Forecast for the Week

There are just a few economic reports ahead, with the highlight being the October Jobs Report
on Friday.

• Economic news begins on Monday with the ISM Index, a national manufacturing index. The ISM Services Index follows on Wednesday.
• The first report from the labor sector comes via Wednesday’s ADP Employment Report.
• Weekly Initial Jobless Claims will be released on Thursday, as claims continue to trend below the 300,000 level. Productivity for the third quarter will also be released Thursday.
• Friday brings the October Jobs Report, which includes Non-farm Payrolls and the Unemployment Rate.

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 have moved a bit lower but home loan rates remain near 18-month lows.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday October 31, 2014)

The Mortgage Market Guide View…

5 Common Word Mistakes to Avoid

For many people, a sign of true quality and professionalism lies in the day-to-day details, like writing.

Here are five common word pairings that are frequently misused in business communications. Polish your writing in letters, email and on the web by remembering proper usage.

Complimentary or complementary

• The first means free. “Receive a complimentary copy of our handbook.“
• The second means to complete or enhance. “This new pattern will complement any décor.”

Farther or further

• The first refers to specific, measurable distance. “Drive a little farther and save a lot.”
• The second refers to something more than what has already been done. In the sentence that follows, for example, you wouldn’t physically stretch your money. You’d do more with it. “Stretch your money further with this option.”

Principal or principle

• The first means an initial sum of money, first in order of importance, or a person. “Your principal focus should be family.”
• The second means a fundamental truth or guide. “The principle rule in home ownership is to protect your investment.”

Stationery or stationary

• The first refers to letterhead, notecards and envelopes. A good reminder is to think “e” for envelope. “Have we ordered new stationery yet?”
• The second means immobile.

Titled or entitled

• The first refers to the title of something. “The latest report is titled Top Industry Trends.”
• The second means having right or claim to. “You are entitled to review your credit report for free.”

Please feel free to pass these tips along to your team, clients and colleagues.

Economic Calendar for the Week of November 3 – November 7

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