Market Update for the Week of January 22, 2019


The National Association of Home Builders (NAHB) said lower mortgage rates have stabilized builder confidence, while “low unemployment, solid job growth and favorable demographics should support housing demand” going forward.

In the absence of data due to the partial government shutdown, the NAHB estimates single-family starts totaled 876,000 units in 2018, a 3% yearly gain, with a Q4 sales dip boosting inventories in some markets.

Freddie Mac’s chief economist says, “consumer mortgage demand and homebuilder construction sentiment are on the mend, which indicates that lower interest rates are beginning to have a positive impact.”


BANKING ON BANKS AND CHINA… Stocks blasted off for the fourth straight week as investors sparked to media reports of progress in the China trade talks, plus unexpected positive earnings and outlooks from the banking sector.

Articles said China is bolstering its economy, offering to balance trade with the U.S. by 2024, and that the U.S. might lift tariffs during negotiations. Though the last item was later refuted, the market remained encouraged.

Some economic reports were postponed by the shutdown, but we did get lower than expected Preliminary Michigan Consumer Sentiment, a dip in PPI wholesale price inflation and stronger Industrial Production.

The week ended with the Dow UP 3.0%, to 24706; the S&P 500 UP 2.9%, to 2671; and the Nasdaq UP 2.7%, to 7157.

Bond prices dropped on the positive China trade news and surging stocks. The 30YR FNMA 4.0% bond went down .30, to $101.67. After dropping for six weeks, the national average 30-year fixed mortgage rate held level 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.


The Mortgage Bankers Association’s latest survey saw purchase mortgage applications rise to their highest level since 2010, climbing 43% for the week and 11% ahead of last year.


EXISTING HOME SALES DIP, NEW HOME SALES COULD BE DELAYED… We expect Existing Home Sales to slip a bit in December, but New Home Sales for the month could be delayed by the shutdown and we have no forecasts.

U.S. financial markets are closed today, Monday January 21, in observance of Martin Luther King Jr. Day.

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 Funds Futures market believes the central bank has taken its foot off the gas with rate hikes and will coast at the current level for the rest of the year. 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%

Jan  30 2.25%-2.50%
Mar  20 2.25%-2.50%
May   1 2.25%-2.50%


Probability of change from current policy:

Jan  30    1%
Mar  20    1%
May   1     7%
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

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.