| QUOTE OF THE WEEK |
| “What’s the use of happiness? It can’t buy you money.”—Henny Youngman, English-born American comedian and musician |
| NATIONAL MARKET UPDATE |
| Ending the year on a positive note, residential construction spending in December came in 1.5% ahead of the month before. The seasonally adjusted annual rate of $939.5 billion was 6% ahead of December last year. February’s ICE Mortgage Monitor reported for-sale inventory bounced back 22% in 2024, to the highest level in nearly five years! Inventories are expected to normalize in 40% of the country’s markets this year. Realtor.com reports last week, new listings grew 4.2%, inventory was 26.7% higher than a year ago, and the median listing price fell 1% annually, marking 36 straight weeks with the median price flat or down year-over-year. |
| REVIEW OF LAST WEEK |
| WAXING AND WANING… The major stock indexes kept heading up and down on market-moving economic data and continued concerns over inflation and tariffs, with all three finally finishing down for the week. A modest 143,000 new nonfarm payrolls were added in January. A healthy jump in average hourly earnings bodes well for consumer spending, although it could also keep inflation as sticky as it’s been. But productivity is rising, which should help check inflation. Plus, the dominant services sector of the economy is still growing, while the manufacturing sector finally expanded after 26 straight months of contraction. The week ended with the Dow down 0.5%, to 44,303; the S&P 500 down 0.2%, to 6,026; and the Nasdaq down 0.5%, to 19,523. Bond prices eked out an overall gain, the 30-Year UMBS 5.5% UP 0.75, to $99.04. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate fell for the third straight week. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information. DID YOU KNOW… More than a million new homes were built last year, and inventory keeps growing. Plus, the median listing price fell year-over-year and remained competitive with existing homes on a per-square foot basis. |
| THIS WEEK’S FORECAST |
| MORTGAGE APPLICTIONS, INFLATION, RETAIL SALES… We’ll keep an eye on weekly MBA Mortgage Applications to check for growth in purchase loan activity. Economists expect inflation to remain decidedly above the Fed’s 2% target in both the Consumer Price Index (CPI) and the Producer Price Index (PPI) of wholesale prices. A slowing economy, which the Fed wants to see, should be reflected in January Retail Sales, forecast to show no gain over December. U.S. financial markets will be closed next Monday, February 17, in observance of Presidents’ Day/Washington’s Birthday. |
| FEDERAL RESERVE WATCH |
| Forecasting Federal Reserve policy changes in coming months. Wall Street is barely hanging onto the expectation that we’ll see the Fed deliver the year’s first rate cut in June. Note: In the lower chart, the 8.5% probability of change is a 91.5% probability the rate will stay the same. Current rate is 4.25%-4.50%. AFTER FOMC MEETING ON: CONSENSUS Mar 19 4.25%-4.50% May 7 4.25%-4.50% Jun 18 4.00%-4.25% Probability of change from current policy: AFTER FOMC MEETING ON: CONSENSUS Mar 19 8.5% May 7 28.5% Jun 18 50.3% |
| BUSINESS TIP OF THE WEEK |
| If you want to be more successful, you’ll have to step out of your comfort zone. Nothing great happens there. If a big ambition you want to pursue makes you feel uncomfortable, see it as your path to greatness. Believe in yourself, and go do it. |
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.
