Market Update for the Week of February 4, 2019


The delayed report was worth the wait, as it showed November New Home Sales shot up 16.9%, to a 657,000 annual rate. That’s down from a year ago, but inventory is up by 2,000 units for the month.

It was also good to see the median price of a new home is nearly 12% below a year ago. Not so good were Pending Home Sales, down 2.2% in December, indicating lower existing home sales a few months out.

Freddie Mac’s January Forecast says “early 2019 data signals a possible turnaround for the year,” with total home sales rising to 6.09 million, thanks to home price gains and interest rates taking a breather.


FED UP… Far from discouraging traders, the Fed sent the S&P 500 up to its best January since 1987 by declaring a newly “patient” stance on future rate hikes after leaving present rates unchanged.

The market got a further boost from the resumption of U.S.-China trade talks in Washington, stronger than expected corporate earnings, and a spectacular 304,000 jump in Nonfarm Payrolls in January.

Unemployment went to 4.0%, but that’s because of furloughed government workers (who will get paid), and the highest labor force participation rate in six years.  January ISM Manufacturing also surprised to the upside.

The week ended with the Dow UP 1.3%, to 25064; the S&P 500 UP 1.6%, to 2707; and the Nasdaq UP 1.4%, to 7264.

The strong economic data hammered some bonds on Friday, but the 30YR FNMA 4.0% bond ended UP .38, at $102.05. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate increased a barely perceptible tick. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.


First American’s Real House Price Index reports that with consumer house-buying power factored in, home prices are 35.3% below their 2006 peak and 9% lower than January 2000.


SERVICES, PRODUCTIVITY GROW… The ISM Non-Manufacturing Index should show healthy January gains for the services sector that creates most of our jobs. Productivity, closely watched by the Fed, is also expected up in Q4.

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… After no hike from the Fed last week, the Street now sees no rate changes through the beginning of summer. 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%

Mar  20 2.25%-2.50%
May   1 2.25%-2.50%
Jun  19 2.25%-2.50%


Probability of change from current policy:

Mar  20    1%
May   1     2%
Jun  19     4%

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.