanksgiving.

 

Weekly Change

10yr Treasury

fell

0.06

Dow

fell

200

NASDAQ

fell

50

Calendar

Tue

11/26

New Home Sales

Wed

11/27

Core PCE

Wed

11/27

Durable Orders

 

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

 

 

Posted by Jonathan White on November 22nd, 2019 11:41 AM

Compliments of

JonathanWhite

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

1280 Centre Street

Newton,MA02459

Sentiment Remains High

Last Friday's Employment report left investors feeling good about buying bonds, and mortgage rates improved over the first half of this week. An announcement from President Trump on Thursday was negative for bonds, however, and a partial reversal took place. After a couple of weeks with relatively little net change, mortgage rates ended this week a little lower.

The much weaker than expected wage growth in the Employment report released on February 3 eased investor concerns about future inflation. Lower inflation increases the value of future cash flows from bonds. With little economic news early in the week, investors purchased bonds, including mortgage-backed securities (MBS). Since mortgage rates are set based on MBS prices, rates declined.

On Thursday, President Trump said to expect an announcement about tax cuts in two to three weeks. Mortgage rates moved a little higher after the comment. There are a couple of reasons why tax cuts are viewed as negative for mortgage rates. The first is that tax cuts increase the wealth of the affected individuals or businesses. As they spend some of this money, it boosts economic activity, which in turn raises the outlook for future inflation. The second reason is that tax cuts increase the budget deficit, at least initially. This means that the government has to issue more Treasury bonds to fund the deficit. The added supply reduces the value of bonds, including MBS.

The report on Consumer Sentiment released on Friday showed that consumers remained optimistic about economic activity. While the reading was a little below the 13-year high seen last month, it was still quite high by historical standards. This survey from the University of Michigan measures the level of optimism or pessimism about current and future economic conditions.

Looking ahead, Retail Sales will be released on Wednesday. Consumer spending accounts for about 70% of economic output in the U.S., and the retail sales data is a key indicator. The Consumer Price Index (CPI), a widely followed monthly inflation report, also will come out on Wednesday. CPI looks at the price change for goods and services which are purchased by consumers. Housing Starts will be released on Thursday. In addition, Fed Vice Chair Fisher will be speaking on Saturday morning, and Fed Chair Yellen will deliver her semi-annual testimony to Congress on Tuesday and Wednesday.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

Posted by Jonathan White on February 10th, 2017 12:39 PM

 

Compliments of

Jonathan White

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

1280 Centre Street

Newton, MA 02459

     

 

ECB Stimulus Disappoints

 

During a week packed with major economic news, the biggest story came from Europe. On Thursday, the ECB added less stimulus than expected, causing global bond yields to increase sharply. Weaker than expected manufacturing data on Tuesday helped offset the increase in mortgage rates, however. Friday's key labor market data had little net impact. Mortgage rates ended the week just a little higher.

 

The European Central Bank (ECB) announced additional stimulus measures, but the package was smaller than investors had expected. The ECB cut rates and will extend its bond purchase program by six months, but the quantity of monthly purchases will remain at $60 billion euros. Investors were looking for a large expansion of this figure. The smaller than expected package means less added demand for bonds, and bond yields around the world, including U.S. mortgage-backed securities, moved higher on the news. This caused mortgage rates to move higher.

 

While Europe and most other countries are adding stimulus, the Fed is beginning a cycle to tighten monetary policy. This has raised the value of the U.S. dollar, which increases the cost of U.S. goods for foreign consumers and hurts the U.S. manufacturing sector. This was seen on Tuesday as the ISM national manufacturing index unexpectedly dropped to the lowest level since 2009. Slower economic growth is positive for mortgage rates, because it reduces inflationary pressure, and this report caused rates to move lower.

 

Friday's important BLS employment report was a little stronger than expected. Against a consensus forecast of 190K, the economy added 211K jobs in November. Upward revisions to prior months added another 35K. The Unemployment Rate remained at 5.0%. Average hourly earnings, a proxy for wage growth, were 2.3% higher than a year ago. 

 

The report caused some volatility, but it had little net effect on mortgage rates. The solid labor market data made investors nearly certain that the Fed will hike rates at the next meeting on December 16.

