It’s Showtime for the Fed

Investors remain almost evenly divided about whether the Fed will raise the federal funds rate on Thursday. Fed officials have stated that policy decisions will be determined by the performance of the economy, but recent comments reveal mixed views on whether the conditions for a rate hike have been met. The uncertainty about the outcome makes it likely that Thursday’s Fed statement and press conference will cause a large market reaction.

The question comes down to whether or not the current mortgage rates already have the Fed rate hike priced in? If the Fed hikes, we may see a sudden uptick in mortgage rates at that moment, but by the end of day, the net result may only a slight increase. It is safe to say that we won’t be seeing rates much lower than today’s rate sheets. Could be a very good time to lock in your rate now!

In other economic news, the unemployment rate declined to a multi-year lows. Additional labor market data released on Wednesday contained more good news for the economy. The JOLTS report indicated that job openings in July jumped to the highest level since the data collection began in 2000.

Week Ahead:

Factors: The highly anticipated Fed statement and press conference will take place on Thursday. With investors divided about the outcome, it likely will be a volatile session. Before that, Retail Sales will be released on Tuesday. Retail Sales account for about 70% of economic activity. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Wednesday. CPI looks at the price change for finished goods which are sold to consumers. Housing Starts will be released on Thursday.

Volatility: High
Trend: Slightly Higher
Today’s rate snapshot: 30-day lock rates as of 9/8/2015 08:35AM:
30-year Fixed (conforming): 3.875% (3.99%APR*) same as last week
15-year fixed (conforming): 3.125% (3.25% APR*) same as last week
7-year ARM (conforming) 3.25% (3.375% APR*) –.125% lower from last week
30-year Fixed (jumbo) 3.75% (3.875% APR**) –.125% lower from last week
*Based on 70% LTV, primary residence, rate and term refinance and purchase, 175k minimum loan size, 30-day lock. Rates subject to change at any time based on bond market pricing fluctuations. **Minimum loan size for a jumbo loan is $418,000. This information is intended for professional reference only, and not intended for consumer use. Additional qualifications and disclosures apply.
Have a great week!

Jim Krantz
Vice President
NMLS # 761955
Jim.Krantz@TraditionLLC.com
Direct 952.252.4488 / Cell 612.716.9999 / Fax 952.252.4489

Tradition Mortgage LLC
NMLS # 286998
4350 Baker Rd Suite 190 / Minnetonka, MN 55343 / www.TraditionWest.com

APPLY NOW

Rates Stay Flat on Mixed Employment Data

Friday’s Employment report came in close to the forecasts overall, but did little to shed light the prospects of a Fed rate hike in September. Rates have traded sideways as investors wait for more clues to the upcoming Fed decision. A small shortfall in job gains was offset by stronger than expected wage gains and a decline in the unemployment rate. Against a consensus forecast of 220K, the economy added 173K jobs in August, but upward revisions to prior months added another 44K. The unemployment rate declined from 5.3% to 5.1%, the lowest level since April 2008.

Investors had been looking to the Employment report to provide more clarity on whether the Fed will begin to raise the federal funds rate at the September 17 meeting. The on target data provided little guidance, however, and investors remain divided. One reason is that recent comments from Fed officials have spanned the spectrum from fully supportive to strongly against. There is broad agreement that the performance of the labor market is on track to match the Fed’s conditions for a rate hike. Inflation, however, is much more debatable. Core inflation has held far below the Fed’s target level of 2.0%, and potentially slower economic growth around the world has reduced expectations for future inflation.

On a separate note, trading action in the stock market will continue to influence rates this week. Any stock rally will pull rates upward, but conversely, a drop in stocks will help push rates down.

Week Ahead

Factors: It’s a light week for economic reports. The JOLTS report, measuring job openings and labor turnover rates, will be released on Wednesday. The Producer Price Index (PPI), which focuses on the increase in prices of “intermediate” goods and services used by companies to produce finished products, will come out on Friday. The most influence on Mortgage rates will be exerted by trading action in the stock market.

Volatility: High
Trend: Slightly Higher
Today’s rate snapshot: 30-day lock rates as of 9/8/2015 08:35AM:
30-year Fixed (conforming): 3.875% (3.99%APR*) same as last week
15-year fixed (conforming): 3.125% (3.25% APR*) same as last week
7-year ARM (conforming) 3.375% (3.49% APR*) +.125% from last week
30-year Fixed (jumbo) 3.875% (3.99% APR**) same as last week
*Based on 70% LTV, primary residence, rate and term refinance and purchase, 175k minimum loan size, 30-day lock. Rates subject to change at any time based on bond market pricing fluctuations. **Minimum loan size for a jumbo loan is $418,000. This information is intended for professional reference only, and not intended for consumer use. Additional qualifications and disclosures apply.
Have a great week!

Jim Krantz
Vice President
NMLS # 761955
Jim.Krantz@TraditionLLC.com
Direct 952.252.4488 / Cell 612.716.9999 / Fax 952.252.4489

Tradition Mortgage LLC
NMLS # 286998
4350 Baker Rd Suite 190 / Minnetonka, MN 55343 / www.TraditionWest.com

APPLY NOW

Stock Market Volatility = Rate Volatility

Over the past week, mortgage rates were pushed and pulled by unusually large movements in global stock markets, which overshadowed our positive US economic data. Concerns about slowing global economic growth, particularly in China, caused the U.S. stock market to decline sharply early in the week. However, with stocks at much lower prices, buyers stepped in later in the week, erasing the week’s earlier losses. While the magnitude of the moves were relatively smaller, a similar pattern was seen in mortgage rates. Rates dropped early in the week and then gave back their improvement later in the week. This relationship between stocks and mortgage rates is common, as investors shift assets between stocks and bonds.

