Market Commentary for the Week of April 28th

This week brings us the release of eight economic reports that may affect mortgage rates in addition to a two-day FOMC meeting. Three of the week’s reports are considered to be extremely important to the financial and mortgage markets and can cause a great deal of volatility. Throw in the FOMC meeting and we have the makings of a highly important week, not only for mortgage rates but also for the broader financial markets.

There is nothing scheduled for Monday that is likely to move rates. April’s Consumer Confidence Index (CCI) will kick-off the week’s schedule of events at 10:00 AM ET Tuesday. This index is considered to be an indicator of future spending by consumers. The Conference Board surveys 5,000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security and savings, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would keep inflation and economic growth to a minimum. On the other hand, a sizable increase could hurt the bond market, pushing mortgage rates higher Tuesday. It is expected to show a reading of 83.6, which would be an increase from March’s 82.3 reading. The lower the reading, the better the news it is for mortgage rates.

Wednesday has four things taking place that are worth watching. The ADP Employment report is set for release early Wednesday morning, which has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. This report tracks changes in private-sector jobs of the company’s clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that usually follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on this week’s calendar.

Next up is the first of this week’s three key pieces of economic data. That would be the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best measure of economic growth or contraction. I expect this report to cause sizable movement in the financial markets Wednesday and therefore the mortgage market also. Analysts are expecting it to show that the economy grew at an annual rate of 1.0% during the first three months of this year. That would be a much slower pace than the 2.6% pace of the final quarter of last year. A smaller increase or a decline would be considered good news for mortgage rates. But a stronger than expected reading would almost certainly cause stock prices to rise and bond prices to fall, leading to higher mortgage rates Wednesday morning.

Also early Wednesday but not nearly as important is the 1st Quarter Employment Cost Index (ECI). This index tracks employer costs for wages and benefits, giving us a measurement of wage-inflation. If it shows a large increase, we may see wage inflation concerns rise as employers will need to pass those increases into the pricing of their products and services. That would cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing although I doubt this report will affect mortgage rates due to the significance of the GDP data. Current forecasts are showing a rise of 0.5%.

Lastly, this week’s FOMC meeting will begin Tuesday and adjourn Wednesday afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the post-meeting statement. If the statement gives any hint of change in their current forecasts on when they expect to adjust key short-term interest rates, we could see a sizable change to mortgage rates Wednesday afternoon.

March’s Personal Income and Outlays data will be posted early Thursday morning. It helps us measure consumers’ ability to spend and current spending habits. That information is important to the mortgage market due to the influence that consumer spending-related data has on the financial markets. If a consumer’s income is rising, they have the ability to make additional purchases in the near future, fueling economic growth. This raises inflation concerns and has a negative impact on the bond market and mortgage rates. Current forecasts are calling for a 0.4% increase in the income reading and a 0.6% rise in spending. If we see smaller than expected readings, the bond market should open higher Thursday morning.

The Institute for Supply Management (ISM) will post their manufacturing index for April late Thursday morning in the second highly important report of the week. This is usually the first important economic report released each month and gives us an indication of manufacturer sentiment. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. This points toward more manufacturing activity and could hurt bond prices, pushing mortgage rates higher. Analysts are expecting to see a reading of 54.5, up from March’s 53.7. Ideally, bond traders would like to see a reading below 50.0 as it would hint at contraction in the manufacturing sector rather than growth, but a decline from March’s level would be good news for mortgage shoppers.

Friday has the remaining two reports, one of which is the almighty monthly Employment report, giving us April’s employment statistics. This is where we may see a huge rally or major sell-off in the bond market and potentially large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be an increase in the unemployment rate and a much smaller number of payrolls added to the economy during the month than was expected. Just how much of an improvement or worsening in rates depends on how much variance there is between forecasts and actual readings. This could turn out to be a wonderful day in the mortgage market, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for the unemployment rate to slip from 6.7% to 6.6% and that approximately 210,000 jobs were added during the month.

