Market Update for the Week of May 20, 2019


Home building sprang to life early in Q2, as Housing Starts shot up 5.7% in April, to a 1.235 million unit annual rate. Yes, single-family starts are down versus a year ago, but that was when building surged after late 2017’s hurricanes.

The fact is, planned housing  projects (units authorized but not started) are up 19% the past year, and affordability has improved, with mortgage rates down and wages now growing faster than new home prices.

Small wonder the National Association of Home Builders reports builder confidence rose in May. Forward-looking data supports this, as Building Permits increased 0.6% in April, their first gain this year.


TRADE WAR WORRIES WIN OUT… For five days, uncertainty over the trade battle with China riled Wall Street, and even some excellent economic data couldn’t prevent the stock market from ending down for the week.

The Leading Economic Index (LEI) rose in April for the third month in a row, a key sign of future growth. Plus, consumer confidence hit a 15-year high in the University of Michigan Consumer Sentiment Index.

Some fretted over April’s Retail Sales slip, but that followed March’s largest monthly gain in more than a year. Manufacturing kept growing by the Philly Fed and NY Empire State Indexes, while initial jobless claims stayed historically low.

The week ended with the Dow down 0.7%, to 25764; the S&P 500 down 0.8%, to 2860; and the Nasdaq down 1.3%, to 7816.

Trade war uneasiness sent bond prices higher. The 30YR FNMA 4.0% bond ended UP .12, at $102.78. Freddie Mac’s Primary Mortgage Market Survey showed the national average 30-year fixed mortgage rate again dropped. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.


A Harris Poll reports that about 12.1 million homeowners are planning to list their homes–around 16% of them in the next 18 Months.


EXISTING HOME SALES UP, NEW HOME SALES DOWN, FED INSIGHTS… The forecasts say April Existing Home Sales will be up, but New Home Sales down a tad. FOMC Minutes will cover the discussion at the last Fed meet, and indicate where rates may go.

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… There is now an even chance we’ll see a rate cut in September, according to the Fed Funds Futures market. 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    26%
Sep 18    50%
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

He was professional and easy to work with

Jim helped me with the purchase of my first single family residence. He was professional and easy to work with. My purchase was definitely not an easy transaction to complete as I also had a sale contingency, in the transition of becoming a full time employee and about to go on maternity leave. We closed both home transactions timely without any issues on the same day. Thank you and the team for making my first residential home purchase become reality especially on time before the baby’s arrival. I would recommend Jim and his team for your next home purchase.

Charlene C.