Market Commentary for the Week of February 29th

 

This week has six relevant reports for the markets to digest with two being considered highly important. The rest of the reports are moderate to fairly important to the markets, meaning they have the potential to affect mortgage rates but usually don’t cause a noticeable change. The most important data comes early and late in the week, but sizable moves in stocks can impact bond trading and mortgage rates any day.

The Institute for Supply Management (ISM) will release their manufacturing index for February late Tuesday morning. This index measures manufacturer sentiment and can have a pretty large impact on the financial and mortgage markets if it varies from forecasts. It is expected to show an increase from January’s 48.2 to 48.7 this month. This is important because a reading below 50.0 means more surveyed manufacturers felt business worsened during the month than those who felt it had improved. A sub-50 reading is considered a recessionary sign. If we see a weaker than expected reading, the bond market could rally. But, a much higher than forecasted reading, particularly above 50.0 could lead to heavy selling in bonds, causing mortgage rates to rise Tuesday morning. One of the reasons this data is considered so important is the fact that it is usually the first monthly report posted that covers the preceding month. It is traditionally posted the first business day of the month, allowing for a current snapshot of conditions in the manufacturing sector.

This week has a couple of private sector employment-related reports due to be posted. The biggest one comes Wednesday morning from payroll processor ADP who will announce their change in private-sector payrolls processed last month. Since it is not a government agency report, it isn’t considered to be highly important. However, as with any employment-related data, it does draw some attention. This is especially true for this report because it is posted just a couple days before monthly employment figures are released by the Labor Department. I personally believe it is given more attention than it really deserves, particularly because many use it to predict the monthly government figures but often fail miserably. Still, if it shows a noticeable variance from expectations of 190,000 new private sector payrolls, it will likely cause movement in the markets and mortgage rates.

The Fed Beige Book is the next report scheduled for release and it will be posted Wednesday afternoon. This report details economic activity throughout the country by Federal Reserve region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during afternoon trading Wednesday. It probably will not cause a major sell off in the stock or bond markets, but it is still worth watching.

Thursday has two reports scheduled for release, but neither is considered to be highly important. The first is the revised Productivity index for the 4th Quarter of last year. The preliminary reading posted last month showed a decline of 3.0% in worker output. Analysts are expecting to see a downward revision of 0.3% to last month’s initial reading. Employee productivity is watched fairly closely because a higher level of output per hour is believed to mean that the economy can expand without inflation concerns. However, since this data is quite aged now, it likely will have little impact on Thursday’s mortgage rates unless it shows a significant change.

The second report of the day is January’s Factory Orders at 10:00 AM ET, which will give us a measurement of manufacturing sector strength. This data is similar to last week’s Durable Goods, except this report covers orders for both durable and non-durable goods. Current forecasts are calling for an increase in new orders of approximately 2.0%. A smaller than expected increase would be good news for the bond market and could lead to a slight improvement in mortgage rates since it would point towards economic weakness.

The biggest news of the week comes early Friday morning when one of the single most important monthly reports we see will be posted. The Labor Department will release February’s Employment report at 8:30 AM ET Friday. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a much smaller increase in payrolls than expected and little or no increase in earnings. Current forecasts are calling for no change in the unemployment rate of 4.9% and approximately 190,000 new jobs added to the economy. Stronger than expected readings will likely fuel a stock market rally and selling in bonds that would cause a sizable upward revision to mortgage rates. On the other hand, disappointing numbers would raise concerns about the economy’s ability to continue to grow that makes another Fed rate hike at their next meeting less likely. This would have an opposite impact on the markets and mortgage pricing.

Overall, look for a fairly active week in the markets and mortgage rates, especially the early and latter days. Friday is the most important day of the week due to the significance of that day’s data but we could also see a noticeable move in rates Tuesday. With data or relevant reports being posted four of five days and some of that data considered key, it would be prudent to maintain contact with your mortgage professional if still floating an interest rate and closing soon.

How Smart Could Your Appliances Be?

Last week at the Consumer Electronics Show (CES) in Las Vegas, some major brands displayed some appliances, but not all that you’d expect. Whirlpool and Bosch had appliances, and Haier showed mostly TVs in its exhibit space. Other white goods brands such as Sears, GE, Maytag and Electrolux did not show off any major appliances.