March’s Factory Orders data will close the week’s schedule late Friday morning. This report will give another measurement of manufacturing sector strength or weakness. It is similar to last week’s Durable Goods Orders, except this report includes non-durable goods such as food and clothing. Generally, the market is more concerned with the durable goods orders like refrigerators and electronics than items such as cigarettes and toothpaste. This is why the Durable Goods report usually has more of an impact on the financial markets than the Factory Orders report does. Forecasts are showing a 1.6% increase in new orders. However, the employment data will draw much more attention than this data will, limiting its impact on Friday’s morning rates.

Overall, Friday is the best candidate for most important day of the week although we could see plenty of movement in the markets and mortgage rates several days and at least one afternoon, particularly Wednesday. The calmest day will probably be Monday as investors and market participants prepare for the week’s onslaught of data and Fed news. There is a very good chance of seeing mortgage rates make a significant move one direction or the other, so please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

Mortgage News Roundup - Cities Where Real Estate Investors are Finding Deals

This week, we’ll look at 4 Must-Do’s before buying a home, answer the question if staging really raises a home price, cities where real estate investments are booming, and why renting out your home may help you buy that next house.

Homebuying: 4 Must-Do’s Before You Even Start Shopping

As we’ve mentioned in prior posts, 2014 saw the start of requiring more documentation to obtain a home loan in part to the Frank-Dodd act. Getting a home loan with tighter credit restrictions in today’s home loan market can be more difficult, but it’s a lot easier if you’re prepared financially.

1. File your taxes. You will need to show a lender other documents to verify your income such as a recent paycheck stub . But ultimately, the lender will still want a copy of your federal tax return.
2. Gather your financial documents into one folder. This allows you to find any gaps or holes. To get a “qualified” mortgage under the Dodd-Frank rules, you’ll have to prove you can afford the home with enough assets and show an ability to repay the loan, along with mortgage insurance. This can be more difficult if you own your own business, and will need at least 2 years worth of documentation of income.
3. Check your credit report. As we’ve mentioned before, it can take months to fix incorrect information.
4. Learn what the housing market is like in your area. Getting the home loan may be easier than getting the home due to the tight market. Know what the prices are, and where you want to live.

Does Staging Really Raise a Home’s Price?

In a nutshell, yes, but it’s not as big of a factor as one may think. It’s important to do your research and understand what staging may mean for the price of the house.

A study surveyed 820 homebuyers, walking them through a series of six virtual tours of a single home. Each tour focused on either wall color or furnishings, which are two of the most popular staging elements, according to study co-author Michael Seiler, professor of real estate and finance at the College of William and Mary.

• In one virtual tour, the buyers saw the home without furniture.
• In another virtual tour, they saw the same property, but with “ugly” furniture.
• In yet another virtual tour, they saw the same property, but with “good” furniture.
• The wall color variations included a neutral beige and an “unattractive” purple.

As it turned out, neither wall color nor furnishings made much of an impact on the potential sale price. According to the study, buyers were willing to pay the same price, about $204,000, regardless of how the property was staged.

However, the study found that staging does give buyers a more favorable impression of the home’s livability, something Michael Seiler believes may help the property sell faster. He says the study might not be applicable to all price points and locations.

Cities where real estate investors are finding deals

Investors are draining out of formerly foreclosure-torn cities like Phoenix and Las Vegas, but that doesn’t mean they’re abandoning real estate altogether. Instead they’re relocating to areas with a median home price of $195,000 or less, says RealtyTrac’s Daren Blomquist. But once the buying starts to pick up, don’t expect prices to stay that low.

Real estate investors tend to avoid new homes because they’re looking for wiggle-room in the price, and builders often won’t negotiate. So if you’re looking for a home in the same price range, you may want to look into new homes so you’re not competing with the investors.

When Renting Out Your Home Can Help You Buy a New One

One of the biggest obstacles home buyers will face is being able to show enough income to offset their debts. There is a little-known lending guideline that allows you to show more income. You can turn your current home into a rental property and document regular income with the rent. This increases your income and allows you to be eligible for additional loans.

You will need to show that you have at least 30% equity in your current home before you can turn it into a rental property.

Talk with a reputable mortgage professional to understand how your income, equity, and debt work together and what kind of mortgage on another house you could be eligible for.

