| “Why do they call it rush hour when nothing moves.”—Robin Williams, American actor and comedian |
| Buyers are back. The Mortgage Bankers Association reports applications for purchase mortgages, down for more than a month, jumped 11% over the prior week. Even refinance applications were up 8% for the same period. Sellers are back too. Realtor.com: “The first couple of months of 2024 have proven to be positive for inventory levels, as the number of homes actively For Sale was at its highest level since 2020.” And sellers have plenty of equity to work with. Analytics firm CoreLogic reports that the average homeowner with a mortgage ended the year with $298,000 in equity, gaining more than $24,000 in Q4 alone. |
| PROFIT TAKING, RATE CUT HOPES… Traders kept selling, taking profits after the recent record highs, but the three major indexes dropped only modestly, as Friday’s February jobs report boosted hopes for a Fed rate cut. February’s 275,000 new jobs belied a labor market that’s weakening. January’s blowout read was revised lower by 124,000 jobs, wage growth slowed to a measly 0.1%, and unemployment rose to a two-year high. All these negatives are positives for the Fed, which is waiting for the economy to cool and hiring to recede before dropping rates. Yet the data isn’t pointing to a recession, supporting the hoped-for “soft landing” scenario. The week ended with the Dow down 0.9%, to 38,723; the S&P 500 down 0.3%, to 5,124; and the Nasdaq down 1.2%, to 16,085. Bond markets closed the week higher overall, though the 30-Year UMBS 5.5% slipped .05, to $98.23. The national average 30-year fixed mortgage rate dipped down 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… Location is no longer the number one buyer priority. A recent survey found that 56% of U.S. consumers said price is now the most important factor when choosing a home. |
| MORTGAGE APPLICATIONS, RETAIL SALES, INFLATION… We’ll watch the Mortgage Bankers Association Mortgage Applications Index to see if buyer demand continues to grow. The February Retail Sales report should show consumers back contributing to the economy after their January pullback. The Consumer Price Index is expected to show inflation heading in the wrong direction in February, though well below the growth rate of a year ago. |
| Forecasting Federal Reserve policy changes in coming months. Fed watchers still feel the central bankers will not make their first rate cut before June. Note: In the lower chart, a 3.0% probability of change is a 97.0% probability the rate will stay the same. Current rate is 5.25%-5.50%. AFTER FOMC MEETING ON: CONSENSUS Mar 20 5.25%-5.50% May 1 5.25%-5.50% Jun 12 5.00%-5.25% Probability of change from current policy: AFTER FOMC MEETING ON: CONSENSUS Mar 20 3.0% May 1 25.2% Jun 12 73.8% |
| Be passionate about serving your clients’ needs. Work hard for them, showing that you genuinely care. Treating clients exceedingly well is good business, because it leads to more business—both from them and from the referrals they give you. |
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.
