Market Update for the Week of October 22, 2018


Hurricane Florence blew September Housing Starts down 13.7% in the South, though they were up 3.8% in the rest of the country. So, starts overall slipped 5.3%, to a 1.201 million annual rate.

The National Association of Home Builders chairman noted their confidence index rose on “solid housing demand fueled by a growing economy.” In addition, “lumber prices have declined for three straight months.”

September Existing Home Sales were down 3.4%, with Florence contributing to a 5.4% dip in the South. Lack of supply is the prob, but inventories are improving, now up two months in a row after 18 months flat or down.


MIXED… The Dow was up, the S&P 500 flat and the Nasdaq down, but this was better than the three prior weeks of declines. As corporate earnings season starts, investors are skittish over interest rates and some of the economic data.

Rate worries were somewhat allayed when FOMC Minutes confirmed the Fed’s penchant for gradual hikes, though the hurricane-battered housing data looked bad, same as the lower-than-expected September Retail Sales read.

But manufacturing stays strong, in Philadelphia Fed, Empire State and Industrial Production data. And initial jobless claims fell (210,000) while continuing claims sank (1.64 million), indicating good job strength for the housing market.

The week ended with the Dow UP 0.4%, to 25444; the S&P 500 virtually flat, at 2768; and the Nasdaq down 0.6%, to 7449.

Bonds headed south, led by Treasuries, which finished the week lower. The 30YR FNMA 4.0% bond ended down .24, to $99.89. The national average 30-year fixed mortgage rate dropped back 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.


Attom Data Solutions reports homes remain more affordable than at the height of the housing boom in 2006, when buying a home required 52% of average wages, versus 37% today.


HOME SALES SLIP, GDP GROWS… September numbers for both New Home Sales and Pending Home Sales are forecast a tad down, thanks again to Hurricane Florence. Yet the GDP-Advanced read for Q3 should show economic growth still north of 3%, good for jobs, wages and real estate.

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


Forecasting Federal Reserve policy changes in coming months… The Fed futures market is still betting on no rate hike next month, then a quarter percent uptick in December, but no move in January. Note: In the lower chart, a 6% probability of change is a 94% probability the rate will stay the same.

Current Fed Funds Rate: 2.00%-2.25%

Nov   8 2.00%-2.25%
Dec 19 2.25%-2.50%
Jan  30 2.25%-2.50%


Probability of change from current policy:

Nov   8    6%
Dec 19   85%
Jan 30   22%
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.
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Jim Passi
Regional Manager
NMLS# 158000

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

Jim Passi has been such a blessing

Jim Passi has been such a blessing and huge help throughout this process. I did not expect this level of professionalism nor did we expect this level of kindness when we began our home buying process. Jim was in it for the long haul. He did not just do the bare minimum; He went above and beyond to ensure we were comfortable and understanding of the home buying process. He was humorous yet stern and professional. He slowed down and explained the process for us so that we can understand everything we were getting in to and he was patient with all of our questions. People like Jim are a diamond in a pile of pebbles, we couldn’t find anyone else in his business like him that provided the level of service and expertise he has for us. This isn’t just a job for Jim, he truly cares about you and your success. Jim is our forever guy, we will forever contact him whenever we are interested in purchasing a property in the future and recommend him to anyone who is looking to purchase a home. We are forever grateful for Jim. Truly great and kind people like him are hard to find. Thanks for everything, Jim!

Javon & Alante