In This Issue  |
Last Week in Review: Housing news was front and center, plus the minutes from the Fed's July meeting were released.
Forecast for the Week: The last week of August brings some key reports, with news on inflation, Gross Domestic Product, Consumer Confidence, and more.
View: If you use your mobile phone for work calls, there are some easy ways to save minutes and money.
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| Last Week in Review |
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"I'm on my way...just set me free...home sweet home." The lyrics from Motley Crue's Home Sweet Home sound like a tune the housing market could be singing, as the news shows that the housing sector continues to recover--for the most part.
 Existing Home Sales rose by 6.5 percent in July from June and are up 17.2 percent since this time last year. In addition, the Federal Housing Finance Agency reported that home prices rose 7.7 percent in the year ended in June. From May to June, prices rose by 0.7 percent. However, New Home Sales dropped 13.4 percent in July from June, below expectations, and June's numbers were also revised lower.
Also of note last week, the minutes from the Fed's July meeting of the Federal Open Market Committee were released--and they offered no clarity as to when the Fed will begin tapering its Bond purchases. Remember that the Fed has been buying $85 billion of Bonds a month to help stimulate the economy and housing market. This includes Mortgage Bonds, to which home loan rates are tied, and these purchases have helped home loan rates remain attractive.
The Fed has said the rate of its purchases will continue to depend on economic data, and could be increased or decreased accordingly. Jobs data is one area the Fed will be watching especially closely. And last week, there was a jump in weekly Initial Jobless Claims, which rose by 13,000 to 336,000. Though this was in line with estimates and the figure remains near post-recession lows, it is the highest level in a month. However, the 4-week average, which evens out seasonal abnormalities, fell to 330,500, near 6-year lows.
What does this mean for home loan rates? Economic data in the coming weeks will be a key factor in whether the Fed begins tapering its Bond purchases as early as its meeting in mid-September, or if it waits until later in the year or even 2014. This timing could pay a big role in the direction Bonds and home loan rates move in the months ahead.
The bottom line is that home loan rates remain attractive compared to historical levels and now remains a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.
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| Forecast for the Week |
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The calendar is busy this week, with important news from start to finish.
- The week kicks off Monday with Durable Goods Orders, which are orders for items that last for an extended period of time.
- In housing news, the S&P/Case-Shiller Home Price Index will be released on Tuesday.
- Consumer Confidence will also be released on Tuesday with the Consumer Sentiment Index following on Friday.
- As usual, Weekly Initial Jobless Claims will be released on Thursday, as claims hover near six-year lows.
- Also on Thursday, Gross Domestic Product for the second quarter will be closely watched for any signs of an uptick in economic growth. The initial reading was a rather weak 1.7 percent.
- Ending the week on Friday, we'll see Personal Consumption Expenditures, the Fed's favorite read on inflation, along with Personal Income, Personal Spending, and Chicago PMI data.
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 were able to stabilize last week. Home loan rates remain attractive and I will continue to monitor them closely.
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| The Mortgage Market Guide View... |
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How to Make Free Calls
Software and apps you can install on your computer or smart phone can help you save money on calls.
By Cameron Huddleston, Kiplinger.com
You've likely heard that ditching your landline is a good money-saving move. But if you're relying on your mobile phone to make all your calls, you might have to pay more to get unlimited minutes. So to keep costs down, consider using a free Internet calling service. There are several you can download to your computer, smart phone or tablet. These services also are ideal for people who make international calls and for college students who want to keep in touch with friends and families. Because they're free, you can try out all of the services below to see which works best for you.
Skype. To use Skype, you need an Internet connection and a computer or mobile device with a microphone and speakers. It only takes a few minutes to install it and create an account with a username that will serve as your contact information (rather than a phone number). Then you can make free voice and video calls (if you have a webcam) to other Skype users. You also can use Skype for instant messaging and file sharing.
Viber. Unlike Skype, Viber doesn't require you to create an account with a username. Instead, it uses your mobile phone number. So you must first install it on your smart phone. Then you can install it on your computer if you want. In addition to free voice and video calls, Viber offers free text and photo messaging and location sharing with other Viber users. Just make sure you use a Wi-Fi connection rather than 3G so you don't use your phone's data.
Vonage Mobile. This relatively new Android and iPhone app lets users make free voice and video calls and send free text messages to others with the app. You also can use it to make free calls to Vonage home phone customers. Like Viber, it uses your mobile phone number as your caller ID.
Reprinted with permission. All Contents ©2013 The Kiplinger Washington Editors. Kiplinger.com.
Economic Calendar for the Week of August 26 - August 30
Date
|
ET
|
Economic Report
|
For
|
Estimate
|
Actual
|
Prior
|
Impact
|
| Mon. August 26 |
08:30
| Durable Goods Orders |
Jul
|
NA
|
|
3.9%
|
Moderate
|
| Tue. August 27 |
09:00
| S&P/Case-Shiller Home Price Index |
Jun
|
NA
|
|
12.2%
|
Moderate
|
| Tue. August 27 |
10:00
| Consumer Confidence |
Aug
|
NA
|
|
80.3
|
Moderate
|
| Wed. August 28 |
10:00
| Pending Home Sales |
Jul
|
NA
|
|
-0.4%
|
Moderate
|
| Thu. August 29 |
08:30
| GDP Chain Deflator |
Q2
|
NA
|
|
0.7%
|
Moderate
|
| Thu. August 29 |
08:30
| Gross Domestic Product (GDP) |
Q2
|
NA
|
|
1.7%
|
Moderate
|
| Thu. August 29 |
08:30
| Jobless Claims (Initial) |
8/24
|
NA
|
|
NA
|
Moderate
|
| Fri. August 30 |
08:30
| Personal Income |
Jul
|
NA
|
|
0.3%
|
Moderate
|
| Fri. August 30 |
08:30
| Personal Spending |
Jul
|
NA
|
|
0.5%
|
Moderate
|
| Fri. August 30 |
08:30
| Personal Consumption Expenditures and Core PCE |
Jul
|
NA
|
|
0.2%
|
HIGH
|
| Fri. August 30 |
08:30
| Personal Consumption Expenditures and Core PCE |
YOY
|
NA
|
|
1.2%
|
HIGH
|
| Fri. August 30 |
08:30
| Consumer Sentiment Index (UoM) |
Aug
|
NA
|
|
80.0
|
Moderate
|
| Fri. August 30 |
09:45
| Chicago PMI |
Aug
|
NA
|
|
52.3
|
HIGH
|
|
|
|
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