Market Update for the Week of January 14, 2019

MARKET UPDATE

Last week, Freddie Mac’s chief economist observed, “Mortgage rates fell to their lowest level in nine months,” and he feels that this, “combined with continued income growth and lower energy prices…should lead to a firming of home sales.”

Buyers in many areas can also take advantage of the fact that home price growth has slowed in 33 states and 71 of the country’s 100 largest markets, according to data and analytics firm Black Knight.

Their latest Mortgage Monitor also reveals that today’s rates mean about 2.43 million borrowers can now likely qualify to reduce their rate by refinancing. Small wonder mortgage applications jumped more than 20%.

REVIEW OF LAST WEEK

FED FRIENDLY, DATA DECENT, CHINA CLOSING… Stocks bolted ahead for the third week in a row, as investors sparked to market friendly comments from the Fed, good economic data and signs China is closing in on a deal.

Wednesday’s Fed Minutes revealed they could “afford to be patient” about raising rates. The next day, Fed Chair Powell confirmed they will be “flexible” and “patient” with rate hikes and balance sheet reductions.

The important services sector of the economy keeps growing and the latest CPI pegged inflation under the Fed’s 2% target, so no need to heat up rates to cool down prices. Finally, progress was reported on Chinese trade negotiations.

The week ended with the Dow UP 2.4%, to 23996; the S&P 500 UP 2.5%, to 2596; and the Nasdaq UP 3.5%, to 6971.

With stocks surging, bonds lost ground. The 30YR FNMA 4.0% bond went down .09, to $101.97. The national average 30-year fixed mortgage rate dropped significantly in Freddie Mac’s 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?

Despite the partial government shutdown, the IRS resumed processing lender requests to verify mortgage applicants’ incomes.

THIS WEEK’S FORECAST

HOME BUILDING, RETAIL SALES MAY BE DELAYED, MANUFACTURING GROWS… December Housing Starts and Building Permits could be delayed by the partial government shutdown, and there are no forecasts. But we should get manufacturing reads, with the closely watched Philadelphia Fed Index expected to  show gains in that key region.

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… The latest rhetoric from the Fed has Wall Street convinced there won’t be another rate hike this year. Hmmm…. Note: In the lower chart, a 1% probability of change is a 99% probability the rate will stay the same.

Current Fed Funds Rate: 2.25%-2.50%

AFTER FOMC MEETING ON: CONSENSUS
Jan  30 2.25%-2.50%
Mar  20 2.25%-2.50%
May   1 2.25%-2.50%

 

Probability of change from current policy:

AFTER FOMC MEETING ON: CONSENSUS
Jan  30    1%
Mar  20    1%
May   1     8%
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

1121 E. Main Street, Suite 121
St. Charles, IL 60174
Mobile: 847-899-1813
Email: jim.passi@alamedamortgage.com

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.