Market Update for the Week of June 10, 2019


Freddie Mac’s chief economist said today’s low rates not only help buyers, they’re also “good news for current homeowners,” as the majority of conventional mortgages originated in 2018 are now “eligible to be refinanced.”

CoreLogic’s chief economist adds that mortgage rates are “below what they were one year ago, and incomes are up, which has improved affordability for buyers,” also helped by price gains slowing the past year.

Black Knight put that annual gain at 3.8%, a seven-year low, and reported it now takes only 22% of the median income to purchase the average-priced home, “far below the long-term average of 25.1%.”


BEST WEEK OF THE YEAR… Forget tariffs, trade wars, and tired global economies. Just tell Wall Street interest rates look to go lower and watch stocks shoot up to the best weekly gain we’ve seen all year.

Traders felt the 75,000 new jobs created in May mean the economy is slowing, so the Fed will cut rates to boost it. Really? The 75,000 read is within normal monthly variations, and total wages are up 4.6% the past year.

Pessimists pointed to May’s dip in ISM Manufacturing, but at 52.1, it was still in solid growth territory. Plus, ISM Services picked up the growth pace for the sector supporting most U.S. jobs, to an unexpected 56.9.

The week ended with the Dow UP 4.7%, to 25984; the S&P 500 UP 4.4%, to 2873; and the Nasdaq UP 3.9%, to 7742.

The lower jobs number predictably sent bond prices higher. The 30YR FNMA 4.0% bond ended UP .12, to $103.34. The national average 30-year fixed mortgage rate neared a two-year low 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.


Last Monday Congress passed a bill extending the National Flood Insurance Program through September. A lapse in the program would have cost about 40,000 home sales a month because buyers can’t get loans without the insurance.


INFLATION COOL, RETAIL HOT… Both the CPI measure of consumer prices and the  PPI gauge of wholesale ones should come in with low temperature reads. Good. Even better, Retail Sales are expected to get back to hot growth for May, portraying a pretty healthy U.S. consumer.

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 now expects a quarter percent rate cut in July, and then another one in September. We’ll see. Note: In the lower chart, a 25% probability of change is a 75% probability the rate will stay the same.

Current Fed Funds Rate: 2.25%-2.50%

Jun 19 2.25%-2.50%
Jul 31 2.00%-2.25%
Sep 18 1.75%-2.00%


Probability of change from current policy:

Jun 19    25%
Jul 31    87%
Sep 18    96%
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

This testimony is from my

This testimony is from my experience being a first-time home buyer going through the process of purchasing a home with Jim Passi from City Wide home loans. Let me just start off by saying how reliable, courteous, genuine, informational and hardworking Jim Passi is. Jim is not like a lot of other loan officers. My house I purchased for under 160 grand, not a huge real estate deal. From experience with other loan officers they don’t want to deal with a smaller purchase or work on a loan that might be difficult. With our credit score being low and work history not at expectations I was almost positive I would have to wait a year or maybe two years before being approved and close on a house. I definitely had doubts that I would be a home owner, Jim worked hard and stayed in contact with us updating us almost every day of the process, even during evening hours and weekends during the stressful underwriting process. Communication is key and I give Jim a 5-star rating with that. I consider myself an average blue-collar hard-working guy that has experienced hardships during life. Jim was never turned away by the hardships, he was understanding of them and I feel like it made him work even harder to make this process a success.

I just successfully closed on a house with my fiancé. Jim did what I thought was impossible. Again, with our credit score being under 600 and spotty work history it was a difficult process that became a success with a lot of hard work. Jim also got me the best interest rate that was available. He was constantly checking the market and keeping me informed on what was available. He wanted me to take my time and make sure what rate was in our best interest. Jim has a cretin genuine care for his clients and speaking with him so much during this process I know he truly cares and wants to help people. Even after we closed Jim called and congratulated us with excitement. Jim made a dream come true for us that I was sure we would have to wait for. I’m just going to say if he made my dream come true with all the problems I had he can make a lot of others come true for any one in a similar situation. Jim Passi is highly recommended.

Tim A.