MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

MMG Weekly / Vantage Production.blueForecast for the Week

The final reading of fourth quarter Gross Domestic Product will close the book on economic growth in 2016.
  • Existing Home Sales will be released on Tuesday followed by New Home Sales on Thursday.
  • Also on Thursday, look for the usual weekly Initial Jobless Claims.
  • On Friday, the final reading for fourth quarter 2016 Gross Domestic Product, Durable Goods Orders and the Consumer Sentiment Index will be delivered.
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 have not had a good run recently. Despite this, home loan rates are still in attractive territory.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday January 20, 2017)

Japanese Candlestick Chart

The Mortgage Market Guide View…

Airlines Offering New Levels of Service
Consider new stripped-down and souped-up options in a tiered approach to economy class.
By Miriam Cross, Kiplinger.com

Travelers don’t expect much from flying coach, except a bargain fare and a free snack. But now American Airlines, Delta and United are dividing economy class into tiers that may be more enticing than traditional coach.

On the low end of the spectrum, the basic economy class of United and Delta eliminates seat selection, early boarding and the ability to change your itinerary. United’s bare-bones service even restricts your carry-on to a small, personal item, such as a shoulder bag or backpack that fits under the seat. Still, Delta’s and United’s basic economy flights are better deals than similarly priced flights on Spirit and Frontier in terms of comfort and reliability, says airline research scientist Peter Belobaba at MIT.

On the upper end, American and Delta have gone plush with premium economy. Don’t confuse this level with existing upgrades, such as United Economy Plus, which usually include the first few rows of the economy-class section, with extra legroom and quicker access on and off the plane. Rather, premium economy offers a separate cabin on long-haul international routes that bridges the gap to business class, offering more room and comfier seats; amenity kits that include toiletries and other items; and finer food and drink.

Should you pay more (or less) for a revised version of economy? A basic economy ticket may seem like less of a bargain once you factor in the perks you’ll lose. Premium economy seats could cost you 10% to 85% more than traditional economy, according to SeatGuru.com. If you are not sure whether it’s worth paying up, use the site’s comparison charts and the airline’s website to decide whether a wider, reclining seat and, say, an eye mask and socks are worth the price.

Reprinted with permission. All Contents © 2017 The Kiplinger Washington Editors. Kiplinger.com.

Economic Calendar for the Week of January 23 – January 27

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. January 24
10:00
Existing Home Sales
Dec
NA
5.61M
Moderate
Thu. January 26
08:30
Jobless Claims (Initial)
1/21
NA
NA
Moderate
Thu. January 26
10:00
New Home Sales
Dec
NA
592K
Moderate
Fri. January 27
08:30
Gross Domestic Product (GDP)
Q4
NA
3.5%
Moderate
Fri. January 27
08:30
GDP Chain Deflator
Q4
NA
1.4%
Moderate
Fri. January 27
08:30
Durable Goods Orders
Dec
NA
-4.6%
Moderate
Fri. January 27
10:00
Consumer Sentiment Index (UoM)
Jan
NA
98.1
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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