MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

MMG Weekly

Forecast for the Week 

A full week of economic reports is ahead, with news on manufacturing, housing, inflation, and more.

  • In manufacturing news, the Empire State Index will be released on Monday with the Philadelphia Fed Index being delivered on Thursday.
  • Housing data will fill the airwaves this week with Housing Starts and Building Permits on Wednesday and Existing Homes Sales on Thursday.
  • Weekly Initial Jobless Claims will be released as usual on Thursday. The numbers have been ticking down as the impact of Hurricane Sandy has subsided.
  • Also on Thursday, look for the Gross Domestic Product Report. It will be interesting to see if the third reading for the third Quarter of 2012 will remain at 2.7% or if the figure will be revised lower.
  • Friday’s data includes the inflation-measuring Core Personal Consumption Expenditures. Inflation has been tame and the Fed believes this will be the case for the foreseeable future.
  • Rounding out the data on Friday, Personal Income and Spending will be released along with Consumer Sentiment.

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, despite the tame inflation news, Bonds and home loan rates worsened slightly due to added selling supply in the markets and an improvement in Stock prices. However, Bonds and home loan rates remain near record best levels and I will continue to monitor them closely.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Dec 14, 2012)

Japanese Candlestick Chart
The Mortgage Market Guide View… 

The Incredible Credibility Script
We all know that people follow the lead of credible and knowledgeable experts. It’s why professionals put diplomas on their wall, car commercials mention their awards, and testimonials appear in advertising. If you go around tooting your own horn to new prospects, however, you can wear out your welcome fast.


Dr. Robert Cialdini, Professor Emeritus of Psychology and Marketing at Arizona State University and author of the bestselling business book Influence: The Psychology of Persuasion, discovered if someone else “toots your horn,” even if they don’t have any expertise themselves-and even if they have a financial interest in making the recommendation-prospects are favorably influenced regardless.


Here’s a simple strategy you can employ. Whenever a call comes in requesting a particular service, have your receptionist briefly mention your qualification or expertise before transferring the call. Even something as simple as, “Let me transfer you to Bob, he has 20 years of experience in that area,” can make a difference to potential clients. According to Cialdini’s research, one company used that very script and they saw a surprising 20% rise in the number of appointments and a 15% rise in signed contracts. Not a bad return on investment!


While it’s important to explain why you’re a credible authority, it doesn’t always have to come from you. Try this technique out for yourself, and then share it with other professionals in your referral network.

Economic Calendar for the Week of December 17 – December 21

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. December 17
08:30
Empire State Index
Dec
NA
-5.2
HIGH
Wed. December 19
08:30
Housing Starts
Nov
NA
894K
Moderate
Wed. December 19
08:30
Building Permits
Nov
NA
866K
Moderate
Thu. December 20
08:30
Jobless Claims (Initial)
12/15
NA
NA
Moderate
Thu. December 20
08:30
Gross Domestic Product (GDP)
Q3
NA
2.7%
Moderate
Thu. December 20
08:30
GDP Chain Deflator
Q3
NA
2.7%
Moderate
Thu. December 20
10:00
Philadelphia Fed Index
Dec
NA
-10.7
HIGH
Thu. December 20
10:00
Existing Home Sales
Nov
NA
4.79M
Moderate
Fri. December 21
08:30
Personal Income
Nov
NA
0.0%
Moderate
Fri. December 21
08:30
Personal Spending
Nov
NA
-0.2%
Moderate
Fri. December 21
08:30
Personal Consumption Expenditures and Core PCE
Nov
NA
0.1%
HIGH
Fri. December 21
08:30
Personal Consumption Expenditures and Core PCE
Nov
NA
1.6%
HIGH
Fri. December 21
08:30
Consumer Sentiment Index (UoM)
Dec
NA
74.5
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.

Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. Mortgage Market Guide, 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.

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