Market Commentary for the Week of April 21st

This week has five pieces of economic data for the markets to digest in addition to two potentially relevant Treasury auctions. It will be interesting to see what transpires Monday morning when the markets open after the long weekend. The U.S. markets were closed Friday in observance of the Good Friday holiday and the bond market was in heavy selling mode Thursday. The benchmark 10-year Treasury Note yield spiked from 2.63% at Wednesday’s close to 2.72% at Thursday’s early closing. That led to sizable increases in mortgage rates that could very well carry into trading this week, especially if we get stronger than expected results in the scheduled economic data or noticeable gains in stocks.

The week’s calendar starts late Monday morning when the Conference Board releases their Leading Economic Indicators (LEI) for March. This data attempts to measure economic activity over the next three to six months. This is considered to be only a moderately important report, so at best we can expect to see a slight movement in rates as a result of this data. It is expected to show a 0.8% increase from February’s reading, meaning it is predicting moderate growth in economic activity over the next several months. A decline would be considered good news for the bond market and could lead to slightly lower mortgage rates.

March’s Existing Homes Sales numbers from the National Association of Realtors will be posted at 10:00 AM ET Tuesday. This report gives us an indication of housing sector strength and mortgage credit demand. It is also considered to be moderately important to the markets, but can influence mortgage pricing if it shows a sizable variance from forecasts. Ideally, the bond market would like to see a drop in home resales because a soft housing sector makes broader economic growth more difficult. Analysts are expecting to see little change in sales between February and March. The larger the increase, the worse the news it is for bonds and mortgage rates.

The sister release to that report is March’s New Home Sales late Wednesday morning, but it tracks a much smaller portion of all home sales than Tuesday’s report does. It also gives us an indication of housing sector strength and future mortgage credit demand, however, unless it varies greatly from analysts’ forecasts, I am not expecting the data to cause much movement in mortgage rates. Analysts are currently forecasting an increase in sales of newly constructed homes.

Thursday’s only relevant monthly data is March’s Durable Goods Orders that will be released at 8:30 AM ET. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. These are products that are expected to last three or more years, such as appliances, electronics and airplanes. Current forecasts are calling for an increase in new orders of 2.0%. This would be a sign of manufacturing sector strength, but this data can be quite volatile from month-to-month. Therefore, a small variance between forecasts and the actual results will not heavily influence the markets or mortgage rates. A large decline would be considered good news for bonds and mortgage pricing, while a large rise would indicate strength. A sign of solid manufacturing growth could lead to higher mortgage rates Thursday.

In addition to this week’s economic reports, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5-year Treasury Notes Wednesday and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. On the other hand, strong sales usually make government securities more attractive to investors and bring more funds into bonds. The buying of bonds that follows usually translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during afternoon hours.

The last piece of a data this week will be the University of Michigan’s update to their Index of Consumer Sentiment for April just before 10:00 AM ET Friday. This report gives us an indication of consumer sentiment and their willingness to spend. Current forecasts are calling for little change from the preliminary reading of 82.6. This means that surveyed consumers were just as optimistic about their own financial situations as they were earlier this month. This data is relevant because if consumers feel better about their own financial and employment situations, they are more apt to make a large purchase in the near future, fueling economic growth. I don’t expect this report to have a significant impact on bonds and mortgage pricing unless it shows a noticeable revision.

Overall, look for a fair amount of movement in the financial markets and mortgage rates this week. Of particular interest will be Monday morning as we see if Thursday’s selling extends into this week or if bonds rebound and recover some of those losses. The single most influential economic report will likely be Thursday’s Durable Goods, but look for a surprise in Tuesday’s housing data to cause movement in rates also. This week is another filled with corporate earnings releases, so we need to watch for stock movement to also affect bond trading and mortgage rates. I am still holding the cautious stance towards rates until the 10-year yield gets closer to 2.80%. Since mortgage rates tend to follow bond yields, I recommend at least considering locking an interest rate if still floating and closing in the near future.

Mortgage News Roundup - 4 Easy-to-Follow Tips For Buying A Home This Spring

The peak home buying season started in March, and it was off to a slow start.

DataQuick analyst Andrew LePage said there are a variety of reasons for this year’s slow start.

