| QUOTE OF THE WEEK |
| “When we ask for advice, we are usually looking for an accomplice.”—Saul Bellow, American novelist |
| NATIONAL MARKET UPDATE |
| A nice bump in September buyer activity sent Pending Home Sales up more than 7% to their highest level since March. This index of signed contracts on existing homes is now ahead, year-over-year. Builder spending on new home construction in September headed up a tick over the revised August estimate, and is now 4.1% ahead of spending a year ago. So, more new homes will be coming to for-sale inventories. Both the FHFA and Case-Shiller August Home Price Indexes slowed to yearly gains just over 4%, the sixth straight month of slowing for the FHFA, the fifth for the Case-Shiller, which booked a monthly decline for the first time since 2022. |
| REVIEW OF LAST WEEK |
| DISMAL… That was the word one analyst used to describe the October jobs report, which along with other disappointing economic data and corporate earnings reports sent the three major stock indexes south for the week. October saw a paltry 12,000 new jobs, which some blamed on weather. But August and September jobs were revised down by 112,000, for a net loss of 100,000 payrolls. including an October loss of 28,000 private sector jobs. The Fed’s favorite core PCE inflation was above their 2% target for the third straight month, which might rule out big rate cuts. But they’ll have to cut to avoid a recession, as ISM Manufacturing data showed that sector still weakening. The week ended with the Dow down 0.1%, to 42,052; the S&P 500 down 1.4%, to 5,729; and the Nasdaq down 1.5%, to 18,240. Bond prices took a hit overall, the 30-Year UMBS 5.5% down 0.11, to $99.01. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate rose modestly, but remains more than one percent lower than this time last year. 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 forecasts total mortgage origination volume will increase next year by 28% over 2024, with purchase mortgage volume 13% higher than this year. |
| THIS WEEK’S FORECAST |
| MORTGAGE APPLICATIONS, UNIT LABOR COSTS, THE FED… We’ll monitor the weekly MBA Mortgage Applications Index to see if purchase applications remain ahead of last year. The Q3 Unit Labor Costs-Preliminary read is expected to report an increase, foretelling a continued rise in consumer prices. Given recent signs of a slowing economy, the Fed’s FOMC Rate Decision on Thursday should give us another quarter percent cut. Next Monday, November 11, the stock markets will be open, but the bond markets will be closed in observance of Veterans Day. |
| FEDERAL RESERVE WATCH |
| Forecasting Federal Reserve policy changes in coming months. A quarter percent rate cut this week is as close to a sure thing as you’ll see on Wall Street. There’s strong consensus for another quarter percent cut in December, but almost equal probability for either a hold there or another quarter percent slice in January. Note: In the lower chart, the 98.1% probability of change is a 98.1% probability the rate will drop. Current rate is 4.75%-5.00%. AFTER FOMC MEETING ON: CONSENSUS Nov 7 4.50%-4.75% Dec 18 4.25%-4.50% Jan 29 4.00%-4.25% Probability of change from current policy: AFTER FOMC MEETING ON: CONSENSUS Nov 7 98.1% Dec 18 80.3% Jan 29 47.0% |
| BUSINESS TIP OF THE WEEK |
| Visualize what your success will look like, then make a firm decision to succeed. When you commit to putting in the work, opportunities arise and good things happen—the reward for your commitment to do what needs to be done. |
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.
