Weekly Economic Summary
Monday, January 16th

After rising dramatically for the past six weeks to over 4.30% for 30 Year Fixed Rate Mortgages, it appears that rates have started to begin to improve falling to 4.12% for conforming loans and 4.40% for jumbo loans.

You can take advantage of this period of stability by preparing to be ready for any forthcoming rate improvement by watching real-time rates on Erate's Website using our Rate search tool, understanding your specific Loan Scenario, and calling me for a current tailored rate quote with closing costs. Once the details of your Rate Quote & Loan Closing Costs make sense for you to proceed you will need to complete the On-Line Long Form Application from the link at the top of our home page and I will download it and get back to you over the phone to go over it with you. Your credit score will not be checked at Erate, until you give the go ahead later on. Meanwhile, having started this process now you will be in a position to take advantage quickly of still low historic mortgage interest rates.

Calendar of Upcoming Economic data this week:

Here is a full breakdown of just US events, together with consensus estimates, courtesy of Goldman Sachs
The key economic release this week is CPI on Wednesday. There are several scheduled speaking engagements from Fed officials this week, including two by Chair Yellen on Wednesday and Thursday. The Beige Book for the January FOMC period will be released on Wednesday.
Monday, January 16

• US markets are closed in observance of Martin Luther King, Jr. Day. There will be no economic data releases.

Tuesday, January 17

• 08:45 AM New York Fed President Dudley (FOMC voter) speaks: Federal Reserve Bank of New York President William Dudley will give a speech on "Evolving Consumer Behavior: A View from the Federal Reserve Bank of New York" at an event sponsored by the National Retail Federation.
• 08:30 AM Empire manufacturing survey, January (consensus +8.5, last +9.0)
• 10:00 AM Fed Governor Brainard (FOMC voter) speaks: Federal Reserve Governor Lael Brainard will give a speech on "The Impact of Fiscal Policy on Monetary Policy" at the Brookings Institution in Washington D.C. Audience Q&A is expected.
• 06:00 PM San Francisco Fed President Williams (FOMC non-voter) speaks: Federal Reserve Bank of San Francisco President John Williams will give the keynote speech at the Sacramento Business Review Economic Forecast at Sacramento State University in California. Audience and media Q&A is expected.

Wednesday, January 18

• 08:30 AM CPI (mom), December (GS +0.29%, consensus +0.30%, last +0.20%); Core CPI (mom), December (GS +0.20%, consensus +0.20%, last +0.15%); CPI (yoy), December (GS +2.1%, consensus +2.1%, last +1.7%); Core CPI (yoy), December (GS +2.2%, consensus +2.2%, last +2.1%): We expect that core CPI rose by 0.20% in December or 2.2% on a year-over-year basis. In the November report, core inflation was softer than expected, mainly due to lower inflation in the categories of apparel, medical care, airfares, and lodging away from home. We expect some payback in the apparel category, in part related to colder-than-average December temperatures. Headline consumer prices likely increased by 0.29% in December. On a year-over-year basis, the headline index likely increased by 2.1%.
• 09:00 AM Dallas Fed President Kaplan (FOMC voter) speaks: Federal Reserve Bank of Dallas President Robert Kaplan will participate in a panel discussion on "Confidence in Uncertain Times". Media and audience Q&A is expected. President Kaplan is a voting member of the FOMC this year.
• 09:15 AM Industrial production, December (GS +1.1%, consensus +0.6%, last -0.4%): Manufacturing production, December (GS +0.4%, consensus +0.5%, last -0.1%); Capacity utilization, December (GS 75.8%, consensus 75.4%, last 75.0%): We expect industrial production to rebound by 1.1% in the December report following two months of weakness, based on our expectation of a rebound in the weather-sensitive utilities category.
• 10:00 AM NAHB housing market index, January (consensus 69, last 70): Consensus expects the NAHB homebuilders' index–which we have found to be a decent leading indicator of housing starts–to tick down to 69, though still near post-crisis highs.
• 11:00 AM Minneapolis Fed President Kashkari (FOMC voter) speaks: Federal Reserve Bank of Minneapolis President Neel Kashkari will give a speech on economic opportunity and inclusive growth at an event hosted by the Minneapolis Urban League. Audience and media Q&A is expected. President Kashkari will be a voting member on the FOMC this year.
• 02:00 PM Beige Book, January-February FOMC meeting period: The Fed's Beige Book is a summary of regional economic anecdotes from the 12 Federal Reserve districts. The December Beige Book reported modestly slower activity in a few districts, stronger consumer spending and residential investment, and mixed manufacturing activity. In the January-February Beige Book, we will look for additional anecdotes related to the state of manufacturing activity, price inflation, and wage growth.
• 03:00 PM Fed Chair Yellen (FOMC voter) speaks: Federal Reserve Chair Janet Yellen will give a speech on "The Goals of Monetary Policy and How We Pursue Them" in front of the Commonwealth Club of California in San Francisco. Audience Q&A is expected.
• 04:00 PM Total Net TIC Flows (last +$18.8bn)

