| |
| “I’m not always right, but I’m never wrong.”—Garfield, comic strip cat created by Jim Davis |
| Housing Starts were up a solid 7.6% compared to a year ago despite being off a bit during holiday-shortened December. The past year, single-family starts are up a very strong 15.8%, single-family permits up an impressive 32.9%. Realtor.com reports that, compared to last year, the number of homes for sale in December was 4.9% higher, new listings were 9.1% higher, yet the median listing price stayed fairly stable, up just 1.2%. Existing Home Sales dipped 1.0% in December, but the National Association of Realtors is optimistic: “The latest month’s sales look to be the bottom before inevitably turning higher in the new year.” |
| UP AGAIN… The three major stock indexes rose sharply on Friday, finishing the four-day trading week solidly ahead, as the broadly-based S&P 500 set a new record high for the first time in more than two years. Traders got enough positive economic data to foresee a soft landing for a slowing economy, as December Retail Sales, weekly jobless claims, and Housing Starts all came in stronger than expected. This data doesn’t indicate recession, but it could delay Fed rate cuts. Yet University of Michigan Consumer Sentiment hit its highest level since July 2021, as year-ahead inflation expectations fell to 2.9%, a three-year low. The week ended with the Dow UP 0.7%, to 37,864; the S&P 500 UP 1.2%, to 4,840; and the Nasdaq UP 2.3%, to 15,311. Amid dimming prospects of a March rate cut, bond prices fell, the 30-Year UMBS 5.5% down 0.89, to $99.22. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate fell to its lowest level since May 2023. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information. DID YOU KNOW… Zillow found that in Q4 of last year, 21% of homeowners were considering selling their homes in the next three years, up from 15% a year ago—another sign inventories should improve. |
| NEW AND PENDING HOME SALES, GDP, INFLATION… For December, New Home Sales are expected to continue upward, and, promisingly, so is the Pending Home Sales index of signed contracts on existing homes. The forecast is for slower Q4 economic growth, shown by the GDP-Advanced read. This is what the Fed wants to see to start cutting rates. However, the PCE Prices measure of inflation should be up a bit, something the central bankers don’t want to see. |
| Forecasting Federal Reserve policy changes in coming months. The futures market now expects the Fed to keep the rate where it is through March, then do a cut in May of at least a quarter percent. Note: In the lower chart, a 2.6% probability of change is a 97.4% probability the rate will stay the same. Current rate is 5.25%-5.50%. AFTER FOMC MEETING ON: CONSENSUS Jan 31 5.25%-5.50% Mar 20 5.25%-5.50% May 1 5.00%-5.25% Probability of change from current policy: AFTER FOMC MEETING ON: CONSENSUS Jan 31 2.6% Mar 20 49.3% May 1 87.4% |
| No matter what someone says or does, don’t take it personally and risk hurting your reputation. Better to take the high road. You only have one reputation, and a good one will open doors, but a negative one will surely close them. |
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.
