Market Update for the Week of March 18, 2019

MARKET UPDATE

Starting 2019 slowly, New Home Sales receded 6.9% in January, to a 607,000 annual rate. This followed their strong December read, revised up to 652,000, giving 2018 the highest annual average sales pace since 2007.

Good news for buyers, prices are also receding. Both the median and average prices of new homes sold in January are down from a year ago. The strong labor market, with rising wages, should also support demand.

New home sales are well below where they should be relative to population, which would be around 820,000, annually. Add today’s lower mortgage rates to this picture, and the housing market should continue expanding.

REVIEW OF LAST WEEK

GOOD CHINA, BETTER FED… China’s No. 2 leader was optimistic about both a U.S. trade deal and stimulating his slowing economy, and Fed Chair Powell promised rate hike patience, so investors sent stocks to four-month highs.

All was not perfect, as disappointing New Home Sales were joined by Industrial Production and the Empire State Index showing slower manufacturing growth, nationally and in the New York region.

Yet job openings rose to 7.58 million, third highest on record, Retail Sales gained in January, Durable Goods Orders show rising business investment, and U. of Michigan Consumer Sentiment shot up to 97.8 in March.

The week ended with the Dow UP 1.6%, to 25849; the S&P 500 UP 2.9%, to 2822; and the Nasdaq UP 3.8%, to 7689.

That lower than expected manufacturing data boosted bonds. The 30YR FNMA 4.0% bond ended UP .11, to $102.36. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate fell to its lowest level since February last year. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?

CoreLogic reports that even with slower home price appreciation, the average U.S. homeowner saw a $9,700 gain in equity from Q4 2017 to Q4 2018.

THIS WEEK’S FORECAST

EXISTING HOME SALES, FACTORY ACTIVITY UP, BUT NOT RATES… February Existing Home Sales should rebound to a more than 5 million unit annual rate. The  Philadelphia Fed Index is expected to show factory activity heading up in that region. Fortunately, not going up will be the FOMC 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… Virtually no one on Wall Street sees the Fed touching rates at this week’s FOMC meet. Same goes for  the two confabs after that. 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
Mar  20 2.25%-2.50%
May   1 2.25%-2.50%
Jun  19 2.25%-2.50%

 

Probability of change from current policy:

AFTER FOMC MEETING ON: CONSENSUS
Mar  20     1%
May   1     3%
Jun  19    10%
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

1284 West Northwest Hwy.
Palatine, IL 60067
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.