QE Chatter Continues and Economic News

In This Issue

Last Week in Review: More Fed chatter hit the wires about Quantitative Easing. Find out what happened. Forecast for the Week: The last week of February brings a full slate of economic news. View: Want your social media posts to be as effective as possible? Don't miss important information below.

Last Week in Review

"You don't know what you got until it's gone." Those lyrics from the band Chicago's 1980's hit could apply to the chatter from the Fed last week, as the debate about whether to continue their latest round of Bond buying, known as Quantitative Easing, continues. What is Quantitative Easing? Quantitative Easing is the concept of the Fed becoming a buyer of Treasuries and Bonds to try and stimulate the economy. Why does the Fed do Quantitative Easing? Oftentimes, the Fed does Quantitative Easing when they are hoping to (1) create inflation and avoid a deflationary economy, (2) lower the unemployment rate, and (3) boost Stock prices. For this latest round of Quantitative Easing, the Fed especially wanted to help stimulate the housing market and our economy overall. And the housing market has shown signs of improvement lately. While Housing Starts in January declined overall, single family Housing Starts rose to its highest rate since July 2008. Building Permits, a sign of future construction, also came in above expectations. These reports were the latest in a series of reports showing that the housing market is recovering. What is all the Fed chatter about? Last week, the minutes from the Fed's January meeting of the Federal Open Market Committee were released. The minutes noted that several Fed members would like to halt the Quantitative Easing program sooner than planned, because they are concerned about inflation. However, it's important to note that last week's Producer and Consumer Price Index Reports showed that inflation at both the wholesale and consumer levels remained tame in January. On the flip side, other Fed members are concerned that halting the program too soon could end the recovery in the housing market, and hinder our economic recovery overall. And given that the increase in the payroll tax in January left consumers with less money in their paychecks, and that Walmart has reported that February sales were the weakest in seven years, this is an important factor to consider as well. The biggest take away is that now remains a great time to consider a home purchase or refinance, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Feb 22, 2013) A busy week of reports is ahead, with news on housing, manufacturing, consumer sentiment, U.S. growth and inflation. The week starts and ends with a measure of how the consumer is feeling with Tuesday's Consumer Confidence Report and Friday's Consumer Sentiment Index. There's a double dose of housing news on Tuesday, with the Case Shiller Index and New Home Sales. Plus, look for Pending Home Sales on Wednesday. We'll get a sense of how the economy is doing with Wednesday's Durable Goods Orders, which measures orders for products used for an extended period of time, and Thursday's Gross Domestic Product, the biggest picture of economic activity. Also on Thursday, Weekly Initial Jobless Claims will be reported. Ending the week, Friday brings Personal Consumption Expenditures, the Fed's favorite measure of inflation, along with Personal Income and Spending and the ISM Index. 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 and home loan rates remain steady near record best levels. I'll continue to monitor them closely.

The Mortgage Market Guide View...

Best Days and Times for Posting to Social Media More than nine out of ten businesses spend six or more hours online each week maintaining a presence on social media. And while you probably already know the benefits of social media--better engagement with your market, better website traffic, improved sales--you might not realize that some days (and times!) are better than others for posting to social media. Social media analytics firm Socialbakers showed Facebook posts achieve 50% of their total reach within 30 minutes of being posted. In other words, half of all the people who will see your post have seen it within the first half-hour after you post it. Not only that, by the time 90 minutes have elapsed, your average post reaches less than 2% of total audience for the next seven hours before it drops off completely. That's why timing your posts properly is the best strategy. Here are the best days and times to post according to current research from Social Caffeine: Twitter BEST: 1 p.m. to 3 p.m., Monday through Thursday WORST: 8 p.m. to 9 a.m. Avoid after 3 p.m. Friday and weekends Facebook BEST: 1 p.m. to 4 p.m., peaking on Wednesdays at 3 p.m. WORST: 8 p.m. to 8 a.m., avoiding weekends LinkedIn BEST: 7 a.m. to 9 a.m. OR 5 p.m. to 6 p.m., Tuesday through Thursday WORST: 10 p.m. to 6 a.m., avoid Monday and Friday Pinterest BEST: 2 p.m. to 4 p.m. or 8 p.m. to 1 a.m., peaking on Saturday morning WORST: 5 p.m. to 7 p.m. and late afternoons Economic Calendar for the Week of February 25 - March 01 Date ET Economic Report For Estimate Actual Prior Impact Tue. February 26 09:00 S&P/Case-Shiller Home Price Index Dec 6.5% 5.5% Moderate Tue. February 26 10:00 New Home Sales Jan 385K 369K Moderate Tue. February 26 10:00 Consumer Confidence Feb 62.0 58.6 Moderate Wed. February 27 08:30 Durable Goods Orders Jan -4.0% 4.3% Moderate Wed. February 27 10:00 Pending Home Sales Jan 1.0% -4.3% Moderate Thu. February 28 09:45 Chicago PMI Feb 54.0 55.6 HIGH Thu. February 28 08:30 Gross Domestic Product (GDP) Q4 0.5% -0.1% Moderate Thu. February 28 08:30 Jobless Claims (Initial) 2/23 360K 362K Moderate Fri. March 01 08:30 Personal Income Jan -2.3% 2.6% Moderate Fri. March 01 08:30 Personal Spending Jan 0.2% 0.2% Moderate Fri. March 01 08:30 Personal Consumption Expenditures and Core PCE Jan 0.2% 0.0% HIGH Fri. March 01 08:30 Personal Consumption Expenditures and Core PCE YOY NA 1.4% HIGH Fri. March 01 10:00 ISM Index Feb 52.4 53.1 HIGH Fri. March 01 10:00 Consumer Sentiment Index (UoM) Feb 76.3 76.3 Moderate

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. As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you. Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Success Source, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.

