MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

MMG Weekly / Vantage Production.blueForecast for the Week

Housing news, consumer attitudes and personal spending are plentiful.
  • Housing data kicks off on Tuesday with the S&P/Case-Shiller Home Price Index and Existing Home Sales, followed by New Home Sales on Wednesday.
  • Consumer Confidence will be released on Tuesday, while the Consumer Sentiment Index is coming on Friday.
  • Durable Goods Orders join weekly Initial Jobless Claims on Thursday.
  • Friday brings the second read on fourth quarter 2015 Gross Domestic Product, along with Personal Income, Personal Spending and the Fed’s favorite inflation gauge, Personal Consumption Expenditures.
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. When Bond prices 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, Mortgage Bonds rallied recently, keeping home loan rates in historic territory.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday February 19, 2016)

Japanese Candlestick Chart

The Mortgage Market Guide View…

New Mileage Rates From IRS

If you drive a car, truck or van for work, you’ll want to know the standard mileage rates the IRS has set for 2016. These rates are used to calculate deductible costs for driving an automobile for business, medical and moving purposes, as well as driving for charitable purposes.

As of January 1, 2016, the standard mileage rates for the use of automobiles (including cars, vans, pickups and panel trucks) are calculated at:

  • Business: 54 cents per mile (down from 57.5 cents for 2015)
  • Medical or moving: 19 cents per mile (down from 23 cents for 2015)
  • Charitable organizations: 14 cents per mile

A few of the rates have decreased since last year. According to the IRS, rates are based on an annual study of the fixed and variable costs of operating an automobile. Recent dramatic drops in fuel prices have lead to the decreases.

Before you calculate your deduction, make sure you qualify. Taxpayers cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.

Other requirements for calculating the amount of deductible business, moving, medical or charitable expense can be found in this IRS publication.

The IRS provides the standard mileage rate for ease and convenience only. If you prefer, you may calculate the actual costs of using your vehicle instead of using the standard mileage rates. Check to see which saves you the most!

Please feel free to pass these helpful tips along to your team, clients and colleagues.
Source: IRS.gov

Economic Calendar for the Week of February 22 – February 26

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. February 23
09:00
S&P/Case-Shiller Home Price Index
Dec
NA
5.8%
Moderate
Tue. February 23
10:00
Consumer Confidence
Feb
NA
98.1
Moderate
Tue. February 23
10:00
Existing Home Sales
Jan
NA
5.46M
Moderate
Wed. February 24
10:00
New Home Sales
Jan
NA
544K
Moderate
Thu. February 25
08:30
Jobless Claims (Initial)
2/20
NA
NA
Moderate
Thu. February 25
08:30
Durable Goods Orders
Jan
NA
-5.0%
Moderate
Fri. February 26
08:30
Personal Consumption Expenditures and Core PCE
YOY
NA
1.4%
HIGH
Fri. February 26
08:30
Personal Consumption Expenditures and Core PCE
Jan
NA
0.0%
HIGH
Fri. February 26
08:30
Personal Spending
Jan
NA
0.0%
Moderate
Fri. February 26
08:30
Personal Income
Jan
NA
0.3%
Moderate
Fri. February 26
08:30
GDP Chain Deflator
Q4
NA
0.8%
Moderate
Fri. February 26
08:30
Gross Domestic Product (GDP)
Q4
NA
0.7%
Moderate
Fri. February 26
10:30
Consumer Sentiment Index (UoM)
Feb
NA
92.0
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. 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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