“The inventory of homes for sale remains thin in many markets. Investor purchases have fallen. The jump in home prices and mortgage rates over the past year has priced some people out of the market, while other would-be buyers struggle with credit hurdles,” LePage said in a statement, “Also, some potential move-up buyers are holding back while they weigh whether to abandon a phenomenally low interest rate on their current mortgage in order to buy a different home.”

But, other industry experts are predicting a brisk recovery.

4 Easy-to-Follow Tips For Buying A Home This Spring

Zillow published an article on Forbes.com about 4 easy-to-follow tips for buying a home this Spring that you may find useful. And has some of the same advice we’ve been recommending for some time.

1. Hire a real estate agent who is experienced in many types of transactions. You deserve to have a professional representing your best interests throughout the entire buying process. A buyer’s agent will help you with your home search, required contractual paperwork, negotiations, inspections, and any other concerns that may come up. Sometimes you can find a team who work together and play off each others strengths.
2. Get pre-approved for a mortgage, and have a solid understanding of your credit score and your financial profile. Talk with a professional mortgage loan officer who will help you see how lenders will view you.
3. Make a checklist of your needs versus your want-to-haves, and prioritize the items on that list. Understand that your list will shift and change based on your budget constraints and market trends. And remember that when you buy a house, you are also buying the neighborhood. Think how long you may want to live in the house, and your goals for the next 5, 10, and 20 years.
4. Bidding wars are on the rise so you need to always lead with your best foot forward. The days of under bidding on a house are over. If you decide to make an offer, make it a good one! (Your real estate agent will be able to help you with this, and come up with a compelling story)

Will you be looking at open houses this weekend?
The peak home buying season started in March, and it was off to a slow start.

DataQuick analyst Andrew LePage said there are a variety of reasons for this year’s slow start.

“The inventory of homes for sale remains thin in many markets. Investor purchases have fallen. The jump in home prices and mortgage rates over the past year has priced some people out of the market, while other would-be buyers struggle with credit hurdles,” LePage said in a statement, “Also, some potential move-up buyers are holding back while they weigh whether to abandon a phenomenally low interest rate on their current mortgage in order to buy a different home.”

But, other industry experts are predicting a brisk

4 Easy-to-Follow Tips For Buying A Home This Spring

Zillow published an article on Forbes.com about 4 easy-to-follow tips for buying a home this Spring that you may find useful. And has some of the same advice we’ve been recommending for some time.

1. Hire a real estate agent who is experienced in many types of transactions. You deserve to have a professional representing your best interests throughout the entire buying process. A buyer’s agent will help you with your home search, required contractual paperwork, negotiations, inspections, and any other concerns that may come up. Sometimes you can find a team who work together and play off each others strengths.
2. Get pre-approved for a mortgage, and have a solid understanding of your credit score and your financial profile. Talk with a professional mortgage loan officer who will help you see how lenders will view you.
3. Make a checklist of your needs versus your want-to-haves, and prioritize the items on that list. Understand that your list will shift and change based on your budget constraints and market trends. And remember that when you buy a house, you are also buying the neighborhood. Think how long you may want to live in the house, and your goals for the next 5, 10, and 20 years.
4. Bidding wars are on the rise so you need to always lead with your best foot forward. The days of under bidding on a house are over. If you decide to make an offer, make it a good one! (Your real estate agent will be able to help you with this, and come up with a compelling story)

Will you be looking at open houses this weekend?

Market Commentary for the Week of April 14th

This week brings us the release of five economic reports that have the potential to affect mortgage rates. We also have round two of corporate earnings releases that can significantly impact the stock markets and help direct funds into or away from bonds. Strong earnings reports should fuel a stock rally that pressures bonds and leads to higher mortgage rates. On the other hand, disappointing earnings news should make bonds more attractive and lead to rate improvements.

The Commerce Department will start this week’s activities with the release of March’s Retail Sales data early Monday morning. This piece of data gives us a measurement of consumer spending levels, which is very important because consumer spending makes up over two-thirds of the U.S. economy. Forecasts are calling for 1.0% increase in sales from February to March. If we see a larger increase in spending, the bond market will likely fall and mortgage rates will rise as it would indicate consumers are spending more than thought, fueling economic growth. However, a weaker than expected level of sales could push bond prices higher and mortgage rates lower Monday.