Instead, it was mainstream Korean electronics brands Samsung and LG who played “can you top this” where smart appliances – mostly refrigerators – were concerned.

First, Samsung announced its Family Hub Refrigerator (available this May), which is essentially a 21.5-inch vertical tablet with a four-door refrigerator attached.

The Family Hub fridge is equipped with a 1920 by 1080p touchscreen with Wi-Fi, Bluetooth and speakers. Its pre-installed apps are family- and kitchen-centric, such as a combined schedule app that syncs everyone’s Google or Apple iCal calendars, as well as a food shopping app called Groceries by MasterCard.

Inside the Hub fridge are two fish-eye cameras which snap a photo of the interior contents each time the doors closes. Photos can be viewed on the pending Samsung appliance app for shopping remotely. Interior cameras seem to be a growing smart fridge trend.

LG countered with its Signature refrigerator, which has a view-through window that turns translucent or dark by simply knocking on it. The door opens when you step on an “open door” holograph projected from the fridge onto the kitchen floor – and the fridge is smart enough to differentiate between you and a dog or cat who might happen to wander by. LG didn’t provide timing for when the fridge will be available.

Not to be outdone, Whirlpool announced its Connected French Door refrigerator, out this spring, along with a smart dishwasher and smart ranges in both gas and electric. All can be monitored and controlled from Whirlpool’s app, so you can check the refrigerator’s contents via internal Wi-Fi cameras, monitor and moderate the fridge’s varying zone temperatures, or initiate speed ice-making for parties.

Smart Appliance Ecosystems

As a result of Smart Appliances dependence on human interaction, appliances can’t perform much “If This Then That” (IFTTT) automation, nor can they work together—the washing machine or dishwasher won’t automatically eject its contents once the cleaning cycle is done, for instance, nor can a refrigerator order groceries by itself (at least, not yet). So just how “smart” appliances can ultimately become is an open question.

Despite these intelligence limitations, both Samsung and LG, along with Bosch, are attempting to build appliance ecosystems. In mid-2014, Samsung bought smart-home platform SmartThings, and all the company’s 2016 UHD TVs will double as SmartThings hubs and enable on-screen monitoring and control.

Meanwhile, LG is developing an overarching smart home/appliance platform, Smart ThinQ (confusingly pronounced “smart thin cue”). Smart ThinQ will allow LG’s appliances to communicate through an Amazon Echo-like tubular Bluetooth speaker hub equipped with a 3.5-inch color screen, Wi-Fi and ZigBee, Z-Wave, Nest and AllJoyn compatibility. There also will be small-button IR/motion sensors that can transmit limited information from normal appliances to the Smart ThinQ app.

Like Samsung, LG wants to make its controls available through a TV; a Smart ThinQ app will be included in the company’s webOS 3.0, which will first be available in the company’s new Signature OLED TVs, due later this year.

LG continues to promote HomeChat, a text-based, man-to-machine form of communication. But LG’s top-of-the-line Signature appliances lack HomeChat, which may imply the feature’s abandonment or absorption into Smart ThinQ.

Written by Stewart Wolpin

Market Commentary for the Week of February 22nd

 

This week brings us the release of seven economic reports to be concerned with in addition to two potentially relevant Treasury auctions. A couple of the reports are considered to be important to the markets and mortgage rates. There is something scheduled each day that can move rates except for Monday, so there is a strong chance of seeing a pretty active week for mortgage rates.

The first piece of data is January’s Existing Home Sales report by the National Association of Realtors late Tuesday morning. This data tracks home resales throughout the country, giving us a measurement of housing sector strength. It is expected to show a decline in sales of existing homes, meaning the housing sector softened last month. Ideally, the bond market would like to see a sizable decline in sales because weak housing makes broader economic growth more difficult. Since long-term securities such as mortgage bonds tend to thrive during weaker economic conditions, weak housing numbers would be good news for mortgage rates.

