MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

Forecast for the Week 

Housing and manufacturing news will be front and center in this week’s economic reports:

  • Existing Home Sales and New Home Sales will be released on Wednesday and Thursday, respectively.
  • Initial Jobless Claims will be released on Thursday as usual. Last week’s data came in slightly below expectations, which helped bring the average over the past month to the lowest level since late March. However, the number was still too high, and it remains a stark reminder that the US economy isn’t out of the woods yet.
  • Finally, this week rounds out with manufacturing news in the form of the Durable Goods Orders Report on Friday. Durable Goods Orders are considered a leading indicator of manufacturing activity. So the markets will be watching this report, especially after last week’s Philadelphia Fed Index and Empire State Index readings.

In addition to those economic reports, the Meeting Minutes from the latest Federal Open Market Committee (FOMC) meeting will be released on Tuesday. This report is sure to garner some attention—not only because it kicks off the week’s news, but also because the markets are looking for any insight as to whether the Fed will come through with another round of Quantitative Easing (or QE3).

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 moved away from some of their best levels but they are still near historic lows. I’ll be watching closely to see what happens this week.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Aug 17, 2012)
Japanese Candlestick Chart

The Mortgage Market Guide View… 

Get More Retweets Starting Today

If you use social media sites like Twitter, you know that one of the best ways to spread your message is to create a message that other people will actually spread for you.

The question is: How do you do that?

Chris Sturk of Mequoda recently published a post on the top ways to get more retweets. You can read the entire post for more details, but here are a few important highlights:

  • Use “retweet” rather than “RT”—studies have shown that “retweet” is 23% more likely to work.
  • Don’t use more than three hashtags per tweet—if you use more, your tweets may not be retweeted because they look like spam.
  • Tweet during active times of the day (from 8 am to 7 pm)—be sure to factor in time zones that you’re targeting if you have a national or global strategy.

Those are just three of the tips that Sturk offers, but they’re three tips that can help increase your retweets without completely reworking your social media strategy.

Economic Calendar for the Week of August 20 – August 24

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. August 21
02:00
FOMC Minutes
7/31
Moderate
Wed. August 22
10:00
Existing Home Sales
July
NA
NA
4.37M
Moderate
Thu. August 23
08:30
Jobless Claims (Initial)
8/18
NA
NA
NA
Moderate
Thu. August 23
10:00
New Home Sales
July
NA
NA
350K
Moderate
Fri. August 24
08:30
Durable Goods Orders
July
NA
NA
1.3%
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.
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