Good Jobs and Housing News and Economic News

In This Issue

Last Week in Review: Surprising jobs news for February, plus more good news on the housing front. Forecast for the Week: Several key reports will be released in the second half of the week, including inflation and retail sales. Plus, will Stocks reach another record? View: Want more attention from your marketplace? Be sure to read the tips below.

Last Week in Review

It's been said that "life is full of surprises." And indeed, last week's Jobs Report contained several surprises. Read on to find out if they were good or bad...and what they meant for home loan rates. The Jobs Report for February showed that 236,000 jobs were created, well above the 165,000 that was expected. In addition, private employers added 246,000 new jobs in February, also well above expectations. While this is good news, it's important to note that job creations in January were revised downward to 119,000 from the previous reading of 157,000. There was more good news in the report: the Unemployment Rate fell to 7.7% from 7.9%, a four-year low. However, the downtick in the unemployment rate was due to more people leaving the labor force. And the Labor Force Participation Rate (LFPR) continues to decrease, coming in at its lowest level since September 1981. The LFPR calculation is quite simple. If you are 16 years old and not in the military, then you either have a job or you don't. The ratio of people "participating" or working is then compared to the total population. All in all, the Jobs Report showed that the labor market is slowly improving. And there was more evidence that the housing market continues to improve. Research firm CoreLogic reported that home prices rose 0.7% from December to January and surged nearly 10% compared to a year ago. The 10% increase was the largest yearly increase since April 2006 and was the eleventh monthly increase in a row. Though not all the economic news was rosy: Worker Productivity in the 4th quarter of 2012 slowed to its slowest pace in four years. This coincides with the slow growth that was recently reported in the Gross Domestic Product reading for the same period. What does all of this mean for home loan rates? The good economic news has caused investors to move money out of Bonds and into riskier assets like Stocks, to try to take advantage of gains. As a result, Stocks reached record highs last week, at the expense of Bonds. However, the Fed continues purchasing $85 billion in Bonds every month as part of their Bond purchase program known as Quantitative Easing. Plus, there is also continued uncertainty out of Europe, meaning some investors will likely continue their safe haven trade into our Bond Market. Overall, this should help keep Mortgage Bonds--and therefore home loan rates, which are tied to Mortgage Bonds--near record best levels. The bottom line 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 Mar 08, 2013) The second half of the week heats up with several key reports. Economic reports kick off on Wednesday with Retail Sales. As usual, Thursday brings Weekly Initial Jobless Claims, as well as the wholesale-measuring Producer Price Index, the first of the week's inflation reports. There's more inflation news on Friday with the Consumer Price Index. Also look for Empire Manufacturing and Consumer Sentiment to conclude the week. 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 worsened last week as Stocks hit record highs. But Bonds and home loan rates remain near record best levels and I will continue to watch their movement closely.

The Mortgage Market Guide View...

New Report Says Blogs More Influential than Facebook, Twitter Have you been wondering how to get more attention from your marketplace? Are you trying to find new ways to bring in more business? Well, if you haven't already started blogging, you may want to give it another look. Technorati Media, one of the largest social media ad networks, recently released their 2013 Digital Influence Report--a survey including over 6,000 influencers, 1,200 consumers and 150 other top marketers--revealing when it comes to making purchase decisions, blogs are the third most influential resource (31 percent!), second only to retail and brand sites. The survey participants said blogs rank higher than Twitter for shaping their opinions and higher than Facebook for motivating purchasing decisions. The reason? Bloggers tend to be more honest with their opinions and are perceived as less self-serving than other sources. Here are four ways to be influential with your online community: Be honest. People turn to blogs because they want honest opinions and professional advice. Don't be afraid to be yourself or use some personality both with your topics and your writing style. Focus on providing value. Building strong relationships with your followers is easy when you provide great value for them. Relationships are really a by-product of providing great content and a sense of community. Be the go-to. Becoming a local guru is neither difficult nor undesirable. If you can establish yourself as a trusted source of information, people will follow you for your specific advice...and so will the business. Get synergy. Don't ignore Facebook or Twitter, but don't rely on them for the full job. When you provide compelling content on your blog, use social media to amplify the content. The key to influencing your customers on Facebook is to share things that generate likes, comments, and interaction. Blog posts are a great way to do just that! Economic Calendar for the Week of March 11 - March 15 Date ET Economic Report For Estimate Actual Prior Impact Wed. March 13 08:30 Retail Sales Feb NA 0.1% HIGH Wed. March 13 08:30 Retail Sales ex-auto Feb NA 0.2% HIGH Thu. March 14 08:30 Jobless Claims (Initial) 3/09 NA NA Moderate Thu. March 14 08:30 Producer Price Index (PPI) Feb NA 0.2% Moderate Thu. March 14 08:30 Core Producer Price Index (PPI) Feb NA 0.2% Moderate Fri. March 15 08:30 Consumer Price Index (CPI) Feb NA 0.0% HIGH Fri. March 15 08:30 Core Consumer Price Index (CPI) Feb NA 0.3% HIGH Fri. March 15 08:30 Empire State Index Mar NA 10.0 Moderate Fri. March 15 10:00 Consumer Sentiment Index (UoM) Mar NA 77.6 Moderate

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