Market Update for the Week of July 23, 2018

INFO THAT HITS US WHERE WE LIVE

After rising in May at their fastest pace in 11 years, Housing Starts fell 12.3% in June, to a 1.173 million annual rate. Yet the National Association of Home Builders reports strong buyer demand keeps builder optimism historically high.

The fact is, housing starts data is quite volatile month to month. To allow for this, compare the first six months of 2018 with the same period in 2017 and you’ll find starts are up 7.4% versus a year ago.

Similarly, building permits were down 2.2% in June, to a 1.273 million annual rate. Yet the three-month average is close to its highest level since 2007. Also, Q2 saw builders completing units at the fastest quarterly pace since the recession.

BUSINESS TIP OF THE WEEK

Four great lead sources: present clients; past clients; prospects you haven’t contacted in a while; and cold called prospects who like your pitch but don’t need you now–ask if they can refer you to someone who might.

Review of Last Week

HEADLINES, SHMEDLINES… Headlines screamed tariff and interest rate warnings, but investors took them in stride, as climbing corporate profits and steady economic data left the three major stock indexes little changed for the week.

Retail Sales rose in June for the fifth month in a row, a strong 0.5%. Economists linked this to lower taxes and higher employment, as weekly jobless claims fell to their lowest level in more than 48 years.

And let’s remember, the Fed only hikes short-term interest rates. Long-term mortgage rates don’t necessarily rise by the same amount as the Fed Funds Rate, or at the same time.

The week ended with the Dow UP 0.2%, to 25058; the S&P 500 UP 0.52, to 2802; and the Nasdaq down 0.1%, to 7820.

After outperforming for weeks, longer dated Treasuries and mortgage bonds finished a bit lower on Friday. The 30YR FNMA 4.0% bond ended down .17, to $101.81. The national average 30-year fixed mortgage rate inched backward 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?

Freddie Mac‘s chief economist says the lack of movement in mortgage rates is “good news for price sensitive home shoppers, given that this stability in borrowing costs gives them a little extra time to find the right home.”

This Week’s Forecast

EXISTING HOME SALES UP, NEW HOMES OFF, AS THE ECONOMY SPIKES Economists predict Existing Home Sales to recover in June, New Home Sales to slip a bit, and economic growth to hit 4.1% in the GDP-Advanced read for Q2.

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 23 – Jul 27

Date Time (ET) Release For Consensus Prior Impact
M
Jul 23
10:00 Existing Home Sales Jun 5.45M 5.43M Moderate
W
Jul 25
10:00 New Home Sales Jun 670K 689K Moderate
W
Jul 25
10:30 Crude Inventories 07/21 NA +5.8M Moderate
Th
Jul 26
08:30 Initial Unemployment Claims 07/21 215K 207K Moderate
Th
Jul 26
08:30 Continuing Unemployment Claims 07/14 NA 1.751M Moderate
Th
Jul 26
08:30 Durable Goods Orders Jun 3.2% -0.6% Moderate
Th
Jul 26
08:30 Durable Goods Orders – ex transportation Jun 0.4% -0.3% Moderate
F
Jul 27
08:30 GDP – Advanced Q2 4.1% 2.0% HIGH
F
Jul 27
10:00 U. of Michigan Consumer Sentiment – Final Jul 97.1 97.1 Moderate

Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months…For all the worries voiced lately over rate hikes, the Fed Funds futures market sees no move in August and just a small blip in September, then nothing again in November. Note: In the lower chart, a 3% probability of change is a 97% 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            3%
Sep 26          89%
Nov   8          18%

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.

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Jim Passi
Regional Manager
NMLS# 158000

1300 East Woodfield Road, Suite 302
Schaumburg, IL 60173
Mobile: 847-899-1813
Office: 847-273-3265

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