Morning Report - 2015 could be the best year for housing since 2007

Vital Statistics:

	Last	Change	Percent
S&P Futures	2064.0	24.5	1.20%
Eurostoxx Index	3632.4	-9.0	-0.25%
Oil (WTI)	46.1	-0.9	-2.02%
LIBOR	0.27	0.002	0.82%
US Dollar Index (DXY)	99.58	0.142	0.14%
10 Year Govt Bond Yield	2.10%	-0.01%
Current Coupon Ginnie Mae TBA	102.4	-0.1
Current Coupon Fannie Mae TBA	101.1	0.0
BankRate 30 Year Fixed Rate Mortgage	3.88

Markets are lower this morning on no real news. Bonds andMBS are flattish.

Inflation at the wholesale level remains nowhere to be found, as the Producer Price Index fell .5%. You can't blame this on oil, as the index fell .5% ex-food and energy. Six out of the last seven months have been negative on the headline number.

Consumer sentiment fell to 91.2 from 95.4 in February, according the University of Michigan. Current conditions are down, but expectations fell quite a bit. Does a lot of snow make people depressed?

Freddie Mac is saying that 2015 could be the best year for housing since 2007. Given the carnage in housing over the past 8 years, that is like discussing the best season for the Detroit Lions under Matt Millen. They are forecasting housing starts of 1.18 million, mortgage originations of $1.3 trillion (of which 40% are refis), and home sales of 5.6 million. 

The NYT has a good article on parsing the Fed's language. Next week we will get the FOMC decision, and everyone will be looking for the presence of absence of the word "patient." (In the context of "the Fed can be patient in raising interest rates.). If that word is removed, the market will take it to mean the Fed will hike rates at its June FOMC meeting. For LOs with borrowers who are floating, let them know that next Wed could be a big day in the bond market.