MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

MMG Weekly / Vantage Production.blueForecast for the Week

A full week of economic reports is ahead. Plus the Fed meets, and it could make an important decision regarding its Bond and Treasury purchases.

  • Economic data kicks off on Monday with manufacturing data from the Empire State Index, followed by the Philadelphia Fed Index on Thursday.
  • Tuesday brings important inflation data, with the Consumer Price Index for August.
  • Also on Tuesday, look for the National Association of Home Builders’ Housing Market Index, which will be followed by Housing Starts and Building Permits on Wednesday and Existing Home Sales on Thursday.
  • Weekly Initial Jobless Claims will also be reported on Thursday. Last week’s claims fell by a whopping 31,000 to 292,000, which was the lowest reading since April 2006. However, the Labor Department said that two states weren’t able to process all of the claims due to changes in their computer systems.

In addition, the policy statement from the Fed’s meeting is expected to be released at 12:30 p.m. ET Wednesday. This will be followed by the FOMC economic projections at 2:00 p.m. and a press conference by Fed Chairman Ben Bernanke at 2:30 p.m. This activity could have a big impact on Bonds and home loan rates.

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, Mortgage Bonds have stabilized ahead of the Fed meeting. I’ll be watching the news closely to see what the Fed has to say.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday September 13, 2013)

Japanese Candlestick Chart

The Mortgage Market Guide View…

Productivity Points
Important Tips for Working with Deadlines

Anything that gets done in business gets done because of a deadline. When you are setting deadlines, there are several key factors to keep in mind.

1. Anticipate a little. Before you set any deadline, ask yourself two key questions. How long previous similar projects have realistically taken to complete? What obstacles are most likely to cause delays this time?

2. Don’t underestimate procrastination. Procrastinators think they work better under pressure, but it’s much more likely that without pressure they wouldn’t do much work at all.

3. Use more deadlines. Setting interim deadlines, closer together, with smaller targets can solve timing, motivation and procrastination problems. First, for non-procrastinators, dividing the project into smaller chunks gives more frequent achievements, keeping motivation levels up. Second, it keeps the pressure of regular looming due dates on procrastinators. And third, it helps you be aware of how you’re progressing toward your overall deadline, so you can anticipate any large delays early and communicate with key parties with plenty of time. This will help minimize frustration among the impacted parties.

Feel free to pass these tips along to help your team, clients, and colleagues know how to deal more effectively with deadlines.

Economic Calendar for the Week of September 16 – September 20

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. September 16
08:30
Empire State Index
Sep
NA
8.6
Moderate
Tue. September 17
08:30
Consumer Price Index (CPI)
Aug
NA
0.2%
HIGH
Tue. September 17
08:30
Core Consumer Price Index (CPI)
Aug
NA
0.2%
HIGH
Tue. September 17
10:00
Housing Market Index
Sep
NA
59
Moderate
Wed. September 18
08:30
Building Permits
Aug
NA
943K
Moderate
Wed. September 18
08:30
Housing Starts
Aug
NA
896K
Moderate
Wed. September 18
12:30
FOMC Meeting
Sep
NA
.25%
HIGH
Thu. September 19
08:30
Jobless Claims (Initial)
9/14
NA
292K
Moderate
Thu. September 19
10:00
Existing Home Sales
Aug
NA
5.39M
Moderate
Thu. September 19
10:00
Philadelphia Fed Index
Sep
NA
9.3
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.

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