Market Update for the Week of May 13, 2019


National average mortgage rates dipped again, so it was no surprise the Mortgage Bankers Association reported a 5% increase in the unadjusted Purchase Index of applications for the week and versus a year ago.

Our 84 million Millennials are the largest U.S. generational group ever, and next year their biggest segment turns 30, the prime age for first home buying. Hey, 79% of Millennials say home ownership is still the hallmark of the American dream.

At the other end of the demographics, the 55+ housing market sees a surge in Baby Boomers buying retirement nests. The National Association of Home Builders reports builder confidence in this segment hit a record high in Q1.


TRADERS TRADED TRADE ANGST FOR TRADE OPTIMISM… Just as trade dominates this headline, it dominated Wall Street’s mindset. For four days, worries about tariff increases on Friday dampened investor enthusiasm.

But when Friday came, positive comments from both sides, plus the President’s tweet that talks were “constructive,” rallied stocks for the day, though the S&P 500 and the Nasdaq saw their worst weekly losses of the year. 

Consumer prices overall and core prices (excluding food and energy) rose less than expected. Both the Atlanta and New York Fed presidents said rates may be cut on concerns over low inflation and/or any economic effects from the tariffs.

The week ended with the Dow down 2.1%, to 25942; the S&P 500 down 2.2%, to 2881; and the Nasdaq down 3.0%, to 7917.

Bond prices went higher on trade worries, then finished flat with Friday’s optimism. The 30YR FNMA 4.0% bond ended unchanged, at $102.66. The national average 30-year fixed mortgage rate fell again 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.


A new study says up to 41% of homebuyers are considering accommodating a family member from another generation, such as a senior parent or adult child. In 1980 only 12% of us lived in multigenerational households.


HOMEBUILDERS BUILDING, RETAILERS SELLING… Expect to see an uptick in homebuilder activity when we get April Housing Starts and Building Permits numbers on Thursday. April Retail Sales should also be up, though at a slightly slower pace than March.

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.


Forecasting Federal Reserve policy changes in coming months… The Fed Funds Futures market feels rates will hold for now, though we could have a rate cut in the fall. Note: In the lower chart, a 10% probability of change is a 90% probability the rate will stay the same.

Current Fed Funds Rate: 2.25%-2.50%

Jun 19 2.25%-2.50%
Jul 31 2.25%-2.50%
Sep 18 2.25%-2.50%


Probability of change from current policy:

Jun 19    10%
Jul 31    19%
Sep 18    38%
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

Jim Passi provides it ALL!

Jim Passi provides it ALL! It took me over a year to find a property that ideally met all of the needs of my family. In that time, I did extensive research and worked with several lenders. I was very surprised – and equally disappointed, that it was just as difficult to find a knowledgeable, professional, responsive and conscientious lender as it was to find our dream home! Jim is a rare gem! In an age where even satisfactory Customer Service seems harder to come by, Jim takes pride in taking “outstanding” to an unbelievable level! The property I purchased was a modest short sale (under $150K), – and nothing about that process is short! From the beginning – to EVEN AFTER THE CLOSING, Jim treated me like I was a million-dollar client 🙂 He’s the epitome of having an entire support team wrapped up in one person and I honestly don’t know how he squeezes everything into a day! He was genuinely enthusiastic in offering valuable advice, based on both his experience and expertise, which gave me solid direction to reducing my debt and increasing my assets to qualify me for the best programs and rates. He THOROUGHLY explained all of my options, consistently and expeditiously updated me throughout the process, AND was inhumanly patient with every question, every time. On top of it all, he is analytically brilliant with a head for numbers that is nothing short of amazing! Not only would I use Jim Passi for future refinancing and purchases, I refer him every chance I get!

THANK YOU for all of your dedication and concern, Jim!!

Lisa B.