Thursday, January 19

• 08:30 AM Housing starts, December (GS +12.0%, consensus +8.6%, last -18.7%); Building permits, December (consensus +1.1%, last -3.8%): We expect housing starts to rebound 12% in December, following a 19% drop in November led by the volatile multifamily category. Despite colder-than-usual December temperatures, favorable single-family fundamentals and a rising backlog of approved permits suggest scope for a meaningful rebound. Consensus expects a more modest rise of 8.6% for housing starts and looks for a 1.1% increase in building permits.
• 08:30 AM Initial jobless claims, week ended January 14 (GS 265k, consensus 251k, last 247k); Continuing jobless claims, week ended January 7 (last 2,087k): We expect initial jobless claims to rebound 18k to 265k, following two consecutive readings not far from the cycle low. We remain in a period where seasonal adjustment is difficult, and we are hesitant to infer a drop in the trend pace of layoffs based on the most recent two reports. Seasonality-related uncertainty will affect the data for at least two more weeks, and accordingly, confidence around our 265k forecast is low. The drop in initial claims has not yet been mirrored in continuing claims, which have actually risen relative to the levels in early December (as of the week ending December 31).
• 08:30 AM Philadelphia Fed manufacturing index, January (GS +16.0, consensus +16.0, last +19.7): We expect the Philadelphia Fed manufacturing survey to pull back to +16.0 following last month's increase to +19.7, remaining at levels signaling expansion in manufacturing activity. Last week, the Federal Reserve Bank of Philadelphia conducted its annual historical revision and calculation of new seasonal adjustment factors. For December, the index was revised down modestly to +19.7 from +21.5.
• 10:00 AM San Francisco Fed President Williams (FOMC non-voter) speaks: Federal Reserve Bank of San Francisco President John Williams will give the keynote address at the Solano Economic Development Corporation's Annual Luncheon Meeting in Fairfield, California. Audience Q&A is expected.
• 08:00 PM Fed Chair Yellen (FOMC voter) speaks: Federal Reserve Chair Janet Yellen will give a speech on the economic outlook and US monetary policy at an event hosted by the Stanford Institute for Economic Policy Research. Audience Q&A is expected.

Friday, January 20

• 09:00 AM Philadelphia Fed President Harker (FOMC voter) speaks: Federal Reserve Bank of Philadelphia President Patrick Harker will participate in a discussion on the economic outlook at the New Jersey Bankers Association's 6th Annual NJ Economic Leadership Forum. Media Q&A is expected. Last week, President Harker reiterated his support for three rate hikes this year.
• 01:00 PM San Francisco Fed President Williams (FOMC non-voter) speaks: San Francisco Fed President John Williams will give closing remarks at the Bay Area Council Economic Institute's 10th Annual Economic Forecast event in San Francisco. Audience Q&A is expected. Remarks will likely be similar to those from his speaking engagement on Tuesday.

Source: BofA, DB, Goldman

This is a hopeful sign, because the stability we are seeing now may signal that Mortgage Rates may improve somewhat over the coming weeks. If this happens, be prepared, and move fast.

We are still near historical lows in interest rates and time is of the essence.

Weekly Mortgage Rates Analysis

We do not know the future, but this period of super-low interest rates and unprecedented monetary policy moves may be coming to an end and "normalization" of the yield curve may be at hand. This would be a good time to get prepared to lock in your Rates!!!