Market Update for the Week of November 12, 2018


Data firm Attom reports an all-time high 14.5 million homes are equity rich, where the loan amount is 50% or less of the property’s market worth. That’s 433,000 more homes than a year ago, 25.7% of all homes with a mortgage.

The National Association of Home Builders put builder confidence up to 68 in October. Moody’s rates homebuilding on solid footing, citing consumer confidence, unemployment and Millennial homeownership.

The Mortgage Bankers Association reports mortgage credit is now more available than at any time since 2008, with their Mortgage Credit Availability Index at its highest level in ten years.


UNCERTAINTY FALLS, STOCKS RISE… The midterm elections removed some major political uncertainties, so stocks moved up under the assumption a divided Congress won’t harm market-friendly tax cuts and deregulation.

Historically minded investors reveled in the fact stocks have done well in years with a Republican president and a split Congress. But many feel Washington gridlock will push off major legislative initiatives until after the 2020 campaign.

Meanwhile, the economy is booming, as the Fed confirmed Wednesday after keeping rates in place. This was supported by strong corporate earnings, consumer sentiment, and growth in the economy’s services sector.

The week ended with the Dow UP 2.8%, to 25989; the S&P 500 UP 2.1%, to 2781; and the Nasdaq UP 0.7%, to 7407.

Bonds weathered a volatile week, ending pretty much where they began. The 30YR FNMA 4.0% bond went UP .04, to $99.59. Freddie Mac’s Primary Mortgage Market Survey had the national average 30-year fixed mortgage rate at a seven-year high. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.


Around 1.86 million mortgage holders still have an interest rate incentive to either refinance, or sell their current home and buy one they can finance at a lower rate.


INFLATION ON TARGET, RETAIL SINGS, FACTORIES HUM… The Fed’s favorite inflation index, Core PCE Prices, should be up for October, but still in their target range. Analysts predict a good jump for October Retail Sales, reflecting strong consumer spending, while key manufacturing measures like the Philadelphia Fed Index are forecast to report healthy factory activity.

Yesterday, November 11, was Veterans Day. We honor and thank all those who serve and have served our country in the military. In observance of the holiday, the bond market is closed today.

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… Rate-wise, the Fed left well enough alone last week but a quarter percent hike is expected in December, then nothing more until March. Note: In the lower chart, a 76% probability of change is a 24% probability the rate will stay the same.

Current Fed Funds Rate: 2.00%-2.25%

Dec 19 2.25%-2.50%
Jan  30 2.25%-2.50%
Mar  20 2.50%-2.75%


Probability of change from current policy:

Dec 19   76%
Jan  30   27%
Mar  20   61%


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

It was quite apparent that Jim works hard and cares very much about the satisfaction of his clients

My husband and I closed last week on our first home with Jim Passi and Citywide Home Loans. I received Jim’s name from a friend and I am happy to say that Jim did not disappoint. As a first-time home buyer, what we knew could fill a thimble but Jim could not have done anything to make the process easier for us. He was quick to respond to all of my questions, and there were many! He explained everything along the way, sometimes several times throughout the process. It was important to Jim that we understand everything. Jim made himself available to us as much as humanly possible and there was never a time when we were waiting more than a reasonable amount of time for an answer to any question we had. He also helped us secure an appraiser and an attorney. It was quite apparent that Jim works hard and cares very much about the satisfaction of his clients. Jim and his team helped us understand everything they needed from us to make the home purchase as smooth as possible. Jim even patiently listened while I had a bit of a meltdown midway through the loan process. He continued to reassure me along the way that everything would be ok and lo and behold, it was. My husband and I are very happy with the outstanding customer service we received from Jim and his team at Citywide Home Loans. We will gladly pass his name along in the future to friends or colleagues who are interested in buying a home. Thank you, Jim and Citywide Home Loans! It was a pleasure working with you!
Becky M.