Mortgage News Weekly 10/28/19

In This Issue…

Last Week in Review: The Remedy for Higher Rates

Forecast for the Week: A Week to Follow

View: Accounting Tips to Help You Stay Within a Budget

Last Week in Review:

The Remedy for Higher Rates

This past week home loan rates were essentially unchanged from the previous week, breaking a trend of higher rates since the beginning of October.

Bonds hate good news and there is still plenty to go around:

U.S./China trade dispute progress
Brexit progress
Corporate earnings remain positive, as does the economic outlook
Fed rate cut coming — more on that below

If the week was filled with good news, then why did Bonds and home loan rates remain steady?

There’s an old saying, “the cure for higher rates, is higher rates”, meaning that the recent uptick in rates was enough to attract investors searching for higher yield to buy Bonds, thereby halting the increase in rates.

Before we start celebrating and thinking we are on the road to lower rates in the days ahead, the Bond market must deal with a jam-packed week of news next week. The headline risk can easily cause the recent increase in rates to resume.

Bottom line: home loan rates remain near three-year lows, but up a bit from where they were at the beginning of October. As we head into a very important news week, if you are considering a home loan now is a terrific time to seize the opportunity before it goes away.

If you or someone you know has questions about home loans, give me a call. I’d be happy to help.

Forecast for the Week:

A Week to Follow

After a week of few economic reports, the upcoming week is filled with big headline risk events with the Jobs Report, ADP, and the Fed’s favorite inflation gauge, the Core PCE. In addition, quarterly earnings will continue, which have been positive so far this season.

But the big headlines will come from the two-day Federal Open Market Committee (Fed) meeting that kicks off on Tuesday and ends Wednesday with the Monetary Policy Statement release at 2:00 p.m. ET. The Fed is expected to cut the short-term Fed Funds Rate (FFR) by 0.25% to lower it to 1.75%. Fed Chair Powell will hold a press conference immediately following the statement

Reminder: Fed rate cuts do not equal lower mortgage rates. A Fed rate cut or hike impacts borrowing costs for auto and student loans, credit cards, and other short-term borrowing vehicles. Long-term rates such as mortgages are impacted by the ebb and flow of Mortgage Bond pricing, economic growth, and inflation.

It’s important to remember that since the first rate cut at the end of July, mortgage rates have stopped improving and have actually increased since the beginning of September — according to Freddie Mac and the Mortgage Bankers Association — before leveling off last week.

Reports to watch:

Housing data will be seen from Tuesday’s Pending Home Sales and the S&P Case-Shiller Home Price Index, along with the closely watched Consumer Confidence Index.
ADP Private Payrolls will be delivered on Wednesday.
On Thursday, Weekly Initial Jobless Claims, Personal Income and Spending, Chicago PMI, and the inflation readings Employment Cost Index and Core PCE will be released.
Friday brings the government’s Jobs Report which includes Non-Farm Payrolls, the Unemployment Rate, and Hourly Earnings.

The Mortgage Market Guide View…

Accounting Tips to Help You Stay Within a Budget

It is important to know the basics of accounting, whether it’s for your personal finances or for your small business. Even if you use a computer program, you need to know some basic principles, so you know which information to enter.

Single-entry bookkeeping is the most basic form of accounting. With this type of bookkeeping, you can just record any transactions you make, whether you are depositing or spending money. This type of accounting works for small businesses and personal finances with a low number of transactions.

Larger businesses need to use double-entry accounting. In this case, you make two entries for every transaction. Every account has two columns, and each transaction takes place in two accounts. You record a debit into one account, and a credit into another account.

When you use a checkbook, you need to make sure you keep it balanced. This means that you should subtract all the checks, payments, and withdrawals, including bank fees, from your deposits. When you get your bank statement, check it against your own accounting to make sure that everything matches. If a check hasn’t cleared the bank yet, the bank account will still have the money in it, but you need to subtract it from your own books, so you don’t spend the money.

Once you know the basics of accounting, you can simplify the whole process by using a computer program.

Use these basic accounting skills to determine how much you have and how much you spend, so you don’t go over budget or overdraw.

Source: The Balance Small Business

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