February’s Consumer Confidence Index (CCI) will also be posted at 10:00 AM ET Tuesday morning. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. If consumers are feeling good about their own financial and employment situations, they are more apt to make large purchases in the near future. Since consumer spending makes up over two-thirds of the economy, related data is considered important in terms of gauging economic activity. It is expected to show a decline in confidence from the 98.1 reading in January to 97.2 this month. A lower reading would be considered good news for bonds and mortgage rates since it would indicate consumers are less likely to make a large purchase in the near future than many thought.

January’s New Home Sales report will be posted at 10:00 AM ET Wednesday morning. This is the least important report of the week, and is the sister report to the Existing Home Sales data. They measure housing sector strength and mortgage credit demand, but usually do not have a significant impact on bond trading or mortgage rates unless they show significant surprises. Wednesday’s report is expected to show a decline in sales of newly constructed homes, hinting at weakness in the new home portion of the housing sector. The larger the decline, the better the news it is for bonds and mortgage rates.

Thursday’s only monthly important report is January’s Durable Goods Orders data at 8:30 AM ET. It will give us an important measurement of manufacturing sector strength by tracking orders at U.S. factories for items expected to last three or more years. Products such as electronics, refrigerators, airplanes and autos are examples of these big-ticket items. Analysts are expecting to see a 2.0% increase in new orders, hinting at manufacturing sector growth. This data is known to be volatile from month to month, so don’t be surprised if a modest variance from forecasts does not have much of an influence on Thursday’s mortgage rates.

Friday has the remaining three relevant pieces of economic data. The first of two revisions to the 4th Quarter GDP reading is scheduled for release at 8:30 AM ET Friday morning. The GDP is considered the benchmark reading of economic growth or contraction because it is the total sum of all goods and services produced in the U.S. Analysts’ forecasts currently call for an annual rate of growth of 0.4%, down from the initial estimate of 0.7% that was posted last month. It will be interesting to see where this figure falls and what its impact on the markets will be. Generally speaking, higher levels of activity are bad news for the bond market, while a larger downward revision would be good news for bonds and could lead to improvements in mortgage pricing Friday.

January’s Personal Income and Outlays data is also scheduled for release at 8:30 AM ET Friday morning. This data gives us an indication of consumer ability to spend and current spending habits. Current forecasts call for an increase in income of 0.4% while spending is expected to rise 0.3%. Lower levels of income means consumers have less money to spend. And weaker levels of consumer spending helps limit overall economic growth, making long-term securities such as mortgage-related bonds more attractive to investors. Therefore, the weaker the readings, the better the news it would be for mortgage rates.

The University of Michigan’s revision to their Index of Consumer Sentiment for February will close out the week’s calendar just before 10:00 AM ET Friday. Current forecasts show this index rising slightly from its preliminary estimate of 90.7. This index is fairly important because it helps us measure consumer confidence that translates into consumer willingness to spend, but is not considered to be a major market mover. This means it will probably not have a significant impact on mortgage rates, especially with GDP revision and Personal Income & Outlays reports being released Friday morning.

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 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. However, sales with higher levels of investor demand usually make bonds more attractive to investors and brings additional funds into the bond market. The buying of bonds that follows translates into lower mortgage rates.

Overall, I think Friday is the most important day of the week but Thursday may be active also. The calmest could be Monday or Wednesday but we should still see some movement in rates those days. If floating an interest rate, it would be extremely prudent to maintain contact with your mortgage professional this week as bond yields (and mortgage rates) could make a noticeable higher if a majority of the data does not show weaker than predicted results.

The Five Biggest Mortgage Mistakes You Can Make

For most buyers, the mortgage is the largest monthly expense they will have. Yet most borrowers will do little to no preparation, negotiation, or shopping to get the best deal. And they end up paying much more for their loans than they need to. You? You’re smarter than that, or you wouldn’t be reading this article. Here are five of the biggest mistakes that can cost you real money.

1. Believing advertised rates are what you’ll pay

Unless you have perfect or near-perfect credit, most advertised rates are out of your league. To get boasting rights on a rate that good, you have to pay part of a point (one percent of the loan amount) a point, or more to get the best rates.

