MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

MMG Weekly / Vantage Production.blueForecast for the Week

This week’s data covers manufacturing, inflation and housing—three key areas the Fed considers when discussing the strength of the U.S. economy. In addition, minutes from the Fed’s October meeting will be released.
  • Manufacturing data opens and closes the week with the Empire State Index on Monday followed by the Philadelphia Fed Index on Thursday.
  • Consumer inflation will be shared Tuesday in the Consumer Price Index.
  • Housing data will be plentiful with Tuesday’s Housing Market Index and Wednesday’s Housing Starts and Building Permits data.
  • October FOMC Meeting Minutes will be released Wednesday as well.
  • Weekly Initial Jobless Claims will be released on Thursday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

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 are 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, reactions to recent economic news drove Mortgage Bonds lower. They have since stabilized.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday November 13, 2015)

Japanese Candlestick Chart

The Mortgage Market Guide View…

Getting Out of a Car Lease

Car leases offer advantages for busy business people. Lease payments are typically lower than car loans, they often require lower or no down payments and most major repairs will be covered under warranty. Plus, if you like that new car smell, you can get a brand new vehicle every few years when you turn in your lease for a new one.

Being tied to a lease, however, can turn into a burden if business takes a downturn or you have an opportunity for more favorable transportation. Simply turning the car in and walking away from the lease could negatively affect your credit score. Here are some other options:
  1. Early termination is the most costly choice. Aside from paying off the balance on the lease and losing the car, penalty fees can add up.
  2. Selling the car privately requires a lot of legwork but can benefit you if the car has retained enough value compared to the cost of buying out the lease.
  3. Lease transfer is the simplest and most cost effective way to exit a lease, but it’s not very well known. The process is just as it sounds: your lease is transferred to another credit-worthy driver willing to assume it.

Lease transfers are complicated, and that’s why you should rely on a service such as LeaseTrader or Swapalease where the process has been streamlined. These companies help broker between buyers and sellers, host listings and offer assistance and information to expedite the process.

Of course, there are fees associated with transferring a car lease, but the costs can have far less of an impact on your wallet—not to mention your credit—than terminating your lease early.

Feel free to pass these helpful tips along to your team, clients and colleagues!

Economic Calendar for the Week of November 16 – November 20

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. November 16
08:30
Empire State Index
Nov
NA
-11.4
Moderate
Tue. November 17
08:30
Consumer Price Index (CPI)
Oct
NA
-0.2%
HIGH
Tue. November 17
08:30
Core Consumer Price Index (CPI)
Oct
NA
0.2%
HIGH
Tue. November 17
10:00
Housing Market Index
Nov
NA
64
Moderate
Wed. November 18
08:30
Housing Starts
Oct
NA
1206K
Moderate
Wed. November 18
08:30
Building Permits
Oct
1137K
1103K
Moderate
Wed. November 18
02:00
FOMC Minutes
10/28
NA
NA
HIGH
Thu. November 19
08:30
Jobless Claims (Initial)
11/14
272K
276K
Moderate
Thu. November 19
10:00
Philadelphia Fed Index
Nov
-1.0
-4.5
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.

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. 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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