| QUOTE OF THE WEEK |
| “I have tried to know absolutely nothing about a great many things, and I have succeeded fairly well.”—Robert Benchley, American humorist |
| NATIONAL MARKET UPDATE |
| Pending Home Sales surprised to the upside in June, moving ahead nearly 5% over May. This measure of signed contracts on existing homes gained for the month in all four U.S. regions, thanks to the rise in housing inventory. But inventories are still low, pushing up the Case-Shiller National Home Price Index for the 11th straight month. Still, the May annual home price gain was down from April, so prices are going up nationally at a slower pace. Home builders spent at a slightly lower yearly rate in June than May. But we’re still headed in the right direction, as spending on new home construction year-over-year is up more than 7% overall, and up almost 10% for single-families. |
| REVIEW OF LAST WEEK |
| OOPS!… As expected, the Fed did no rate cut Wednesday, but stocks cratered the rest of the week, as traders reacted to data that made them feel the economy is headed for a deeper slowdown while the Fed stays on pause. Initial jobless claims ballooned to 249,000, indicating softening in the labor market. That was reinforced by a net gain of just 85,000 jobs in July, a jump to a 4.3% unemployment rate, and a deceleration in hourly earnings. But there were some positive corporate earnings reports. Plus, we got better-than-expected productivity and slower labor cost growth, which will give the Fed more confidence inflation is easing. The week ended with the Dow down 2.1%, to 39,737; the S&P 500 also down 2.1%, to 5,347; and the Nasdaq down 3.4%, to 16,776. Traders flocked to bonds, pushing prices up solidly overall, with the 30-Year UMBS 5.5% UP 1.02, to $100.14. The national average 30-year fixed mortgage rate declined to its lowest level since February 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… Last year, 45% of home sellers were baby boomers (ages 59 to 77). Combined with sellers from the silent generation (78 and up), the two groups accounted for over half of all home sales, a trend expected to continue. |
| THIS WEEK’S FORECAST |
| MORTGAGE APPLICATIONS, SERVICES, JOBLESS CLAIMS… We’ll check the weekly MBA Mortgage Applications Index for signs of increased activity as conditions improve for buyers. Economists expect the ISM Non-Manufacturing Index to show that dominant sector of the economy back in growth mode. Weekly Initial Jobless Claims are forecast to remain at their recently elevated level. |
| FEDERAL RESERVE WATCH |
| Forecasting Federal Reserve policy changes in coming months. Thanks to this week’s economic data, the consensus in the futures market is for a half percent rate cut in September, a quarter percent in November, and another half percent in December. Note: In the lower chart, the 100.0% probability of change is a 0.0% probability the rate will stay the same. Current rate is 5.25%-5.50%. AFTER FOMC MEETING ON: CONSENSUS Sep 18 4.75%-5.00% Nov 7 4.50%-4.75% Dec 18 4.00%-4.25% Probability of change from current policy: AFTER FOMC MEETING ON: CONSENSUS Sep 18 100.0% Nov 7 90.7% Dec 18 92.6% |
| BUSINESS TIP OF THE WEEK |
| Spend time creating content instead of consuming it. The average person spends more than two hours a day on social media. If you took just a half hour a day of that time to create content, think what that could do for your business! |
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.
