Market Update For the Week of April 2, 2018

Info That Hits Us Where We Live

The spring buying season started off nicely, as Pending Home Sales reversed course and went up 3.1% in February. This measure of contracts on existing homes indicates more closed sales ahead.

The National Association of Realtors (NAR) chief economist noted, “the expanding economy and healthy job market are generating sizable homebuyer demand.” But supply is tight and prices are up in many markets.

Those higher prices have given homeowners record amounts of home equity, according to Freddie Mac’s Outlook. And that may help supply, as the NAR HOME Survey found that more homeowners believe now is a good time to sell!

Business Tip of the Week

The vendors you work with can be great sources of referrals. Cultivate those relationships, and don’t forget to send business their way too. 

Review of Last Week

LET’S TRY THE OTHER DIRECTION… After two down weeks, the three major market indexes ended UP strongly for the week. The volatility stems from investors’ up and down reactions to the latest news on global trade, the Fed and tech firms.

But stock prices over the long term are driven by growth in the economy and corporate earnings, and many analysts say those look positive. Final Q4 GDP came in at 2.9%, pegging economic growth near 3% for the third month running.

Personal Income rose for the second month in a row and Initial Unemployment Claims fell to their lowest level since 1973. No wonder University of Michigan Consumer Sentiment remains at its highest level in 14 years.

The week ended with the Dow UP 2.7%, to 24143; the S&P 500 UP 2.1%, to 2642; and the Nasdaq UP 1.0%, to 7063.

For bonds, the week also ended with solid gains, as the safe haven play continued. The 30YR FNMA 4.0%, bond we watch ended the week UP .19, at $102.55. When bond prices rise, yields and rates fall, and national average 30-year fixed mortgage rates dipped in Freddie Mac’s latest Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

Did You Know?

A new study reveals Millennials are the most rent burdened generation, spending about 45% of income and paying close to $100,000 on rent before they reach 30.

This Week’s Forecast

BUZZING FACTORIES, MORE JOBS, HIGHER WAGES The ISM Index should stay well above the growth threshold of 50, indicating U.S. factories kept humming in March. The jobs market is getting healthier too. Analysts see new Nonfarm Payrolls just below 200,000, and wages up 0.2% by the Hourly Earnings measure.

The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Apr 2 – Apr 6

Date Time (ET) Release For Consensus Prior Impact
Apr 2
10:00 ISM Index Mar 60.0 60.8 HIGH
Apr 4
10:00 ISM Services Mar 59.0 59.5 Moderate
Apr 4
10:30 Crude Inventories 03/31 NA 1.64M Moderate
Apr 5
08:30 Initial Unemployment Claims 03/31 225K 215K Moderate
Apr 5
08:30 Continuing Unemployment Claims 03/24 NA 1.871M Moderate
Apr 5
08:30 Trade Balance Feb -$56.7B -$56.6B Moderate
Apr 6
08:30 Average Workweek Mar 34.5 34.5 HIGH
Apr 6
08:30 Hourly Earnings Mar 0.2% 0.1% HIGH
Apr 6
08:30 Nonfarm Payrolls Mar 175K 313K HIGH
Apr 6
08:30 Unemployment Rate Mar 4.0% 4.1% HIGH

Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… The Fed Futures market sees rates staying where they are in May, but expects the second hike of the year in June. Note: In the lower chart, a 2% probability of change is a 98% certainty the rate will stay the same.

Current Fed Funds Rate: 1.25%-1.50%

After FOMC meeting on: Consensus
May 2 1.50%-1.75%
Jun 13 1.75%-2.00%
Aug 1 1.75%-2.00%


Probability of change from current policy:

After FOMC meeting on: Consensus
May 2          2%
Jun 13        80%
Aug 1        24%

Statistics source:

Material in this article from: Inside Lending Market Snapshot

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Jim Passi
Regional Manager
NMLS# 158000

1284 West Northwest Hwy.
Palatine, IL 60067
Mobile: 847-899-1813

We closed on our new

We closed on our new home a couple of weeks ago and the process couldn’t have been easier. I think selecting a new washer and dryer was more confusing! The paperwork was minimal and Jim and his staff moved quickly through every step. Jim was easy to reach and always available to answer questions. I would highly recommend Jim to anyone hoping to secure a mortgage, but especially to first time home buyers. He made the process smooth and uncomplicated.

Teresa S.