March’s Consumer Price Index (CPI) is the second report of the week, coming at 8:30 AM ET Tuesday. This index is one of the more important pieces of data the bond market gets each month. It is similar to last week’s PPI but measures inflationary pressures at the consumer level of the economy. If inflation is rapidly rising, bonds become less appealing to investors, leading to bond selling and higher mortgage rates. There are two readings in the index that traders watch- the overall and the core data that excludes more volatile food and energy prices. Analysts are expecting to see a 0.1% rise in the overall readings and a 0.1% increase in the core reading. The core data is the more important reading, which ideally would show a decline in prices at the consumer level, keeping inflation concerns subdued.

Wednesday has three pieces of economic data worth watching. The first of the day is March’s Housing Starts report that tracks groundbreakings of new home construction. It gives us a measurement of housing sector strength and future demand for mortgage credit. It is not considered to be highly important to the markets but does draw enough attention to influence trading if it reveals surprisingly strong or weak numbers. The report will be posted at 8:30 AM ET and is expected to show an increase in starts from February to March. Good news for mortgage rates would be a decline in starts that points toward housing sector weakness.

The second report Wednesday will be March’s Industrial Production data at 9:15 AM ET. It tracks output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Current forecasts are calling for an increase in production of 0.5%. This data is considered to be only moderately important to rates, so it will take more than just a slight variance to influence bond trading and mortgage pricing. Signs of manufacturing sector strength are considered negative news for mortgage rates, so a decline in output would be favorable news for the bond market and mortgage shoppers.

Also Wednesday is afternoon release of the Federal Reserve’s Fed Beige Book report. This report is named simply after the color of its cover but details economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on the contents of this report during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any significant surprises. Generally speaking, signs of strong economic growth or inflation rising form the last update would be considered negative for bonds and mortgage rates. Slowing economic conditions with little sign of inflationary pressures would be ideal for mortgage rates.

That concludes the week’s monthly or quarterly economic reports that are likely to affect mortgage rates. The bond market will close early Thursday and will be closed Friday in observance of the Good Friday holiday. The stock markets will be closed Friday but have a full day of trading Thursday. All the markets will reopen for regular trading Monday morning. It is fairly common to see a little pressure in bonds just before a holiday as investors look to protect themselves over the long weekend.

Overall, the most important reports are Monday’s Retail Sales and Tuesday’s CPI index, but Wednesday has three releases so it may be an active day also. I believe we will see the most movement in mortgage rates either Monday or Wednesday. However, we need to keep a close eye on the stock markets for mortgage rate direction also. If stocks extend last week’s sell-off, we could see further gains in bonds and improvements to mortgage rates. The benchmark 10-year Treasury yield is currently almost 2.62%, which is well below the 2.68% we considered a resistance level. I don’t see it remaining where it is now for very long. I believe we are more likely to see it move back closer to that threshold than below 2.60% in the immediate future. Therefore, I am holding my conservative stance towards rates and recommend locking a rate if closing in the near future.

Mortgage News Roundup - Red Flags That Temp the Tax Man

Were you on Spring Break this week? If not, did you enjoy the lighter traffic because some people were? We have a pretty good roundup of financial goodies for you this week.

Five smart moves to improve your credit score for the best home loan

We’ve talked a few times about how important it is to know what is on your credit report, and the differences in credit scores. We found an excellent guide from Yahoo! Finance for improving your credit score if you are looking at becoming a first time homebuyer.

“Your credit score is the foundation of your financial health,” says Anthony Sprauve, senior consumer credit specialist for Fair Isaac Corporation (FICO), an analytics software company and owner of the FICO Score. The FICO score is a standard for measuring credit risk in the credit card, banking, retail, and mortgage industries.

