Market Update for the Week of April 29, 2019

MARKET UPDATE

For the third month in a row, New Home Sales gained, up 4.5% in March, to a 692,000 annual rate, just under their 2017 post-recession high. Sales were up in the Midwest, West, and South, off in the Northeast.

There’s been an upward trend in new home sales since October, as affordability increased. Rates dropped while median prices fell year over year for the last five months, and are now down 9.7% from a year ago.

After February’s biggest monthly gain on record, Existing Home Sales slipped 4.9% in March, returning to a more typical pace. Q1 sales were still 1.2% over Q4 2018, their first quarterly gain in more than a year.

REVIEW OF LAST WEEK

SETTING RECORDS AGAIN… The broadly  based S&P 500 and the tech-y Nasdaq hit new record highs (though the Dow slipped a tick), as investors sparked to new evidence the economy is still growing very nicely, thank you.

More than 40% of the S&P 500 have reported Q1 earnings, and we’re on track for overall gains. Analysts quibbled over the size of those gains, but, hey, some of these people had forecast profit declines.

The real shocker? The first read on Q1 GDP showed the economy grew at a 3.2% annual rate! Sure, this number may be revised down, but, remember, Q1 typically delivers the lowest GDP number of the year.

The week ended with the Dow down 0.1%, to 26543; the S&P 500 UP 1.2%, to 2940; and the Nasdaq UP 1.9%, to 8146.

Muted inflationary pressures pushed bonds north for the week. The 30YR FNMA 4.0% bond ended UP .22, to $102.69. The national average 30-year fixed mortgage rate inched up again, but remained well below its year-ago 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.

DID YOU KNOW?

The job market keeps strengthening and wages are increasing at the fastest rate since the Great Recession which should support housing demand going forward.

THIS WEEK’S FORECAST

PENDING HOME SALES, MANUFACTURING, JOBS GAIN, NOT RATES… We should see more evidence of a healthy economy, with Pending  Home Sales gains, continued expansion in ISM Manufacturing, and increases in Nonfarm Payrolls and Hourly Earnings. But rate increases are NOT expected Wednesday from the Fed.

NOTE: Weaker 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 sees a rate hike this Wednesday, nor at the next two Fed confabs, though the probability of a rate cut grows. Note: In the lower chart, a 3% probability of change is a 97% probability the rate will stay the same.

Current Fed Funds Rate: 2.25%-2.50%

AFTER FOMC MEETING ON: CONSENSUS
May  1 2.25%-2.50%
Jun 19 2.25%-2.50%
Jul  31 2.25%-2.50%

 

Probability of change from current policy:

AFTER FOMC MEETING ON: CONSENSUS
May  1     3%
Jun 19    19%
Jul  31    31%
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

First time home buyer here

First time home buyer here who did it all without the adult supervision/guidance (i.e. my parents) , and I was clueless. I did my best to look into things before hand but I knew the very basics. Jim and his team were AMAZING! Jim took the time to explain the step-by-step process involved and explained it in a way that I understood. He also made sure I understood what he was saying by “quizzing” me. There was never any annoyance/aggravation in his tone even if he had to go over something 2 or 3 times. Always professional and always kind. Jim and his team were prompt with their email responses and made the whole process go smoothly. I also appreciated that Jim would reach out to me via phone and made sure I understood where we were in the process. This made for a great first time home buying experience! Highly recommend this group!

 

Amber

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