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What to watch for in real estate this week: Mortgage REIT earnings

Brent Nyitray, Sr Real Estate Analyst

After a relatively benign week, bonds have a lot of data to navigate

Bonds sold off last week, but there wasn’t much in the way of market-moving data. This week is very different; we have two major economic numbers and the FOMC meeting. Bonds could get buffeted this week.

Also, we have a very heavy week for REITs, with heavyweights American Capital (AGNC) and Annaly (NLY) reporting earnings.

Economic data this week

Monday, July 29

  • Pending Home Sales
  • Dallas Fed

Tuesday, July 30

  • Case-Shiller
  • Consumer Confidence

Wednesday, July 31

  • MBA Mortgage Applications
  • Advance estimate of second quarter GDP
  • ISM Milwaukee
  • Chicago Purchasing Manager
  • FOMC rate decision

Thursday, August 1

  • Initial jobless claims
  • Markit PMI
  • Bloomberg Consumer Comfort
  • Construction spending
  • ISM Manufacturing
  • Domestic vehicle sales

Friday, August 2

  • July jobs report
  • Personal spending
  • Personal income
  • ISM New York
  • Factory orders

Earnings Releases this week

Monday, July 29

  • American Capital Agency (AGNC)

Thursday, July 30

  • American Capital Mortgage (MTGE)

Thursday, August 1

  • Ocwen Financial (OCN)
  • Annaly Capital Management (NLY)
  • Chimera Investment Management (CIM)
  • Invesco Mortgage Capital (IVR)

Friday, August 2

  • Northstar Realty Finance (NRF)
  • Redwood Trust (RWT)

Implications for mortgage REITs

Annaly and American Capital are the biggest mortgage REITs out there, and their numbers will influence the whole sector. Not only that, but the FOMC (Federal Open Market Committee) rate decision, the advance estimate of 2Q GDP, and the employment report loom large as well. Suffice it to say it’s a big week for mortgage REITs

(Read more: Radar Logic futures curve predicts flat real estate prices until September 2014)

Implications for homebuilders

For the builders, we don’t have any earnings—they were more or less all last week. They will watch the pending home sales number closely. The sector may now be in a position where anything bond bearish (negative) is by definition builder bearish. The FOMC meeting will be a big event, as will GDP and the jobs report. The jobs report will probably be the most important—although you could argue that a strong jobs report should be builder bullish (positive), but it seems like bond bearish is builder bearish.

(Read more: Spread between 30-year fixed rate mortgages and 5/1 ARMS tightens)

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