Forecast for the Week

This week’s economic calendar is packed with important data on housing, inflation, and economic growth.

• Housing data is plentiful this week with the S&P Case-Shiller Home Price Index and New Home Sales being reported on Tuesday. Pending Home Sales follows on Thursday.
• We’ll get a read on consumer attitudes towards the U.S. economy with Consumer Confidence on Tuesday and the Consumer Sentiment Index on Friday.
• Wednesday brings February’s Durable Goods Orders, which are orders for items that last for an extended period of time.
• Weekly Initial Jobless Claims will be released as usual on Thursday. Also look for the final reading of Gross Domestic Product for the fourth quarter of 2013.
• Ending the week, the inflation-reading Personal Consumption Expenditures data along with Personal Income and Personal Spending will be delivered on Friday.

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 on which home loan rates are based.

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 worsened after the Fed meeting but were able to stabilize. Home loan rates remain near historic best levels and I will continue to monitor them closely.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday March 21, 2014)

The Mortgage Market Guide View…

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Tue. March 25	09:00	S&P/Case-Shiller Home Price Index	Jan	NA		13.4%	Moderate
Tue. March 25	10:00	Consumer Confidence	Mar	NA		78.1	Moderate
Tue. March 25	10:30	New Home Sales	Feb	NA		468K	Moderate
Wed. March 26	08:30	Durable Goods Orders	Feb	NA		-1.0%	Moderate
Thu. March 27	08:30	GDP Chain Deflator	Q4	NA		1.6%	Moderate
Thu. March 27	08:30	Gross Domestic Product (GDP)	Q4	NA		2.4%	Moderate
Thu. March 27	08:30	Jobless Claims (Initial)	3/22	NA		NA	Moderate
Thu. March 27	10:00	Pending Home Sales	Feb	NA		0.1%	Moderate
Fri. March 28	08:30	Personal Income	Feb	NA		0.3%	Moderate
Fri. March 28	08:30	Personal Spending	Feb	NA		0.4%	Moderate
Fri. March 28	08:30	Personal Consumption Expenditures and Core PCE	Feb	NA		0.1%	HIGH
Fri. March 28	08:30	Personal Consumption Expenditures and Core PCE	YOY	NA		1.1%	HIGH
Fri. March 28	10:00	Consumer Sentiment Index (UoM)	Mar	NA		79.9	Moderate

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