Market Update for the Week of November 5, 2018

MARKET UPDATE

Freddie Mac’s chief economist notes: “Despite higher mortgage rates, the monthly mortgage payment remains affordable. For many buyers, the chronic lack of entry-level supply is a larger hurdle.”

Realtor.com reports that hurdle has now been cleared. After declining monthly four years in a row, October listings were up 2% versus a year ago, ending the longest housing inventory slump in history.

Demand is there. The Census Bureau put the homeownership rate up to 64.4% in Q3, driven by millennial first-time buyers. For those under 35, homeownership is up a whopping 1.2% over Q3 a year ago.

REVIEW OF LAST WEEK

ALL ABOUT WORK… Stocks worked up solid weekly gains, thanks to more people working. Worries over tariffs, which haven’t yet had much economic effect, were abated by surprisingly strong employment data.

A quarter of a million new jobs were added in October, way more than expected. The Job Creators Network reports over 4.3 million more people are now working than in January 2017.

Wages are 3.1% up from a year ago, the biggest gain since 2009. The National Retail Federation says consumers have 4.1% more to spend this holiday season than last–over $1,000 on average, a new high.

The week ended with the Dow UP 2.4%, to 25271; the S&P 500 also UP 2.4%, to 2723; and the Nasdaq UP 2.6%, to 7357.

Bond prices sank on the big October jobs report. The 30YR FNMA 4.0% bond ended down .81, to $99.55. The national average 30-year fixed mortgage rate receded after last week’s tiny rise 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?

Rents just hit an all-time high. The Census Bureau reports that in Q3 the nationwide median asking rent topped $1,000 for the first time ever.

THIS WEEK’S FORECAST

SERVICES SECTOR GROWS, BUT NOT INTEREST RATES… The ISM Services index should show strong growth well above 50 for October, though a tick down from its ultra-high September read. Interest rates, however, are not expected to grow with Wednesday’s Fed Rate Decision.

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.

FEDERAL RESERVE WATCH

Forecasting Federal Reserve policy changes in coming months… There is overwhelming feeling on Wall Street the Fed won’t touch rates this week. But a quarter percent blip is seen in December, then zilch again in January. Note: In the lower chart, a 7% probability of change is a 93% probability the rate will stay the same.

Current Fed Funds Rate: 2.00%-2.25%

AFTER FOMC MEETING ON: CONSENSUS
Nov   8 2.00%-2.25%
Dec 19 2.25%-2.50%
Jan  30 2.25%-2.50%

 

Probability of change from current policy:

AFTER FOMC MEETING ON: CONSENSUS
Nov   8    7%
Dec 19   81%
Jan 30   29%
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.
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

Andrea L. Testimonial

I want to thank you for making the process of establishing a loan so easy for us. As a real estate agent in Denver, I have the opportunity to work with a lot of lenders – I know the good ones from the bad ones. And YOU are definitely one of the “good ones”. For my own home purchase, you can imagine how selective I was in working with a lender on our mortgage. I am so glad that we worked with you and CityWide. It’s no secret that the process of procuring a mortgage is extremely stressful, but you made this process as smooth of a transaction that it could have been and given the fact that we lived in Denver, and Marcus was in the middle of a very hectic travel schedule, you met and EXCEEDED our expectations.

Your attention to detail, your personal attention to us and our needs, and your overall professionalism made the biggest difference and the best possible experience for our family. I will recommend you not only to my friends and family but to my clients who are looking for the highest level of service for their mortgage.

Thanks again Jim for everything you did for us. We are so happy to be back home in Naperville, and in our house, that very much feels like home.

Andrea L.