Mountain Equity Mortgage, Inc.




Knowledge is Power – Action Makes The Difference!



Rene’ Kneller – nmls 246709, crmlo 10009309

Jeff Kneller

Telephone: 970.513.0934  —  Facsimile: 970.513.0936


  Economic Commentary

November 25, 2013


The markets would sure love a clear sign regarding when the Fed may taper its Bond purchase program known as Quantitative Easing.

Remember that the Fed has been purchasing $85 billion in Bonds and Treasuries each month to stimulate the economy and housing market. This includes Mortgage Bonds, to which home loan rates are tied. Last week, the minutes from the Fed’s October meeting of the Federal Open Market Committee revealed that members did discuss tapering these purchases–but there was no clear sign when tapering would begin. This led to a volatile Wednesday, causing both Stocks and Bonds to worsen immediately after the minutes were released.

In housing news to note, Existing Home Sales for October fell by 3.2 percent due to a rise in home loan rates and housing prices. This was the second month of declines, as there were 5.12 million units sold annualized, below the 5.20 million expected. In addition, the National Association of Home Builders reported that its Housing Market Index fell to the lowest level since June, but the figure does remain in positive territory. Meanwhile, Retail Sales rose more than expected in October, as the decline in gas prices gave consumers extra money to spend, while both consumer and wholesale inflation remain tame.

What does this mean for home loan rates? The housing sector has been on an improving streak, but as the reports above show, these improvements could be hindered if home loan rates continue to rise. One thing is clear: The Fed has said that economic reports will be a key factor regarding when it begins to taper its Bond purchases. But whether this will happen before or after the new year remains to be seen.

The bottom line is that home loan rates remain attractive compared to historical levels, and now remains 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.


Rate Review

In Freddie Mac Primary Mortgage Mkt Survey (for the week ending November 22nd) in which the 30-yr fixed-rate mortgage (FRM) avg. 4.22%.

The 15-year FRM this week avg 3.27%.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) avg 2.95%.

The one-year Treasury-indexed ARM avg 2.61%.


  Economic Releases

November 25, 2013




Pending Home Sales – Impact (Moderate)  



Consumer Confidence – Impact (Moderate)

Building Permits – Impact (Moderate)

Building Starts – Impact (Moderate)

S&P/CaseShiller Home Price Index-Impact (Moderate)





Chicago PMI – Impact (Moderate)

Durable Goods Orders – Impact (Moderate)

Consumer Sentiment Index– Impact (Moderate)

Jobless Claims – Impact (Moderate)




No Primary Economic Indicator Releases Scheduled





No Primary Economic Indicator Releases Scheduled




Industry Essentials                          

For the Real Estate Professional

November 25, 2013



The upcoming week’s economic data is crammed into three trading days, given the Thanksgiving Holiday.

  • Housing data is plentiful this week and kicks off on Monday with Pending Home Sales. Tuesday brings the S&P/Case-Shiller Home Price Index, as well as September and October data for Housing Starts and Building Permits. September’s Housing Starts and Building Permits were never reported due to the government shutdown.
  • Tuesday also brings a read on Consumer Confidence, with the Consumer Sentiment Index following on Wednesday.
  • Also on Wednesday, look for Weekly Initial Jobless Claims, Durable Goods Orders, and news from the manufacturing sector with Chicago PMI.

All capital markets will be closed on Thursday in observance of Thanksgiving. The Bond markets will be open on Friday and will close at 2:00 p.m. ET, while Stocks are also open and will close at 1:00p.m. 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. 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.

It was a volatile week for Bonds as the Fed minutes renewed talk of tapering the Fed’s Bond purchase program. I’ll be watching the markets closely in the coming weeks as more discussion on this topic is sure to continue.

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