Market Update for the Week of June 17, 2019


In the Fed’s Q1 Flow of Funds report, the value of all U.S. owner-occupied homes rose to a record $26.1 trillion, 15% above the 2006 peak. And homeowner equity is up to 60.4%, its highest level since 2002.

CoreLogic’s CEO explains, “the country continues to experience record economic expansion,” while Freddie Mac‘s May forecast adds, “existing home sales have benefited from low mortgage rates and a healthy job market.”

2017’s Tax Cut and Jobs Act also helped. John Burns Real Estate Consulting found last year, renters on average paid $2,716 less in taxes, homeowners $1,508 less, those disposable income spikes helping boost home ownership.


STOCKS UP TWO WEEKS STRAIGHT… Investors worried about weakness in our interdependent global economy, but optimism around trade wars and rate cuts, plus solid economic data, sent stocks north again.

Mexico tightened its borders to avoid tariffs, and the G-20 summit later this month could mean progress on a deal with China. Investors also expect this week’s Fed meeting will hint strongly at a rate cut come July.

Retail Sales rose nicely in May, while prior months were revised higher, showing strong consumer buying power. Industrial Production gained, but CPI inflation moderated, which could delay Fed rate cuts.

The week ended with the Dow UP 0.4%, to 26090 the S&P 500 UP 0.5%, to 2887; and the Nasdaq UP 0.7%, to 7797.

Rising stocks and positive data pushed bond prices lower. The 30YR FNMA 4.0% bond ended down .20, to $103.14. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate stayed near its two-year low. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.


A new study reveals people are happiest with their lives when their debt is in the form of mortgages. In other words, mortgages are the most satisfying form of debt.


HOME BUILDING, EXISTING SALES GAIN, THE FED HOLDS… Home builders should show more activity in May’s Housing Starts and Building Permits reports. But no action is expected with the Fed’s FOMC Rate Decision on Wednesday, though we’ll all look for indications of a rate cut in July.

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 should leave rates unchanged this week, but the Fed Funds Futures market sees a quarter percent rate cut in July, followed by another one in September. Note: In the lower chart, a 19% probability of change is an 81% 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    19%
Jul 31    84%
Sep 18    95%
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

To say the home buying

To say the home buying process is anything less than stressful is a felony! Jim, first and foremost, helped us cope, understand and work through every step when we bought our home. There were many, upon many moments where we needed counsel and Jim was always there. His responses were immediate and insightful. Speaking with Jim was like speaking with a friend and you knew he had your best interest in mind. So, the needed, constant communication with him never became a chore. My husband and I can say, without shadow of a doubt, that Jim was our cheerleader that motivated us to continue on (believe us, our situation was one for the books!).

Now, that we are done (yay!), and the process is over, our hands have been wiped clean; we are still going to continue our rapport with Jim. Knowing he has invested so much time with us, there is no reason to cease our relationship now. We thank Jim for getting our family to where we are today, a brand new home for our son to grow up in.

Angela & Andrew