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This week and last Update Ricky Khamis

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Ricky Khamis
President Team Growth
Amerifirst Financial, Inc
Phone: 480-359-7908
Fax: (480) 907-1451
License: NMLS173141
ricky@ApprovingAZ.com
www.ApprovingAZ.com
  In This Issue 
     
 

Last Week in Review: Key inflation data was released, while negotiations began regarding the "Fiscal Cliff."

Forecast for the Week: Look for important housing reports and news on consumer sentiment before the markets close Thursday for the Thanksgiving holiday.

View: Want to improve your business and help people in the process? See the great tips below.

 
     
  Last Week in Review 
     
 

Talk is cheap. And while it is important that negotiations are beginning between President Obama and Congressional leaders regarding the looming "Fiscal Cliff" our country is facing, action is needed as well. Read on to learn more details, and what all of this means for home loan rates.

If you've been wondering what the Fiscal Cliff is about, here are the main issues. As we head into 2013, tax cuts for individuals and various tax breaks for businesses are due to expire, taxes pertaining to President Obama's health care law will begin, spending cuts enacted by Congress as part of the debt ceiling deal of 2011 will go into effect, and long-term jobless benefits will expire.

The Congressional Budget Office (CBO) estimates that if all of these items occur, it could take an estimated $600 billion out of the U.S. economy in 2013, pushing the country into a recession. Given that Europe is officially in a recession for the second time in four years, it's especially important that our leaders take action now before our economy follows suit.

Heading into 2013, another important issue to monitor is inflation. Remember that one of the goals of the Fed's latest round of Bond buying (known as Quantitative Easing or QE3) is actually to create inflation. While the latest Producer Price Index and Consumer Price Index reports showed that inflation remained tame at the wholesale and consumer levels in October, inflation can manifest and get out of hand quickly. This is significant because inflation is the arch enemy of Bonds (and therefore home loan rates, which are tied Mortgage Bonds) as it reduces the value of fixed investments like Bonds.

So what does this mean for home loan rates? Bonds and home loan rates should continue to benefit from the continued uncertainty in Europe, and the uncertainty here regarding the Fiscal Cliff, as investors will likely continue to see our Bond market as a safe haven for their money. But inflation is a very real threat to home loan rates, and we need to keep a close eye on it in the weeks and months ahead.

The bottom line is that home loan rates remain near historic lows, making now a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

 
     
  Forecast for the Week 
     
 

Several important reports will be released the first half of the week, before the capital markets close on Thursday for the Thanksgiving holiday.

  • We'll get a triple dose of housing information with the Existing Home Sales Report on Monday andHousing Starts/Building Permits on Tuesday.
  • Weekly Initial Jobless Claims will be reported on Wednesday this week due to the holiday on Thursday. The data comes after last week's surging numbers due to the effects from Superstorm Sandy.
  • Also on Wednesday, Consumer Sentiment will be released.

In addition, Friday will mark a short day of trading, as the Bond markets will be open until 2:00pm ET while Stocks will close for trading at 1:00pm ET.

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 remain near record best levels. I'll be watching closely to see what happens as we head into the holiday season. And speaking of holidays, wishing you and your family a safe and happy Thanksgiving.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Nov 16, 2012)
Japanese Candlestick Chart
 
     
  The Mortgage Market Guide View... 
     
 
     
 

3 Mindset Fixes (And A Script) For More Effective Networking

If you're not meeting enough of the right people or getting as much referral business from your networking as you should then Scott Gerber, founder of the Young Entrepreneurs Council, has some solid mindset fixes for young entrepreneurs and entrepreneurs young at heart:

Don't jump the gun. Doing things for others before you start doing things for yourself is the first step to a stronger networking position. Don't look at your contacts as means to an end-look at them as people with desires. People can sense when you only want to use them to get business just for yourself. But getting to know them, finding out their goals, plans, and dreams not only makes you appear more caring but arms you with intelligence to help make their life or business more successful.

Figure out your specialty. You can't be Master of Everything in your industry and you'd be foolish to try. In every industry specialists are usually at the top; there are those who specialize in market niches, client types, family situations, and even parts of anatomy. When you specialize, you have an incredible power over prospects-access! You become the gateway, the access, to a solution. In most cases, specialists make more money and have less trouble getting new business than their generalist counterparts.

Plan to create value. The formula here is: Meet, Connect, Repeat. Whenever you attend a networking event, go with the intention of connecting at least one person with something they want: it could be a solution, it could be a relationship, it could be anything you can help make possible. Repeat this plan each event you attend. It's easy to do.

Have a great script ready. When you meet someone for the first time just ask: "Who are the two or three people you'd like to meet that can help you in your business?" Then, all you have to do is start connecting the dots. Being known as a connector for others will soon reward you with new contacts and new business from places you never dreamed possible. It's easy to treat networking events like social occasions, but if you arrive with the intention of being a connector, you'll be more productive and enjoy yourself even more.

Share these tips with the other professionals in your network and feel free to call if I can help connect you to someone you need to know!

Economic Calendar for the Week of November 19 - November 23

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. November 19
10:00
Existing Home Sales
Oct
NA
 
4.75M
Moderate
Tue. November 20
10:00
Housing Starts
Oct
NA
 
872K
Moderate
Tue. November 20
10:00
Building Permits
Oct
NA
 
894K
Moderate
Wed. November 21
08:30
Jobless Claims (Initial)
11/17
NA
 
NA
Moderate
Wed. November 21
10:00
Consumer Sentiment Index (UoM)
Nov
NA
 
84.9
Moderate
     

 

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. 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, there is no guarantee it is without errors.

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

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.

 

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Ricky Khamis
NMLS 173141 | LO-0911814 | CA-DOC173141
Branch Manager | Corporate Office
Arizona and California CE Instructor

Email: Rick@amerifirst.us

480-344-1900 office
602-758-7425 mobile
480-339-1615 fax

AMERIFIRST FINANCIAL, INC.
NMLS 145368 

1550 E. McKellips Rd, Suite 117
Mesa, AZ 85203
480-344-1900
1-866-276-12974
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Amerifirst Financial Disclosure-  The opinions expressed here are the personal opinions of Ricky Khamis.  Content published here is not read or approved by Amerifirst Financial before it is posted and does not necessarily  represent the views and opinions of Amerifirst Financial.

Comment balloon 0 commentsRicky Khamis • November 19 2012 07:35AM

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