Your lender will go over your credit with a fine-tooth comb to find anything to raise the rate. That includes qualifying you at the beginning of the transaction, and then running your credit again a day or two before you’re supposed to close on the home and loan. If there’s been any change in your debt-to-income ratio, goodbye low mortgage rate.

2. Not comparing lenders

Just like everyone knows two or three real estate agents or more, everyone knows a loan officer or a mortgage broker. A loan officer works for a bank or savings and loan and can only offer you loan packages that the bank has put together. A mortgage broker prequalifies you just like a loan officer, and shops your deal around to various lenders.

Whether you talk to a loan officer or a mortgage broker, you’re going to have to share personal financial information in order to get a realistic rate. Reputable brokers will show you what certain banks and credit unions quoted and you can pick the loan you like best.

If you’d rather do your own shopping, consider talking to a local bank, a national bank, a credit union, and a savings and loan, but remember, unless you give them personal information and permission to run your credit, it’s just talk.

3. Not paying attention to terms

Advertised rates even for those with perfect credit aren’t what you will actually pay. The true cost of the loan is the APR or annual percentage rate, which includes fees from the lender.

Understanding loan terms is harder than shopping for a new mattress. There are so many ways lenders can inch up the fees. A loan origination fee is also called a processing fee. It pays the loan officer or mortgage broker, so this fee can vary widely. You may pay one lender more for an appraisal than another might charge you.

One lender may charge more for pulling your credit than another. It’s all in your good faith estimate, which you don’t get until you’ve applied for the loan.

All terms are negotiable, so don’t be afraid to ask what a particular fee is for and can it be reduced or eliminated.

4. Waiting for a better rate

It’s great to have bragging rights on a low rate, but you don’t want to lose the home of your dreams over a quarter of a point in interest.

There’s a big picture here you could be missing. No matter what your interest rate is, you’re going to pay thousands of dollars in interest up front before you make any serious gain in equity. If you go all the way to the end of your loan’s term, you’ll pay so much interest that you could have bought the same home two or three times.

Instead of focusing on the percentage rate, work on how quickly you can build equity. Make one extra payment a year. Pay $25, $100, or $500 extra per month and you’ll more than offset the rate you’re paying.

Down the road, if rates drop through the floor, you can refinance, but even that’s not an ideal solution. You’ll pay loan origination fees, title search fees, appraisal fees and so on — enough to equal the closing costs you paid the first time around.

And don’t forget, you’ll start the amortization schedule all over again — with most of your payments going to interest instead of principal.

5. Choosing the wrong type of loan

Many families were hurt post-9/11 when lenders opened the spigots and gave a loan to almost anyone who could sign the paperwork. Suckers bought homes that were too expensive using balloon loans with low teaser rates.

The type of loan you choose should depend on current market conditions and how long you plan to stay in your home, not how much home you want to buy.

Current market conditions favor fixed rates, because rates are rising from all-time lows. Yes, they cost more than hybrid loans or adjustable rate loans, but the base amount is fixed and doesn’t change. Only your taxes and hazard insurance will cost you more over the years.

If you get an adjustable rate mortgage, you are at the mercy of market conditions. While there’s a cap on how high your interest rate can go, it’s still a risk.

If you plan to stay in your home five years or more, get a fixed-rate mortgage. If you plan to sell your home sooner, you’re taking a risk. It takes most borrowers five years just to earn back their original closing costs in equity.

Once you’ve narrowed your choice of lenders, ask them on the same day to give you a quote. If you wait even one day, rates may have changed, so you’re no longer comparing apples to apples.

Written by Blanche Evans

3 Things Real Estate Agents Need to Do to Stay Safe During an Open House

 

It’s almost mid-February, and you know what that means? It’s almost time for the big Spring crush with homes coming on the market.

We’ve looked at real estate agent safety in the past and think it’s important to run a refresher with the top three things to do. Real estate agents put themselves at risk because of the nature of their job.

Most commonly, real estate agents are victims of theft during open houses. What people don’t talk about are when the agent has to go visit a house they’re looking to list that may be abandoned but is in fact inhabited by squatters, a meth lab, or the prior owner. Or worse, there’s an abandoned pet that is aggressive.

