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

1300 East Woodfield Road, Suite 302
Schaumburg, IL 60173
Mobile: 847-899-1813
Office: 847-273-3265

My wife and I recently

My wife and I recently purchased our home in Joliet, and we used Jim Passi from CityWide Mortgage to get our mortgage. Throughout the entire time, from the first moment we called him to the closing day and beyond, Jim was just amazing. He answered all our questions, some repeatedly, with grace and compassion. He even worked with me while I was having a few temper tantrums on him.

Jim took the time to explain every detail of the process to us, because we have no clue about this process. We aren’t finance people. He is extremely patient with us on every question, and aspect of the mortgage process from preapproval all the way up and through the closing. He explained to us why he does things the way he does, versus the way other brokers do things, and they make complete sense.

We will and DO recommend Jim from CityWide Mortgage to everyone looking to purchase a home today or in the future. Jim is the best mortgage guy one can work with.

Thank you for all you did for us.

Robert and Ruth W.
Joliet, IL

Robert B W.