Forecast For The Week 

The economic calendar this week will give the investor a broad view of the U.S. economybut the Federal Open Market Committee (FOMC) meeting will be front and center in the minds of investors. Here’s a break down of what to watch:

• Consumer Confidence will be released on Tuesday with Consumer Sentiment set to be delivered on Friday.
• Also on Tuesday, New Home Sales for March will be released, followed by Pending Home Sales for March on Thursday.
• On Wednesday, Durable Orders – which are products that are supposed to last at least three years – will be released.
• Initial Weekly Jobless Claims will be released on Thursday. The number of new claims has been steadily rising in the past month, which is not a good sign for the labor markets. So all eyes will once again be on this report.
• On Friday, the first reading on Gross Domestic Product (GDP) for the first quarter of 2012 will be announced.
• Also on Friday, we’ll see the Employment Cost Index, which measures the costs of hiring and paying the American workforce. Higher costs could lead to inflation pressures, which could push Bond prices lower and home loan rates higher.

In addition to those reports, this week’s FOMC meeting will be closely watched by both the Bond and Stock markets for any clues on how the U.S.economy is holding up.

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, the mix of news last week benefitted Bonds and home loan rates. I’ll be watching closely to see what happens this week. 

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Apr 20, 2012)

 
The Mortgage Market Guide View  

Fun Housing Facts

The United States Census Bureau recently released some fun facts related to housing across the country, based on data for 2010. Here are just a few highlights from the release that you may find interestingand may want to pass on to others.

Heating Our Homes

• 57 million = Number of houses heated by utility gas.
• 2.2 million = Number of houses heated by wood.
• 38,010 = Number of houses heated by solar energy.

From Home to Work

• 25.3 minutes = Average time workers across the country spent getting from home to work.
• 31.8 minutes = Longest commute time in the nation, which belonged to Maryland residents.
• 16.1 minutes = Shortest commute time in the nation, which belonged to North Dakota residents.

Home Sweet Home

• 2,392 square feet = Average size of a single-family house built in 2010. That number was down a little from 2,438 square feet in 2009.
• 131.7 million = Number of housing units counted in the 2010 Census. Compare that to 37.2 million in the first housing census, which was conducted in 1940!

Bonus Fact!

The first housing census in 1940 featured 31 housing questions – including some we may find odd today, such as whether the house had a radio toilets or an outhouse electric lighting and running water.

Conversely, the 2010 census only included two housing questions: (1) whether the home was owned or rented and (2) whether the respondent sometimes lived or stayed somewhere else. The number of housing questions in the census has dropped because we now ask a number of housing questions in the American Community Survey, which is sent to about 3 million households nationwide every year.

Over the years, housing has really changed. But regardless of the time or location, one thing remains the same there’s no place like home!

Economic Calendar for the Week of April 23 – April 27

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