1. Increase the limit on your credit cards. But beware of going too high as there may be some strong temptation. Once you’ve secured your mortgage and have those limits reduced back down.
2. Only use 7 percent of your revolving credit. “While people with high FICO scores are not perfect, their consistently responsible financial behaviour pays off over time,” Sprauve says.
3. Don’t cancel older credit cards. It reinforces how responsible you are by managing credit for a longer time.
4. Don’t apply for more than two credit cards each year. What kind of risk do lenders see? Well, statistically, people with six or more inquiries on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries on their reports, according to myFICO.
5. Give yourself at least six months to review and fix your credit report.

Red Flags That Tempt the Tax Auditor

Is there anything more frightening than the idea of being audited? (other then public speaking, of course)

When the IRS Restructuring and Reform Act was enacted in 1998, lawmakers ordered the agency to focus more on taxpayer rights instead of collection activities. In fact, the first year of the kinder, gentler IRS, about 1 in 79 tax returns were audited. By 2003, it was even easier for tax scofflaws; that year, according to IRS data, only 1 in 150 individual taxpayers were audited.

But there will always be the red flags that trigger audits.

Believe it or not, the number of audits remains low. In fiscal year 2013, the IRS audited 1.4 million people, or less than 1% of returns filed last year and the fewest audits in five years.

Even better news is that most of us aren’t in the cross-hairs because the IRS has been focusing on the rich. If you made less than $200,000 last year, your chance of being audited was just 0.88%. That’s down from the 0.94% audit rate in fiscal year 2012.

But what can you do to avoid being audited?

“Don’t draw any more attention to your return than you need to,” says Robert G. Nath, author of “The Unofficial Guide to Dealing with the IRS.” “Simple, plain-vanilla returns are fairly safe.”

The IRS says there are several ways a return can be selected for audit and the first is via the agency’s computer-scoring system known as Discriminant Information Function, or DIF. The IRS evaluates tax returns based on IRS formulas, and DIF is based on deductions, credits and exemptions with norms for taxpayers in each of the income brackets.

So what is likely to trigger a discriminant information function red flag?

• Higher incomes.
• Income other than basic wages; for example, contract payments.
• Unreported income, such as investment returns.
• Home-based businesses, especially when in addition to salary income, and home office deductions.
• Noncash charitable deductions.
• Large business meal and entertainment deductions.
• Excessive business auto usage.
• Losses from an activity that could be viewed as a hobby rather than a business.
• Large casualty losses.

But don’t let the fear of an audit keep you from taking legitimate deductions.

Market Commentary for the Week of April 7th

This week brings us the release of only two monthly economic reports that are relevant to mortgage rates, in addition to a couple of Treasury auctions and the minutes from the last FOMC meeting that have the potential to be influential on the bond market and mortgage pricing. Corporate earnings season also kicks off this week, which could be instrumental in driving stock prices significantly higher or lower. Since stock movement often affects bond trading, we will also be watching the earnings releases from some of the bigger names and bellwethers to help gauge bond direction and mortgage rates movement.

There is no relevant economic news scheduled for release Monday or Tuesday. The first events of the week will come Wednesday afternoon. One is the release of the minutes from the last FOMC meeting. Market participants will be looking at them closely as they give us insight to the Fed’s current thought process and individual Fed member opinions. Any surprises in the 2:00 PM ET release, particularly about inflation, economic conditions or their current bond buying program, could cause afternoon volatility in the markets Wednesday and possible changes in mortgage pricing.

The two Treasury auctions are scheduled for Wednesday and Thursday. There is a 10-year Treasury Note sale Wednesday and a 30-year Bond sale Thursday. We could see some weakness in bonds ahead of the sales as participating firms sell current holdings to prepare for them. This weakness is usually only temporary if the sales are met with a decent demand. The results of the auctions will be posted at 1:00 PM ET each day. If the demand from investors was strong, the bond market could rally during afternoon trading, leading to lower mortgage rates. If the sales were met with a poor demand, the afternoon weakness may cause upward revisions to mortgage pricing Wednesday and/or Thursday afternoon.

Friday has both of the week’s important economic data scheduled. The Labor Department will start the day by posting March’s Producer Price Index (PPI) at 8:30 AM ET. It will give us an important measurement of inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. If it shows rapidly rising prices, inflation fears may hurt bond prices since it erodes the value of a bond’s future fixed interest payments, leading to higher mortgage rates. A good size decline in prices would be good news for the bond market and mortgage rates. Current forecasts are calling for a 0.1% increase in the overall reading and a 0.1% rise in the core data.

