Market Update for the Week of July 2, 2018

INFO THAT HITS US WHERE WE LIVE

It was a welcome shock to see May New Home Sales spike 6.7% in May, up 14.1% from a year ago, at a 689,000 annual rate. And with housing starts recently at a recovery high, we’re now building supply.

But May Pending Home Sales slipped a modest 0.5%. This index of contracts signed on existing homes points to a small dip in those closings in the next month or two.

Freddie Mac‘s chief economist notes mortgage rates have stabilized and “the economy and housing market overall are on solid footing this summer.” He added, “Home price growth…is expected to moderate.”

BUSINESS TIP OF THE WEEK

Rather than selling customers, focus on servicing them. Anticipate their needs, meet those needs and sales will happen. No one wants to be sold, but everyone appreciates great service.

Review of Last Week

TRADE BARRIER… Forget all the yak about tariffs on China. The trade barrier that seems firmly in place is the one on Wall Street holding stock prices in check, sending the three major market indexes south for the second week in a row.

Cooler heads say the impacts of a trade war–if there ever is one–are likely to be temporary. Meanwhile, Personal Income and Spending went up in May, and Q1 GDP achieved 2.0% growth, decent for that quarter.

Plus, the Chicago PMI, at 64.1, showed Midwest manufacturing expanding, while the Michigan Consumer Sentiment index rose to 98.2. And for the first time in more than six years, Core PCE inflation hit 2.0%, another sign of a strong economy.

The week ended with the Dow down 1.5%, to 24216; the S&P 500 down 1.3%, to 2718; and the Nasdaq down 2.4%, to 7510.

Bonds finished the first half of the year flat to up a bit. The 30YR FNMA 4.0% bond ended UP .19, to $101.92. Freddie Mac’s latest Primary Mortgage Market Survey saw the national average 30-year fixed mortgage rate retreat, down now four of the last five weeks. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?

Houzz.com reports recent home buyers are a bigger part of the renovation market, and when a home sells, kitchens and master bathrooms yield the highest return on investment (ROI).

This Week’s Forecast

MANUFACTURING AND JOBS GROW, A PEEK INTO THE FED… June’s ISM Index of manufacturing is forecast well above 50, indicating solid expansion. Around 200,000 new Nonfarm Payrolls a month is healthy job growth, and June’s number should land in that territory. FOMC Minutes let us eavesdrop on the last Fed meet, for insight on their next move.

Tuesday July 3 the stock markets will close at 1 p.m. and the bond market sat 2 p.m. All U.S. financial markets will be closed Wednesday July 4 in observance of Independence Day.

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 Jul 2 – Jul 6

 

Date Time (ET) Release For Consensus Prior Impact
M
Jul 2
10:00 ISM Index Jun 58.5 58.7 HIGH
Th
Jul 5
08:30 Initial Unemployment Claims 06/30 225K 227K Moderate
Th
Jul 5
08:30 Continuing Unemployment Claims 06/23 NA 1.705M Moderate
Th
Jul 5
10:00 ISM Services Jun 58.3 58.6 Moderate
Th
Jul 5
11:00 Crude Inventories 06/30 NA -9.9M Moderate
Th
Jul 5
14:00 FOMC Minutes Jun NA NA HIGH
F
Jul 6
08:30 Average Workweek Jun 34.5 34.5 HIGH
F
Jul 6
08:30 Hourly Earnings Jun 0.3% 0.3% HIGH
F
Jul 6
08:30 Nonfarm Payrolls Jun 195K 223K HIGH
F
Jul 6
08:30 Unemployment Rate Jun 3.8% 3.8% HIGH
F
Jul 6
08:30 Trade Balance May -$43.6B -$46.2B Moderate

Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… It will be a quiet summer at the Fed, followed by another small hike in the fall, which the futures market says will hold through November. Note: In the lower chart, a 4% probability of change is a 96% certainty the rate will stay the same.

Current Fed Funds Rate: 1.75%-2.00%

 

After FOMC meeting on: Consensus
Aug   1 1.75%-2.00%
Sep 26 2.00%-2.25%
Nov   8 2.00%-2.25%

 

Probability of change from current policy:

After FOMC meeting on: Consensus
Aug   1            4%
Sep 26          75%
Nov   8          28%

Statistics source: www.markettrends.com

Material in this article from: Inside Lending Market Snapshot

This is an advertisement for Jim Passi. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in this message is the property of Citywide Home Loans and cannot be reproduced for any use without prior written consent. This message is intended for business professionals only and is not intended for distribution to consumers or other third parties. The material does not represent the opinion of Citywide Home Loans. Citywide CO NMLS #67180. Regulated by the Division of Real Estate.

The Jim Passi Team at Citywide Home Loans proudly serves Illinois, Wisconsin, Michigan, Indiana, Georgia and Flordia. If you are looking to buy a home or refinance, we have you covered. Apply Now to get started.
Posted in
Jim Passi - Citiwide Home Loans

Jim Passi
Regional Manager
NMLS# 158000

1284 West Northwest Hwy.
Palatine, IL 60067
Mobile: 847-899-1813
Email: jim.passi@alamedamortgage.com

Jim and his team where

Jim and his team where very helpful, friendly and informative with the whole application process – made it painless. My dream of owning and not paying rent, with the IHDA program, came true. Thank you.

Victoria S.