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Where are the Millenials Going? And a Mortgage Update

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Blog by Doug Ingersoll | January 28th, 2016

From Elliott Eisenberg the Bowtie Economist:
"While auto sales hit 17.5 million in 2015, slightly surpassing the prior record set in 2000, the US population is now 12.7% larger! Per capita sales are falling because the percentage of persons with driver's licenses is declining. The percentage with a license aged 20 through 24 is 77%, down from 80% in 2011 and 92% in 1983. For those under 20, the declines are steeper. Suburbia take note!"
From Richard Silva, Loan Officer at LoanStar Home Lending. Phone: 602.373.3654 or rsilva@goloanstar.com

The Dow posted its lowest close since August 25, reinforcing that January offered an incredibly rocky start for Stocks in 2016. 
This latest sharp decline is fueled by more than oil and recognizes continued economic woes in China, weak U.S. manufacturing
data stemming from the strong dollar and tame inflation. While some traction in Stocks was gained by week's end, the seesaw trading pattern signaled extreme volatility.
So why is this important to homebuyers and homeowners who are considering a refinance? 
When Stocks plunge, Mortgage Backed Securities and other Bonds usually improve. Because home loan rates are directly tied to mortgage Bonds, home loan rates can improve in the process. And right now, home loan rates continue to hover near all-time lows.
In housing news, December Existing Home Sales surged nearly 15 percent from November, the largest monthly jump in history. However, the big gains could be due to closings that were delayed until December because of new TRID or "Know Before You Owe" rules. While December Housing Starts declined slightly after big gains in November, the Commerce Department reported that this was the ninth straight month that Housing Starts were above 1 million units, the longest stretch since 2007.

For 2015, Housing Starts were up nearly 11 percent. 

Forecast for the Week:   
The week is fully loaded with economic data on housing, inflation, consumer attitudes and more. Plus, we'll get the Fed's take on the state of the economy.
Housing data this week includes the S&P/Case-Shiller Home Price Index on Tuesday, followed by New Home Sales on Wednesday and Pending Home Sales on Thursday.
Consumer Confidence will be released on Tuesday, with the Consumer Sentiment Index hitting on Friday.
The FOMC Monetary Policy Statement release will wrap up this month's Fed meeting on Wednesday.
Weekly Initial Jobless Claims and Durable Goods Orders will be delivered on Thursday.
The closely watched Gross Domestic Product data for 4th quarter of 2015 will be released Friday along with the Employment Cost Index and the Chicago PMI manufacturing index.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based. 
When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.