The recent revisions to U.S. Gross Domestic Product, the broadest measure of economic activity, revealed an increase in growth during the second quarter to 3.7% from an original estimate of 2.3%. The positive GDP news was somewhat countered by the fact rising inventories accounted for the majority of the increase, which raises doubts about future growth without more sales demand. Investors will be watching closely the upcoming Payroll report due out this Friday, as continued strong numbers will improve the odds of a Fed rate hike of .25% in September. Expect more volatility in both the stock and bond markets in the days ahead!

Jim Krantz
Vice President
NMLS # 761955
Jim.Krantz@TraditionLLC.com
Direct 952.252.4488 / Cell 612.716.9999 / Fax 952.252.4489

Tradition Mortgage LLC
NMLS # 286998
4350 Baker Rd Suite 190 / Minnetonka, MN 55343 / www.TraditionWest.com

APPLY NOW

Please find attached an open job posting for the civil service position of Park Police Officer. Applicants can apply online at www.minneapolisparks.org/jobs . This position is open for applications until noon on August 24, 2015. Applicants should also note that the oral exams are scheduled for September 10-11, 2015 and the physical fitness exam is scheduled for September 15, 2015. The Police Recruit Academy is tentatively scheduled for January 2016.

“Working 9 to 5. What a way to make a living.” Dolly Parton. A heavy economic calendar culminated the week with July’s Jobs Report singing of work for many Americans. The housing market showed strong gains as well.

Employers added 215,000 new jobs in July, while the figures for May and June were revised higher by a total of 13,000 jobs. Retail, health care and leisure led the pack with job opportunities. The unemployment rate held on to its seven-year low, which is also good news. While the average workweek increased, growth rate of wages remains at the lowest levels on record.

Home prices jumped in June. Research firm CoreLogic reported that home prices rose 6.5 percent, marking the 40th consecutive month of year-over-year gains. While prices are still down from the peak in April 2006, they are expected to continue to rise. CoreLogic cited pent-up demand, affordability and a more robust labor market for the gains.

Data continues to show that the job market, housing sector and economy overall are improving, even though inflation remains below the Fed’s 2 percent target. The big question now is whether or not our economy has improved enough for the Federal Reserve to begin raising its benchmark Fed Funds Rate (the rate banks use to lend each other money overnight). September’s Federal Open Market Committee meeting provides the next opportunity to see what the Fed will do.

For now, home loan rates remain near historic lows.

Jim Krantz
Vice President
NMLS # 761955
Jim.Krantz@TraditionLLC.com
Direct 952.252.4488 / Cell 612.716.9999 / Fax 952.252.4489

Tradition Mortgage LLC
NMLS # 286998
4350 Baker Rd Suite 190 / Minnetonka, MN 55343 / www.TraditionWest.com

APPLY NOW

The Police Officers Federation of Minneapolis is officially invited to participate in the upcoming Minnesota Guns ‘n Hoses Poker Challenge. The Guns ‘n Hoses Poker Challenge is a national competition with 50 events around the country that features groups of players from Law Enforcement and Firefighters from the region battling it out on the felt for bragging rights, the Guns ‘n Hose Team Trophy and the right to represent the State of Minnesota at the Guns ‘n Hoses National Championships.

Each local event features dealers and tournament staff from the World Series of Poker, world class poker tables, custom chips and much more. Players will compete for the opportunity to represent Minnesota at the season ending Guns ‘n Hoses National Championships and play for a share of $100,000 in cash and prizes including a custom Guns ‘n Hoses Harley-Davidson and the Championship Bracelet. It’s a spirited, friendly competition that raises funds for the National Law Enforcement Officers Memorial Fund and the National Fallen Firefighters Foundation. Two highly respected organizations that serve the Law Enforcement and Firefighting communities and those making the ultimate sacrifice.

The event is open to Active Duty and Retired LEO’s and Firefighters as well as civilian employees of Law Enforcement and Fire Departments. Teams can represent their Department, Association or Union. Friends & Family as well as supporters of law enforcement & firefighters are also encouraged to participate. The tournament features a unique team and individual competition pitting teams of ten from law enforcement/firefighter departments as well as motorcycle clubs and dealer groups from around the region. To participate, we need someone from your organization to act as the team captain and organize the nine other players to represent your organization. Multiple teams from your organization are permitted if you have players wanting to participate. GUNS ‘N HOSES IS OFFERING A SPECIAL BONUS FOR THE FIRST 5 TEAM CAPTAINS TO SIGN UP. EACH WILL RECEIVE A COMPLIMENTARY “RE-BUY” TOKEN AT CHECK IN. SO REGISTER TO DAY TO RECEIVE YOUR SPECIAL BONUS.

Your team can earn a competitive edge in the form of Bonus Chips if they sign up quickly as well as a special bonus for the team captain for helping get the team together. The event is limited to 20 teams so register today. If you are interested in coordinating a team, send an email to Registration@GunsNHosesPoker.com and we will reserve a table for your team.

For more information, log onto www.GunsNHosesPoker.com. Your Official Invitation is below. You can click on the invitation to visit the Guns ‘n Hoses website.