 

 

Next week, the second biggest report of the month, Retail Sales, will be released on Friday. Retail sales account for about 70% of economic activity. Before that, the JOLTS report will be released on Tuesday. JOLTS measures job openings and labor turnover rates, and this report is closely watched by Fed officials. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

 

 

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

 

 

 

Posted in:Mortgage and tagged: mortgage
Posted by Jonathan White on December 4th, 2015 12:59 PM

 

Compliments of

Jonathan White

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

1280 Centre Street

Newton, MA 02459

     

 

Job Gains Surge

 

Comments from Fed officials and a much stronger than expected Employment report were negative for mortgage rates over the past week. As a result, mortgage rates ended the week higher.

 

Many top Fed officials made speeches over the last few days, and they shared a similar message.  As the Fed's Lockhart put it, a rate hike is possible at the next meeting on December 16, but that it is not a "certainty." Fed Chair Yellen said essentially the same thing. Each Fed official repeated that the decision will depend on the performance of the economy. 

 

With this in mind, Friday's stronger than expected Employment report caused investors to increase their expectations for a rate hike at the next Fed meeting. Against a consensus forecast of 190K, the economy added 271K jobs in October, the strongest reading of the year. Upward revisions to prior months added another 12K. The average job gains over the past three months were 187K. 

 

The Unemployment Rate unexpectedly declined from 5.1% to 5.0%, the lowest level since April 2008. Average Hourly Earnings, an indicator of wage growth, also far exceeded expectations, and they were 2.5% higher than a year ago. This report revealed strength in nearly every area. 

 

 

Next week, the second biggest report of the month, Retail Sales, will be released on Friday. Retail Sales account for about 70% of economic activity. Before that, the JOLTS report will be released on Thursday. JOLTS measures job openings and labor turnover rates, and this report is closely watched by Fed officials. In addition, there will be Treasury auctions on Monday, Tuesday, and Thursday. Mortgage markets will be closed on Wednesday in observance of Veterans Day. 

 

 

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

 

 

 

Posted in:Mortgage and tagged: mortgage
Posted by Jonathan White on November 6th, 2015 3:28 PM

 

Compliments of

Jonathan White

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

1280 Centre Street

Newton, MA 02459

     

 

Foreign Central Banks

 

Foreign central banks were the main influence on U.S. mortgage rates over the past week. The news from Europe was a net positive, while China's policy change was negative. They mostly offset each other, and mortgage rates ended the week just a little higher.

 

On Thursday, European Central Bank (ECB) President Mario Draghi suggested that the ECB may expand its bond purchase program at its next meeting in December. While this is intended to stimulate the economy which could lead to higher inflation, the primary impact on bonds is from increased demand. The purchase of European bonds makes other global bonds, including U.S. mortgage-backed securities (MBS), relatively more attractive, increasing their demand as well. Since mortgage rates are set based on MBS prices, rates improved after the news. The added stimulus in China to boost economic growth announced on Friday did not involve any bond purchases. As a result, the main effect for mortgage rates was to raise expectations for future inflation, which was negative. 

 

It was a solid week for the housing market data. September existing home sales increased 5% from August, near the best levels in eight years, and they were 9% higher than a year ago. Total inventory of existing homes available for sale fell to a 4.8-month supply, and it was 3% lower than a year ago. The median existing-home price was 6% higher than a year ago. 

 

September single-family housing starts have held steady over the last three months near the best levels of the year. They were 12% higher than this time last year. Single-family building permits also were up a good deal from a year ago. 

 

 

Next week, the Fed Statement will be released on Wednesday. Investors do not expect a change in policy at this meeting, and they will be looking for guidance about the timing for the first rate hike. Beyond the Fed meeting, New Home Sales will be released on Monday. Durable Orders, an important indicator of economic activity, will come out on Tuesday. The first reading for third quarter GDP, the broadest measure of economic growth, will be released on Thursday, along with Pending Home Sales. Core PCE inflation will come out on Friday. 

 

 

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

 

 

 

Posted in:Mortgage and tagged: mortgage
Posted by Jonathan White on October 23rd, 2015 2:31 PM

Archives:

My Favorite Blogs:

Sites That Link to This Blog: