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| “Doing nothing is very hard to do…you never know when you’re finished.”—Leslie Nielsen, Canadian-American actor and comedian |
| Sales of new homes finished 2023 up 8.0% in December, 4.2% ahead of 2022, their first yearly gain since 2020. Good news for buyers, the median price of new homes sold has fallen 20.2% from its peak in 2022. The Pending Home Sales index of signed contracts on existing homes ended the year up 8.3% in December. The National Association of Realtors forecasts a 13% increase in those sales this year, and a 15.8% rise in 2025. Realtor.com already sees signs the housing market is returning to normal. New listings last week were up 3.4%, and total inventory rose 8.6% from a year ago, while the median listing price was only 1% higher than last year. |
| ANOTHER WIN… The week’s economic data provided more evidence the Fed’s rate hikes are lowering inflation without throwing the economy into recession, so traders sent the three major stock indexes to a second winning week. The Advance Q4 GDP read showed the economy grew an unexpected 3.3% the last three months of 2023. Plus, personal spending was up a strong 0.7% in December, as consumers continue to contribute. Yet inflation keeps moderating. The Fed’s favorite PCE Price Index held at 2.6% year-over-year. Taking out volatile food and energy prices, Core PCE fell to 2.9%, closing in on the Fed’s 2% target, and the lowest level since March 2021. The week ended with the Dow UP 0.6%, to 38,109; the S&P 500 UP 1.1%, to 4,891; and the Nasdaq UP 0.09%, to 15,455. Bonds stayed in a holding pattern, the 30-Year UMBS 5.5% UP a mere 0.06, to $99.28. The national average 30-year fixed mortgage rate rose very slightly 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. DID YOU KNOW… The Mortgage Bankers Association reports the demand for purchase mortgages has increased every week this year, rising 8% last week, after surging 9% the week before, and 6% the first week of 2024. |
| HOME PRICES, CONSTRUCTION SPENDING, JOBS, THE FED… The S&P Case-Shiller Home Price Index is forecast to show continuing gains in November. Also expected to head up is December Construction Spending. The FOMC Rate Decision should reveal no move yet. Analysts predict Friday’s January jobs report will show a smaller number of new Nonfarm Payrolls and a slightly higher Unemployment Rate. |
| Forecasting Federal Reserve policy changes in coming months. Even with last week’s encouraging inflation numbers, Wall Street sees no rate cuts at the Fed’s next two meets (though there’s growing sentiment for a March move), then a cut in May of at least a quarter percent. Note: In the lower chart, a 3.1% probability of change is a 96.9% 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 3.1% Mar 20 49.1% May 1 88.0% |
| Success really is all about who you know. Work to build a strong network of business partners, referral partners, clients, and prospects. Take advantage of industry and community events to initiate and develop these connections. |
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.