Housing Contines to Recover and Ecomics

In This Issue

Last Week in Review: There was another sign that the housing market continues to recover. Plus, chatter about the Fed. Forecast for the Week: The markets are closed Monday for Presidents' Day, but important housing and inflation news will be released later in the week. View: Thinking less may actually help you get more done. Check out why below.

Last Week in Review

"Ease on down the road." The song from the musical The Wiz could also apply to recent chatter in the markets, regarding whether the Fed will continue to "ease on" with their Bond buying program, known as Quantitative Easing. Read on for details and what they mean for home loan rates. Quantitative Easing is the concept of the Fed becoming a buyer of Treasuries and Bonds to try and stimulate the economy. Oftentimes, the Fed does Quantitative Easing when they are hoping to (1) create inflation and avoid a deflationary economy, (2) lower the unemployment rate, and (3) boost Stock prices. Over the last few months, the Fed has bought large amounts of Mortgage Bonds through their Quantitative Easing program to keep home loan rates (which are tied to Mortgage Bonds) near record lows, and to help strengthen our housing market and economy overall. And the housing market has definitely seen some improvement. Last week, the National Association of Realtors reported that the national median existing single-family home price surged 10% since this time last year to $178,900. The year-over-year increase of 10% was the largest gain since the fourth quarter of 2005. This is one of the big reasons the Fed will likely continue their Quantitative Easing program: The housing market is on the mend and stopping the program could threaten the housing recovery. So what is the bottom line? Stocks continue to do well--at the expense of Bonds and home loan rates. However, the debt crisis continues in Europe: Spain, Italy and Greece remain in contracting economies and now France and Germany have shown negative GDP growth that was even worse than expected. This means that investors will likely continue to see our Bond market as a safe haven for their money, which could ultimately benefit Bonds--and home loan rates, which are tied to Mortgage Bonds--in the process. The biggest take away is that home loan rates remain near historic lows, making now 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.

Forecast for the Week

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Feb 15, 2013) The markets are closed Monday in observance of the Presidents' Day holiday, but look for several important reports later in the week. Housing news hits the wires, with Housing Starts and Building Permits on Wednesday and Existing Home Sales on Thursday. We'll get a double dose of inflation news with Wednesday's wholesale-measuring Producer Price Index, followed by the Consumer Price Index on Thursday. Also on Thursday, Initial Jobless Claims and the Philadelphia Fed Index will be reported. In addition, the minutes from the January meeting of the Federal Open Market Committee will be released on Wednesday at 2:00pm ET. With all the differing opinions of the Fed governors and the chatter about Quantitative Easing, this has 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 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 and home loan rates have been impacted by the rally in Stocks. However, home loan rates remain near record lows and I'll continue to monitor them closely.

The Mortgage Market Guide View...

Rituals of Success How to Get More Done By Thinking Less If you've ever felt like you can't find time to get to your list of important things, you're not alone. New York Times best selling author Tony Schwarz says almost 75 percent of workers around the world feel disengaged at work and that the "more, bigger, faster" mantra is to blame. We are busier than ever, trying to get more done with fewer resources. Schwarz suggests everything we do--whether checking email, exercising, or resisting the temptation to eat an extra cookie--often requires thinking, and thinking takes energy. So, if you want to get more done you must actually think less. In 1911, philosopher A.N. Whitehead wrote: "It is a profoundly erroneous truism that we should cultivate the habit of thinking of what we are doing. The precise opposite is the case. Civilization advances by extending the number of operations we can perform without thinking about them." The answer, according to Schwarz, is to make important things automatic, what he calls a ritual. Rituals are highly specific behaviors performed at a specific time. He reports the five rituals that have made the most difference in his life are: Sticking to a bedtime that ensures he gets at least 8 hours of rest. Working out first thing in the morning, whether he feels like it or not. Starting his workday by doing the most important task first--decided the night before--and working only in 90-minute time blocks with a definite break in between. Writing down his good ideas immediately, so they aren't bouncing around in his mind all day, or worse, forgotten entirely. When upset by someone or something, he ritually asks how he can see the same set of facts in a more hopeful or empowering way. Remember, the less you have to think about your goals as you perform the steps to achieve them, the more likely you are to check them off your list. Economic Calendar for the Week of February 18 - February 22 Date ET Economic Report For Estimate Actual Prior Impact Wed. February 20 08:30 Housing Starts Jan 910K 954K Moderate Wed. February 20 02:00 FOMC Minutes 1/30 NA NA HIGH Wed. February 20 08:30 Core Producer Price Index (PPI) Jan 0.1% 0.1% Moderate Wed. February 20 08:30 Producer Price Index (PPI) Jan 0.3% -0.2% Moderate Wed. February 20 08:30 Building Permits Jan 918K 903K Moderate Thu. February 21 08:30 Jobless Claims (Initial) 2/16 358K 341K Moderate Thu. February 21 08:30 Core Consumer Price Index (CPI) Jan 0.2% 0.1% HIGH Thu. February 21 10:00 Existing Home Sales Jan 4.94M 4.94M Moderate Thu. February 21 10:00 Philadelphia Fed Index Feb 1.5 -5.8 HIGH Thu. February 21 08:30 Consumer Price Index (CPI) Jan 0.1% 0.0% 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. As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you. Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Success Source, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.