So in today’s blog, we’ll look at the three things an agent should do to stay safe during an open house.

Trust Your Gut

The best thing you can do is trust your instincts. If something doesn’t feel right, don’t worry about insulting someone. Your safety is the most important thing.

If you feel like you’re not getting people in, and you have someone hanging out, close up the open house early.

Have A Plan

Know where you’re going to be holding an open house so you can set the hours. You don’t have to worry about following standard hours if you don’t want to be there after dark.

Communicate with your office or with a partner where you’ll be. If you have some concerns (see the first item: trust your gut), have a signal where your partner can call so you have an excuse to leave. Or plan on regularly texting someone with your status and what’s going on.

Have a buddy that can hang out with you at the open house. This partner can also keep an eye on the people looking around the house to prevent theft.

Watch Out For Traffic

When setting up for an open house or a viewing, look out for traffic if you set up signs. When making sure your sign can be seen from the road, it can get disorienting, and easy to step off a curb.

The same goes for picking up the signs. And be extra careful if it’s dark and you’re wearing dark clothing.

Take care of your safety first. It’s not worth getting hurt to go all out trying to sell a house.

3 Key Pre-Offer Actions for Home Sellers

Sellers who wait until they’re faced with a buyer’s offer to purchase before initiating three key actions could be forcing themselves to make too many decisions at once and too quickly.

Most of us are nervous about decision making. Many lack confidence in their ability. Yet, sellers will be faced with quickly making multiple financial, legal, and lifestyle decisions when a buyer’s offer is presented to them.

There are 3 key positive actions sellers should begin before offers arrive, so that they are prepared for decision making and are less overwhelmed by the selling process:

#1. Start thinking that you’re living in the buyer’s new home.

Mentally move out. Let go of “mine.” Cut the emotional cord. Concentrate on making the property as attractive to buyers as possible and practical. If you wait to start this “cut the emotional cord to home” thinking when your real estate professional presents you with an offer, you’re doing yourself a tremendous disservice. Making confident decisions is difficult when you’re distracted by pride of ownership and personal history.

#2. Start thinking about what the buyer may ask you to do.

Anticipate buyer requests regarding financing, moving dates, and other factors that may cause inconvenience or cost to you, the seller. For instance, if you had to wait many months for closing and the money from the sale, what problems could that cause you? Conversely, consider costs attached to moving in less than a month or at least sooner than convenient. Do you understand possible costs and considerations if buyers ask you to hold a second mortgage to enable them to pay the top dollar you ask for? Ask your real estate professional to explain how seller-held mortgages work and what would have to be true for you to sell that mortgage and realize cash.

#3. Start thinking beyond list price to achieve full offer value.

The value expressed in a buyer’s offer to purchase involves 5 key elements – it’s a financial package:

1. Purchase Price is not automatically the amount the seller receives since other factors, like unpaid property taxes, can reduce the total. It’s not the purchase price, but the net proceeds of the sale that sellers should concentrate on. Real estate professionals can calculate, or at least estimate, the seller’s net proceeds after costs related to the offer and deduction of commission.
2. Closing Date, or the day ownership is transferred and the seller receives the money, can represent cost or value to sellers. If the seller has to make two moves or has to pay two mortgages during the transition from one home to another, costs can add up and offer value goes down.
3. Inclusions and Exclusions represent costs and value. Appliances, light fixtures, and draperies are common seller inclusions, but the cost of replacing them in the next home reduces profit.
4. Terms and Conditions are clauses in the offer which cover “what if” risks and the obligations of both parties. These clauses detail what the buyer asks the seller to do for the purchase price. The degree of uncertainty attached to the conditions and the buyer’s related ability to close affect the value of an offer.
5. Intent and Sincerity are vital aspects of an offer although difficult to quantify. For the seller, offer value lies in the certainty that the buyer will close in spite of market shifts and other problems ahead.

Weeks or months may pass from the time that you decide to sell and the day your real estate professional receives an offer to present to you. This key stage of selling your home is no time to discover:

• what you didn’t understand about selling
• what you haven’t considered thoroughly
• which details comprise your ideal outcome.

Suggestion: To prepare for offer presentation, read the offer form standard clauses soon after listing, so that you understand what the small print commits you to do, protects you from, and leaves you vulnerable to. For instance, the seller is usually responsible for keeping the property fully insured until title changes hands. Do you understand what responsibilities you have if flooding, storm damage, or fire strikes before then? Ask your listing salesperson to show you typical offer clauses well in advance, so you have time to digest details and ask a lot of questions before you’re up against the offer deadline which may only be a few hours away.

Discussing strategies and contingencies with your listing salesperson ahead of offer presentation will help the professional negotiate a solid high-value Agreement with the buyer. Mentally preparing yourself, and anyone else who has a say in what happens to the property, means no one will be pressured into snap decisions or miss opportunities under the tight timelines common with offers.
Real estate professionals are trained to help sellers make decisions in their own best interest by providing necessary context and details, but these professionals cannot advise sellers exactly what to do, nor make decisions for them.

To gain full benefit from the knowledge and experience of the real estate professional who lists your real estate, let them fully prepare you for offer presentations in advance. When an offer comes in (usually at a very inconvenient time), you’ll feel as confident and prepared as possible faced with this life-changing opportunity. You will understand which decisions to make and how to evaluate the full offer.

Written by PJ Wade

Happy Lunar New Year!

 

What to Buy In February

The shortest month has an extra day this year, and some really great bargains thanks to President’s day sales.

Hopefully you purchased your Valentine’s Day jewelry during the sales in December and January because prices are back up for February. If not, don’t despair!

Since many Valentine’s Day gifts are at their most in-demand during the first two weeks of February, the discounts on these items are generally pretty modest. However, that doesn’t mean you should give up and pay full-price; at the very least, you should be able to find a coupon that slashes 20% to 30% off the gift of your choice.

Of the many deals we listed last year, jewelry and flowers were the most dominant category-wise. For jewelry, while most broad coupons and sales will be in that 20% range, sites like Szul, Ashford, Kay Jewelers, BlueNile, and Kohl’s will cut up to 90% off select items. Flowers and gift baskets will see 20% to 50% off from sites like 1-800-Flowers, 1-800-Baskets, FTD, Groupon, and Proflowers.

Presidents’ Day deals arrive early and stay late. In years past, we’ve seen them start as early as February 5, and last through February 22. Mattresses are the classic category to shop during these sales, and last year we saw discounts of up to 60% off at Sears, and up to 50% off with an extra 40% off at US-Mattress.

But other product categories saw an uptick in Presidents’ Day sales for the last two years, with as much as 85% off a wide assortment of apparel, home items, and furniture. Some retailers tend to offer deeper discounts on existing sales, while others will lean towards modest coupons (likely an extra 20% to 30% off) that are applicable store and website wide.

Also look to clothing and department stores for a big Presidents’ Day sale push.
Tax software will still be priced lower than it will in April. TurboTax already had a 50% off sale in January, so it’s likely to return again for eagle-eyed shoppers. Plus it never hurts to get a start on your taxes, right?

Winter clothes are on the clearance racks right now as Spring apparel is being showcased. And the Presidents’ Day Sales will make the discounts even deeper.

And what about televisions?

The beginning of February is Super Bowl season, and  many retailers will have you believe it’s a great time to upgrade your TV. DealNews data shows that most consumers treat it like any other month. Moreover, our deal data indicates that February prices are nowhere near November’s best prices, making February an ordinary month for TV shoppers.

That said, January’s Consumer Electronics Show was bustling with new TVs and technology, so while February isn’t an ideal month for TV deals, it’s still possible to find some good deals if you look in the right places. And now that 4K is becoming the new norm (and even 8K is appearing on the scene), 1080p (Full HD) is becoming the new value option.

DealNews reported that in general, mid-size TVs (in the 40″ to 55″ range) have plateaued in discounts, so they are a decent buy any time. Last month, we saw 40″ 1080p sets for consistently around $250; so look for offbrand sets for $240, and name brand sets for $275. Buying refurbished in either of those categories will further increase discounts. For 55″ sets, the spread is a little wider, with off-brand HDTVs going for $300, and name brands starting at $550.

What not to buy?

