| QUOTE OF THE WEEK |
| “Your brand is what people say about you when you’re not in the room.”—Jeff Bezos, American businessman, founder of Amazon |
| NATIONAL MARKET UPDATE |
| New home completions rose 7.6% in January and are up 9.8% the past year. Home starts and permits were down for the month, but single-family starts are up nearly 20% and permits up 24% above the five-year pandemic average. Existing Home Sales in January grew year-over-year for the fourth straight month. They decreased from December, but remain 2% ahead of a year ago. Inventories rose 16.8% the past year, to a much improved 3.5-month supply. Buyers are gaining bargaining power. A national real estate database found homes are typically selling for 2% less than asking price, the biggest drop in two years, and taking 57 days to come under contract, the longest time in five years. |
| REVIEW OF LAST WEEK |
| OOPS… A holiday-shortened week on Wall Street saw the S&P 500 hit a new record high, followed by the three major indexes falling to weekly losses, amidst worries of lingering inflation and the Fed’s pause on rate cuts. We got an unexpected S&P PMI read that had the services sector contracting, and a University of Michigan Consumer Sentiment survey showing consumers are worried about possible tariff-driven inflation. But the market seemed to view tariffs as more of a bargaining chip than a permanent issue, corporate earnings growth is up, recession fears have abated, and although the Fed is on pause, their next move will be a cut. The week ended with the Dow down 2.5%, to 43,428; the S&P 500 down 1.7%, to 6,013; and the Nasdaq down 2.5%, to 19,524. Bonds overall bounced back on the week, the 30-Year UMBS 5.5% UP 0.81, to 99.06. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate dipped again, to below where it was a year ago. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information. DID YOU KNOW… Realtor.com notes falling prices, rising new listings and inventory, and homes spending more time on the market than a year ago. This gives buyers more time to find the right home, perhaps at a reduced price. |
| THIS WEEK’S FORECAST |
| NEW AND PENDING HOME SALES, HOME PRICES, INFLATION… January New Home Sales are expected to come in down a tick for the month. The forecast is also for the January Pending Home Sales index of contracts signed on existing homes to be off a bit. Economists expect moderate price gains to continue in the December S&P Case-Shiller Home Price Index. They also predict the PCE Prices inflation gauge will hold at its current level, still above the Fed’s 2% target. |
| FEDERAL RESERVE WATCH |
| Forecasting Federal Reserve policy changes in coming months. Fed chair Powell is in no hurry to cut rates, but the futures market expects him to make a move in June. Note: In the lower chart, the 2.5% probability of change is a 97.5% 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 2.5% May 7 29.0% Jun 18 58.8% |
| BUSINESS TIP OF THE WEEK |
| Start each day by writing down your top three priorities. Make them the three things that best align with your goals, so they will have the most impact. |
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.
