MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

Forecast for the Week 

This second half of the week heats up, plus an important Fed meeting is ahead.

  • Economic data kicks off on Wednesday with New Home Sales, which will be followed by Pending Home Sales on Thursday. The reports come after positive Housing Starts numbers for September.
  • Also on Thursday, Durable Goods Orders and weekly Initial Jobless Claims will be delivered.
  • Friday’s initial reading on third quarter Gross Domestic Product (GDP) will be closely watched, after an anemic 1.3% reading for the second quarter.
  • The final reading on Consumer Sentiment for October will also be announced on Friday.

In addition, the Federal Open Market Committee (FOMC) will hold its two-day regularly scheduled meeting beginning on Tuesday, with the monetary policy statement reported at 12:30pm ET on Wednesday, and this always has the potential to move the markets.

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 worsened after last week’s better than expected economic reports. I’ll be watching closely to see what happens this week.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Oct 19, 2012)

Japanese Candlestick Chart
The Mortgage Market Guide View… 

3 Cost-Effective Communication Tips

There are so many ways to communicate with clients and referral partners these days that it’s tough to know which method to use. And, in all of the confusion, some tried-and-true methods may get overshadowed.

Michael Maher, author of The Seven Levels of Communication, offers some advice to help you focus on time- and cost-effective ways to reach out to clients:

1. Use email effectively. One of the biggest mistakes people make is trying to use email as an influencing tool. It’s very difficult to sell, convince, or influence by email. Instead, you should use it to confirm appointments, forward information, attach articles, link to relevant podcasts or videos, and so on. That’s one of the most effective ways to use emails, and it can help lead to more productive face-to-face communication.

2. Use handwritten notes more often. Handwritten notes are one of the most powerful forms of communication. Imagine seeing an ad inviting you to an event or reading an email about the same event. Are you going to the event? Eh, maybe. Now envision a handwritten note from the organizer of this event specifically inviting you to the event. When people try the handwritten approach, the results are astounding. The bottom line is that handwritten notes are impactful.

3. Use your ears to connect with clients. Relationship building is much more about being interested than it is to about being interesting. Want to show the other person you are interested? Listen. Want to make the other person feel important? Listen. Want to become wiser? Listen. Listening is the key to relationships.

Following these three simple communication tips can help lead to stronger (and more productive) relationships with clients and referral partners.

Economic Calendar for the Week of October 22 – October 26

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Wed. October 24
12:30
FOMC Meeting
Oct
NA
NA
HIGH
Wed. October 24
10:00
New Home Sales
Sept
NA
373K
Moderate
Thu. October 25
08:30
Jobless Claims (Initial)
10/20
NA
NA
Moderate
Thu. October 25
08:30
Durable Goods Orders
Sept
NA
-13.2%
Moderate
Thu. October 25
10:00
Pending Home Sales
Sept
NA
-2.6%
Moderate
Fri. October 26
08:30
Gross Domestic Product (GDP)
Q3
NA
1.3%
Moderate
Fri. October 26
08:30
GDP Chain Deflator
Q3
NA
1.6%
Moderate
Fri. October 26
10:00
Consumer Sentiment Index (UoM)
Oct
NA
83.1
Moderate
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