Consumer Sentiment Increases Again:

Consumer Sentiment Increased for the Third Straight Month

Confidence among U.S. consumers rose more than projected in November, offering additional support to the biggest part of the economy.  It was the third straight month of increases in consumer sentiment.

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment climbed to 64.2 this month, the highest since June, from 60.9 in October. The median estimate of economists surveyed by Bloomberg News called for a reading of 61.5.

U.S. consumers are entering the holiday shopping season with a more optimistic outlook than they had a month ago, largely because of a recent decline in gas prices, according to the widely watched index.

Consumer Sentiment is very key to the housing industry.  As consumers feel more confident in their expectations about the economy, they are more likely to finally make the move to purchase their next home.

What Happened to Rates Last Week:

Mortgage backed securities (MBS) lost -54 basis points from last Friday to the prior Friday which moved mortgage rates higher. As we have reported for the past several weeks, bonds have been trading in reaction to what has been going on in Europe and have largely ignored the U.S economic data. Last week certainly followed that trend.  Bonds (which include mortgage backed securities) sold off (causing rates to rise) as Greece appointed a new Prime Minister and on news reports that the Italian Prime Minister would step down.  This helped to remove some uncertainty from the market place and investors removed some funds from the safe-haven of bonds. On the domestic front, we had a luke-warm 30 year U.S. Treasury auction and Initial Jobless Claims and Consumer Sentiment were much better than expected. These also pressured MBS lower.

What to Watch Out For This Week:


The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:

Date	Economic Release
15-Nov	NY Empire State Manufacturing Idx
15-Nov	Producer Price Index (MoM)
15-Nov	Prod Price Index (YoY)
15-Nov	Prod Price Index ex (MoM)
15-Nov	Prod Price Index ex (YoY)
15-Nov	Retail Sales (MoM)
15-Nov	Retail Sales ex Autos (MoM)
15-Nov	Business Inventories
16-Nov	MBA Mortgage Applications
16-Nov	Consumer Price Index (MoM)
16-Nov	Consumer Price Index (YoY)
16-Nov	Cons Pr Idx Ex (MoM)
16-Nov	Co Price Index Ex (YoY)
16-Nov	Net Long-Term TIC Flows
16-Nov	Total Net TIC Flows
16-Nov	Capacity Utilization
16-Nov	Industrial Production (MoM)
16-Nov	NAHB Housing Market Index
16-Nov	EIA Crude Oil Stocks change
17-Nov	Building Permits (MoM)
17-Nov	Continuing Jobless Claims
17-Nov	Housing Starts (MoM)
17-Nov	Initial Jobless Claims
17-Nov	Ph Fed Manufacturing Survey
18-Nov	Leading Indicators (MoM)

 

 

 

 

 

 

 

 

 

 

 

 

 

Housing Market Update: Consumer Confidence Rises

Confidence among U.S. consumers rose in September from the lowest level since November 2008 as Americans’ views of current economic conditions improved.The Thomson Reuters/University of Michigan preliminary index of consumer sentiment climbed to 57.8 this month from 55.7 in August. The median estimate of economists surveyed by Bloomberg News called for a reading of 57. The group’s measure of consumer expectations six months from now dropped to the lowest level since May 1980.

The Michigan survey’s index of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items like cars, increased to 74.5 from 68.7 the prior month.

This is very important to the housing industry because it it not interest rates but the consumer’s outlook on the economy that drives demand for housing.

What Happened to Rates Last Week:

Mortgage backed securities (MBS) lost -68 basis points last week which helped to move mortgage rates higher from last Friday to the prior Friday.  Mortgage rates were pressured due to some inflationary economic news.  Both the Producer Price Index and the Consumer Price Index showed increases which is inflationary and mortgage rates do not react well to any inflationary data.  We also saw better than expected Consumer Sentiment which is also usually bad for mortgage rates.

The following are the major economic reports that will hit the market this week.  They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.  I will be watching these reports closely for you and let you know if there are any big surprises:

Date	Time	Economic Release
19-Sep	10:00	NAHB Housing Market Index
19-Sep	10:30	Barack Obama Press Conference
20-Sep	8:30	Building Permits (MoM)
20-Sep	8:30	Housing Starts (MoM)
21-Sep	7:00	MBA Mortgage Applications
21-Sep	10:00	Existing Home Sales (MoM)
21-Sep	10:00	Existing Home Sales Change
21-Sep	10:30	EIA Crude Oil Stocks change
21-Sep	14:15	Fed Interest Rate Decision
21-Sep	14:15	Fed’s Press Conference
22-Sep	8:30	Continuing Jobless Claims
22-Sep	8:30	Initial Jobless Claims
22-Sep	10:00	Housing Price Index (MoM)
22-Sep	10:00	Leading Indicators (MoM)

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.