Don’t buy a new model cell phone yet. Even though the Consumer Electronics Show was last month, typically the spring is when we see the big Android and Windows flagship models debut. That means, if you’re interested in a new HTC or Samsung phone, for example, you should wait until these manufacturers release their new models, so you can score a deal on the previous generation

And free stuff?

Chipotle has given their managers the ability to give out free food to bring people back into the stores. The exact giveaways will be up to each store’s discretion, allowing managers to create their own campaigns, so you’ll need to go in to find out if your local store is offering it. They are also running a Super Bowl promotion where the first 1,500 catering orders of 20 burritos or more will receive a $50 discount.

And to save money on groceries, buy what’s in season. There’s more than you might think.

• Arugula
• Asparagus
• Artichokes
• Beets
• Bok choy
• Broccoli
• Brussels Sprouts
• Cabbage
• Cauliflower
• Carrots
• Celery
• Cilantro
• Clementines
• Dill
• Fennel
• Grapefruit
• Kale
• Lemons
• Lettuce
• Leeks
• Oranges
• Onions
• Parsnips
• Pears
• Shallots
• Sweet Potatoes
• Tangelos
• Tangerines
• Turnips
• Rhubarb

And there are cycles to what’s on sale in your supermarket.
National Canned Food Month: Canned Fruit, Pie Fillings, Vegetables, Meats: Tuna, Chicken, Salmon
National Hot Breakfast Month:  Malt O Meal, Oatmeal, Eggo Waffles, Syrup
Valentines:  Chocolate,  flowers
Chinese New Year: Soy Sauce, Teriyaki Sauce, Noodles, Canned Water Chestnuts
Heart and heart-healthy products (American Heart Month): aspirin, supplements,low cholesterol oils and spreads
Westminster Dog Show February promotions: Dog food from Eukanuba, Pedigree, Purina, and Iams

What do you usually buy in February?

9 Factors That Can Make or Break Your Home Purchase

When it comes to buying a home, we always think about the big things: sales price, location, mortgage qualification. But it’s often the little things that rise up to make living in that home a great joy or a huge letdown.

Positioning of the house

Everyone wants a house that’s light and bright, but what you might not want is a sun that sets right in your living room. If you’re in a warm climate, you can plan on being hotter than you’d like to be in that room during the summer and having higher electric bills.

Closet space

Closet space isn’t necessarily a small thing (for many of us, it’s an absolute necessity!). But, it can also be one of those things that is easily overlooked when seduced by a big kitchen or a pool in the yard. If the closet space seems like it may be a problem when you tour the house, it most likely will be a problem when you’re living in the house.

Your welcome to the neighborhood

There are neighbors who bring warm cookies to welcome you to the neighborhood and then there are the Homeowners’ Associations that welcome you with a stern warning to move your storage unit immediately even though it’s only been in your driveway for a few hours and you haven’t even arrived from your cross-country drive (true story).

The friendliness of your neighbors

Beyond your initial impression, is living in your neighborhood going to give you the kind of lifestyle you want? In many cases, you won’t know until after you’ve moved in. Spending some time there and getting to know your potential neighbors/asking questions before you purchase may give you the info you need.

Where to put the dog bowl

Does it seem like a frivolous thing to be considering when buying a home? Only until you move in and realize there’s nowhere to put the food and water bowls that won’t end up spilled, kicked over, or constantly in the way.

Think about it in terms of a car purchase. You might not notice the number/placement of drink holders in the new car you’re buying, but you’re sure going to notice how lacking they are when you’re driving a car full of people around in the 100-degree summer and there’s nowhere to put your Big Gulps. When your pets are a part of your life, considering where they will graze (and sleep and run) may help you make the best decision.

Placement of the laundry

Is it a deal breaker if your laundry room is downstairs and the bedrooms are upstairs? Probably not, but it does make things more challenging. If you’re trying to decide between a couple of homes, this may be one of the little things that helps you finalize your decision.

Commute time to and from work

Your daily commute is something you’ve probably spent considerable time thinking about, especially if you’re considering moving farther from work. But even if you’re moving equidistant from your existing home, the commute could be very different. And it’s not something you want to discover AFTER you’ve moved. Doing a few test runs before you make an offer can help.

