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In This Issue
Last Week in Review: Weak economic news continues here at home and abroad, but is that good or bad news for home loan rates?
Forecast for the Week: Look for important reports on inflation, housing, manufacturing, and the labor market.
View: Want to know the key to being remarkable? Be sure to read the tips below.  
Last Week in Review
"You're riding high in April and shot down in May." The lyrics from the old Sinatra tune "That's Life" haven't applied to the economy this year, as it has limped along in April. Read on for the latest news, and how home loan rates were impacted. topimage In housing news, New Home Sales for March met expectations, coming in at 417,000. However, Existing Home Sales were down 0.6 percent and below expectations-and February's numbers were revised lower to 4.95 million units from 4.98 million units. There has not been much of an improvement in the Existing Home Sales numbers of late, but on the bright side they are higher than the 4.48 million mark from March 2012. Gross Domestic Product (the broadest measure of economic activity in the U.S.) rose by 2.5 percent in the first quarter of 2013. However, this number was below the 2.8 percent to 3.2 percent that was expected. While the report showed that consumer spending rose at its fastest pace in two years and that businesses ramped up their inventories, overall this is not a great number. However, it is just the first of three readings and revisions will most likely be forthcoming. Also of note, March orders for Durable Goods (which are products that last for an extended period of time) also came in below expectations. What does this mean for home loan rates? Bonds have benefitted from the string of weak economic reports here at home, as investors typically move their money into safer investments like Bonds during weak economic times. This includes, Mortgage Bonds, to which home loan rates are tied. Bonds and home loan rates have also benefitted from weak economic news overseas, as investors there continue to see our Bonds as a safe haven for their money. In addition, if inflation remains in check and economic data remains weak, this gives the Fed cover to continue its Bond purchase program known as Quantitative Easing-which should also benefit Bonds and home loan rates as a result. The bottom line is that now is a great time to consider a home purchase or refinance, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.
Forecast for the Week
The economic calendar will be busy all week. Plus the Fed meets.
  • The week begins on Monday with Personal Consumption and Expenditures, the Fed's favorite measure of inflation, as well as Personal Income and Personal Spending.
  • In housing news, Pending Home Sales will also be released Monday, followed by Tuesday's Case-Shiller Home Price Index.
  • We'll get a sense of how the consumer is feeling with Tuesday's Consumer Confidence reading for April.
  • Several key manufacturing reports will be released, beginning on Tuesday with the Chicago PMI followed by Wednesday's ISM Index.
  • Weekly Initial Jobless Claims will be reported on Thursday. Last week, jobless claims fell to 339,000 after averaging 362,000 in the previous four weeks.
  • On Friday, we end the week with the often market-moving Jobs Report for April, which includes Non-Farm Payrolls and the Unemployment Rate. ISM Services Index will also be reported.
In addition, the Fed's regularly scheduled two-day meeting of the Federal Open Market Committee begins on Tuesday, with their Policy Statement scheduled for 2:15 p.m. ET on Wednesday. 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 continue to remain near historic best levels. I'll be watching their movement closely.
Chart: Fannie Mae 3.0% Mortgage Bond (Friday Apr 26, 2013)
Japanese Candlestick Chart
The Mortgage Market Guide View...
6 Keys to Being Remarkable "The key to success in any field is, to a large extent, a matter of practicing a specific task for a total of around 10,000 hours." Malcolm Gladwell, Outliers, 2011 "Strenuous individual application is the price paid for distinction; excellence of any sort is placed beyond the reach of indolence." Samuel Smiles, Self-Help, 1859 "We are what we repeatedly do. Excellence, then, is not an act, but a habit." Aristotle, 345 BC The myth that people are born talented is rapidly dispelling. The scientific community is at last catching up with what even Aristotle knew-the difference between success and non-success, outstanding skill and mediocrity, is a matter of dedication and time rather than innate ability. But can the way you practice make a difference? Yes, says Tony Schwartz, author of The Way We're Working Isn't Working, who offers six principles for becoming really good at anything:  
  • Pursue your passion. Passion will keep you motivated better than anything. If you can't be passionate, find something else or you may burn out.
  • Hard work first. Most experts-and experts who study experts-say that practicing first thing in the morning when you have the most energy is best.
  • Practice intensely, but not too long. Working without interruption for short periods of no longer than 90 minutes with short breaks-and not longer than 4.5 hours each day-seems to be the norm for top performers.
  • Get feedback in small doses. Too much advice too frequently can impede learning and make you gun shy.
  • Refresh regularly. All work and no play... stinks. And it won't help you in the long run. Plus, if it's breakthroughs you want, rest is the best thing for activating your creative, right-hemisphere.
  • Ritualize practice. Time-blocking your practice ensures you don't have to expend any energy thinking about when you'll work.
Please feel free to pass these tips along to any clients and colleagues who may benefit! Economic Calendar for the Week of April 29 - May 03 calendar_001

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