Forecast for the Week

Housing dominates the headlines this week with several important reports.

• Housing news kicks off on Monday with the National Association of Home Builders Housing Market Index. In addition, July Housing Starts and Building Permits will be reported on Tuesday, followed by July Existing Home Sales on Thursday.
• The closely watched Consumer Price Index will be released on Tuesday, and investors will be looking to see if there are any inflation pressures at the consumer level.
• Weekly Initial Jobless Claims will be reported on Thursday, along with news from the manufacturing sector via the Philadelphia Fed Index.

In addition, the minutes from the Fed’s July meeting of the Federal Open Market Committee will be released on Wednesday and those always have 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 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, Bonds and home loan rates benefitted from news here at home and overseas. I’ll continue to monitor their movement closely.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday August 15, 2014)

The Mortgage Market Guide View…

Feeling Stuck?
4 Steps to Getting Back on Track

If you’re feeling stuck—whether in work, relationships, business partnerships or life in general—and can’t figure out how to get yourself moving again, best-selling author and columnist Paul B. Brown has a plan.

In his latest book, Own Your Future: How to Think Like an Entrepreneur and Thrive in an Unpredictable Economy, Brown shares four easy steps for getting unstuck.

Step 1: Know what you want. What is the result you’re aiming for? Don’t worry if the objective is vague—and don’t be overly committed to any single plan or strategy, as those may change—just be sure of the outcome you want.

Step 2: Take a small step toward it. Brown says this is vital, because mulling things over too long is overrated. Taking a tiny, inexpensive (in terms of time, money and other resources) step keeps you from over-investing.

Step 3: Learn from that step. It’s vital to pause and see what you learned from the action you took. Even if your small step doesn’t work, you’ll learn something. You may discover what not to do, or you may discover what you can do better. On the other hand, if your small step works, you’re ready for even more success!

Step 4: Repeat Steps 2 and 3. Movement creates momentum—and as long as you remain committed to realizing Step 1 (as opposed to a specific plan) and build upon what you learned from Step 2, you’ll eventually realize your outcome.

“When you don’t know what to do, action trumps everything,” says Brown. “Thinking is fine, but if you all do is think, at the end of the day all you are going to have is thoughts. You need to take action. And once you do, you are no longer stuck.”

As always, please feel free to pass these tips along to your team, colleagues and clients.

Sources: Inc. Magazine, Amazon

Economic Calendar for the Week of August 18 – August 22

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Mon. August 18	10:00	Housing Market Index	Aug	NA		53	Moderate
Tue. August 19	08:30	Core Consumer Price Index (CPI)	Jul	NA		0.1%	HIGH
Tue. August 19	08:30	Consumer Price Index (CPI)	Jul	NA		0.4%	HIGH
Tue. August 19	08:30	Housing Starts	Jul	NA		893K	Moderate
Tue. August 19	08:30	Building Permits	Jul	NA		963K	Moderate
Wed. August 20	02:00	FOMC Minutes	7/30	NA		NA	HIGH
Thu. August 21	08:30	Jobless Claims (Initial)	8/16	NA		NA	Moderate
Thu. August 21	10:00	Existing Home Sales	Jul	NA		5.04M	Moderate
Thu. August 21	10:00	Philadelphia Fed Index	Aug	NA		23.9	HIGH

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