The schools aren’t great

If you don’t yet have kids, or they’re babies, or already grown, or you don’t plan on kids, the quality of the schools may not seem like a big deal in relation to other items on your must-have list. But, you never know how long you might live there. A “starter” home that’s supposed to be a springboard to a large home in a few years may not end up springing you so quickly. And studies show that good schools can help home values, so even if you’re not packing lunches and preparing backpacks, being near people who are might be a good move.

Really high ceilings

This is another feature people tend to want in their home… until they actually have them and realize:

• It’s cold in the winter since all the warm air gets sucked up.
• It’s hot in the summer since conditioned air has a hard time doing its thing in such a vast space.
• You’ll never be able to paint the room without renting scaffolding
• Ditto for changing light bulbs

Market Commentary for the First Week of February

 

This week brings us the release of six monthly or quarterly economic reports that are likely to influence mortgage rates. The week opens and closes with key reports for the markets to digest and in between is some moderately important data. With relevant data scheduled for release four of the five days, we should see another active week for mortgage rates.

The first report comes early Monday morning when December’s Personal Income and Outlays data is posted at 8:30 AM ET. It gives us an indication of consumer ability to spend and current spending habits, making it relevant to the bond market and mortgage rates. Current forecasts call for an increase in income of 0.2% meaning consumers had a little more money to spend in December than they did in November. The spending reading is expected to also rise 0.2%, indicating consumers spent more. Stronger readings would be good news for the stock markets and could hurt bond prices, driving mortgage rates higher. Weaker than expected increases or declines would be considered good news for the bond market and mortgage rates as it would hint that consumer spending is weaker than thought, limiting economic growth.

Also set for release Monday is the Institute of Supply Management’s (ISM) manufacturing index for January. This index tracks manufacturer sentiment by rating surveyed trade executives’ opinions of business conditions. It is usually the first economic data released each month and is one of the very important reports we get monthly. Current forecasts are calling for a reading in the neighborhood of 48.3, which would be a slight change from December’s reading of 48.2. The lower the reading, the better the news for the bond market and mortgage rates because weaker sentiment indicates a slowing manufacturing sector.

Next up is Wednesday’s ADP Employment report at 8:15 AM ET. This release has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. It 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 also 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 see a reaction to its results, it is included in this week’s calendar. Analysts are expecting to see 190,000 new jobs. Good news would be a much smaller number of jobs.

Employee Productivity and Costs data for the 4th quarter will be released early Thursday morning. It can cause some movement in the bond market, but should have a minimal impact on mortgage pricing. If the productivity reading varies greatly from analysts’ forecasts of a 1.7% decline, we may see some movement in mortgage rates. Higher levels of worker productivity is good news for the bond market because it allows the economy to expand while keeping inflation subdued.

December’s Factory Orders data is also scheduled to be posted Thursday morning but at 10:00 AM ET. It is similar to last week’s Durable Goods Orders release in giving us a measurement of manufacturing sector strength, but this data includes new orders for both durable and non-durable goods. It is not one of the more important reports we get each month, however, it can influence mortgage pricing if it varies greatly from forecasts. Analysts are expecting a 2.6% decline in new orders, indicating a softening manufacturing sector. The bond market would like to see a larger decline, meaning that manufacturing activity was even weaker than many had thought.

Friday has the big news of the week. The Labor Department will release the almighty Employment report for January at 8:30 AM ET Friday. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a much smaller increase in payrolls than expected and little or no increase in earnings. Current forecasts are calling for no change in the unemployment rate of 5.0% and approximately 188,000 new jobs added to the economy. Stronger than expected readings will likely fuel a stock market rally and selling in bonds that would cause a sizable upward revision to mortgage rates. On the other hand, disappointing numbers would raise concerns about the strength of economy and would likely lead to a sizable improvement in mortgage pricing.

Overall, Friday is easily the best candidate for most important day of the week although we could see plenty of movement in the markets and mortgage rates Monday also. The calmest day will probably be Tuesday. I am fully expecting to see another very active week for mortgage rates, so please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.