The only other monthly release of the week worth watching is the University of Michigan’s Index of Consumer Sentiment at 9:55 AM ET Friday. Their consumer sentiment index will give us an indication of consumer confidence, which hints at consumers’ willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial or employment situations, they probably will delay making that purchase. This influences future consumer spending data and can have a moderate impact on the financial markets. Good news would be a sizable decline from March’s 80.0 reading. Current forecasts are calling for a reading of approximately 81.0.

Overall, look for the most movement in rates the latter part of the week. I don’t believe Friday’s rally in bonds will necessarily carry into Monday’s trading, so any gains to open the week will likely be a result of stock losses that help shift funds into bonds. Wednesday could be the most active day of the week if the FOMC minutes reveal any surprises. If not, the best bet would be Friday. Tuesday appears to be the lightest and will probably be the calmest day for mortgage rates. Look for the stock markets to also influence bond trading and mortgage rates a good part of the week as traders react to the corporate earnings news. I am expecting it to be an active week for the mortgage market, so please maintain contact with your mortgage professional if still floating an interest rate.

Mortgage News Roundup - What is Crowdfunding?

Mortgage rates for 30-year fixed mortgages fell last week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 4.25 percent, down from 4.27 percent at this same time last week.

“Rates dropped last week, erasing most of the run-up triggered previously by the Fed’s surprisingly aggressive guidance on plans to increase the Federal Funds Rate,” said Erin Lantz, vice president of mortgages at Zillow. “We expect rates to remain fairly steady this week, not making any significant movements until after Friday’s jobs report.”

The secret way companies are using big data to score you

As technology has improved, so has the ability of businesses to mine pools of highly identifiable public information as well as the ability to share it immediately with other businesses. There are so many brand new ways to “score” you that it would make your head spin. Based on hundreds of pieces of public and private data these consumer scores are used by marketers, government agencies, financial institutions, and other businesses to predict a range of consumer behaviors, from how likely we are to wind up in the hospital to how often we’ll ditch our cable providers or collect unemployment. Most of us don’t know they exist. Unfortunately, these databases could be ripe targets for cybercriminals.

“These scores are nearly impossible to track down if you don’t know where to look,” Pam Dixon, director of the World Privacy Forum and co-author of the report, told Yahoo Finance. “We really want to engage the public and lawmakers in a dialogue about what’s happening with these consumer scores and create a structure where there’s fairness.”

In addition to security issues, because these scores aren’t readily available to consumers themselves, it can be difficult to correct or remove any erroneous information. But you can ask to opt out by checking this list from the World Privacy Forum. Yahoo! Finance also wrote an extensive guide to avoiding online tracking here.

Millennials most willing to move for wife’s job

A survey from the Mayflower moving company shows more than half of Gen Y say they would move for a wife’s job. That’s compared with 43% of Boomers and just 28% of pre-Boomers.

They say it’s not about one job is better over another but if the move would make sense for both.

Crowdfunding Becomes a Hot Property in Real Estate Investing

Fundrise, a crowdfunding platform for commercial real estate, is offering shares in the D.C. building to investors, not only to those in the city but in Maryland and Virginia.

So what is crowdfunding? It’s a program where an investment company can raise funds and allow people to buy into a share of a building.

The example in the article was about a vacant, two-story brick building at 1539 Seventh St. in the Shaw neighborhood of Washington, D.C. The developer WestMill Capital Partners plans to turn the building into a boutique retail site. Shaw, once home to jazz legend Duke Ellington, is undergoing a bit of a renaissance and Fundrise sees big opportunities.

The $1.5 million development plans to use $350,000 from crowdfunding. For as little as $100, investors can buy a share. Fundrise is projecting an 8 percent return paid quarterly, with a five-year redemption. The maximum a person can invest is $2,500.

Crowdfunding takes a set period of time which can aid a developer if they need more time to get plans approved, contractors lined up, etc.

Would you be interested in crowdfunding to enter into real estate investments?