Market Update for the Week of March 25, 2019


Existing Home Sales shot up 11.8% in February, heading back over 5 million, all the way to a 5.510 million annual rate. This gain wipes out nearly a year’s worth of declines.

Also, the rate of growth for median home prices slowed to a mild 3.6% increase for the month. So wages are now growing almost as fast as prices, which, combined with lower mortgage rates, boosts affordability.

That might be why the National Association of Realtors HOME survey reports more folks say now is a good time to buy–37%, up from 34% in Q4 2018. Purchase mortgage applications, in fact, were up for the week and versus a year ago.


DOVISH FED, BUT STOCKS DIVE… The Fed left rates alone AND strongly hinted there could be no more hikes this year, a very dovish stance. Stocks headed up Thursday, but tanked Friday, finishing the week down.

Traders fretted over economic growth after weak eurozone manufacturing reports and a yield curve inversion, where the rate of the 10-year Treasury dipped below the rate of the three-month note, a recession indicator for some.

But that inversion corrected itself, plus traders saw continued U.S. manufacturing expansion, super low Unemployment Claims and the super high Existing Home Sales covered above. Go figure.

The week ended with the Dow down 1.3%, to 25502; the S&P 500 down 0.8%, to 2801; and the Nasdaq down 0.6%, to 7643.

Bonds gained on the flight to safety. The 30YR FNMA 4.0% bond ended UP .45, to $102.81. Kicking off the spring homebuying season, the national average 30-year fixed mortgage rate dropped 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.


Black Knight reports 3.27 million homeowners could now reduce their mortgage rate 0.75% by refinancing, up 16% from a year ago, and the largest number since January 2018.


HOME BUILDING SLIPS, NEW AND PENDING HOME SALES GAIN, GDP GROWS… February’s Housing Starts and Building Permits should be off just a tick, but New Home Sales and Pending Home Sales are expected up. The GDP-Third Estimate is forecast to show decent economic growth 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… Last week, the central bankers heavily hinted they won’t hike rates this year. The only probable change is for rates to move down. Note: In the lower chart, a 4% probability of change is a 96% probability the rate will stay the same.

Current Fed Funds Rate: 2.25%-2.50%

May  1 2.25%-2.50%
Jun 19 2.25%-2.50%
Jul  31 2.25%-2.50%


Probability of change from current policy:

May  1     4%
Jun 19    17%
Jul  31    26%


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

Jim was fantastic

Jim was fantastic. My partner and I were buying our first house and Jim helped us figure out what we could afford and made sure that we were informed every step along the way. The person we bought the house from wanted the closing to be fast, and Jim made sure that it was. He made sure that we didn’t have to worry about anything. I am very grateful for Jim making our housing purchase go as smoothly and as quickly as possible.
Caswyn O