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 - Citiwide Home Loans

Jim Passi
Regional Manager
NMLS# 158000

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

This testimony is from my

This testimony is from my experience being a first-time home buyer going through the process of purchasing a home with Jim Passi from City Wide home loans. Let me just start off by saying how reliable, courteous, genuine, informational and hardworking Jim Passi is. Jim is not like a lot of other loan officers. My house I purchased for under 160 grand, not a huge real estate deal. From experience with other loan officers they don’t want to deal with a smaller purchase or work on a loan that might be difficult. With our credit score being low and work history not at expectations I was almost positive I would have to wait a year or maybe two years before being approved and close on a house. I definitely had doubts that I would be a home owner, Jim worked hard and stayed in contact with us updating us almost every day of the process, even during evening hours and weekends during the stressful underwriting process. Communication is key and I give Jim a 5-star rating with that. I consider myself an average blue-collar hard-working guy that has experienced hardships during life. Jim was never turned away by the hardships, he was understanding of them and I feel like it made him work even harder to make this process a success.

I just successfully closed on a house with my fiancé. Jim did what I thought was impossible. Again, with our credit score being under 600 and spotty work history it was a difficult process that became a success with a lot of hard work. Jim also got me the best interest rate that was available. He was constantly checking the market and keeping me informed on what was available. He wanted me to take my time and make sure what rate was in our best interest. Jim has a cretin genuine care for his clients and speaking with him so much during this process I know he truly cares and wants to help people. Even after we closed Jim called and congratulated us with excitement. Jim made a dream come true for us that I was sure we would have to wait for. I’m just going to say if he made my dream come true with all the problems I had he can make a lot of others come true for any one in a similar situation. Jim Passi is highly recommended.

Tim A.