| QUOTE OF THE WEEK |
| “I used to be indecisive. Now I’m not quite sure.”—Tommy Cooper, Welsh comedian and magician |
| NATIONAL MARKET UPDATE |
| Spending on residential construction rebounded in February, up 1.3% from January’s weather-beaten building activities. Spending is now 1.6% ahead of a year ago, encouraging for the longer-term health of the housing market. The Mortgage Bankers Association reported applications for purchase mortgages rose for another week, showing “year-over-year growth for more than two months…a positive development for the housing market.” Realtor.com reports: “The spring housing market continues to warm up…with more homeowners putting their properties up for sale.” Last week, new listings were up 31.2% and total inventory up 32.3% from a year ago. |
| REVIEW OF LAST WEEK |
| TARIFF TANTRUM… President Trump announced reciprocal tariffs that were more aggressive than expected, so traders threw a tantrum, staging the worst single-day sell-off since the start of the pandemic five years ago. The escalating trade tensions sparked talk on Wall Street of stagflation—stagnant growth combined with persistent inflation—even though the U.S. economy is joining the fray from a position of strength. The ISM Non-Manufacturing read showed the dominant services sector still expanding, weekly initial jobless claims stayed well below recession levels, and a way better than expected 228,000 new jobs were added in March. The week ended with the Dow down 7.9%, to 38,315; the S&P 500 down 9.1%, to 5,074; and the Nasdaq down 10.0%, to 15,588. Traders put proceeds from their stock sales into bonds, pushing up prices, the 30-Year UMBS 5.5% spiking 1.08, to 100.23. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate ticked down again. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information. DID YOU KNOW… In February, 20.5% of homes sold above asking price, 15.4% sold at asking price, while 64.2% sold below. Fewer homes are selling at or above asking price than last year, so the market could be shifting in favor of buyers. |
| THIS WEEK’S FORECAST |
| MORTGAGE APPLICATIONS, INFLATION, JOBLESS CLAIMS… We’ll look at the MBA Mortgage Applications Index to see if purchase mortgage activity keeps climbing as it has the last few weeks. With inflation the hot topic, all eyes will be on the March Consumer Price Index (CPI), expected to show price growth moderating. The health of the labor market remains important, so it’s good to see weekly Initial Unemployment Claims forecast to stay low. |
| FEDERAL RESERVE WATCH |
| Forecasting Federal Reserve policy changes in coming months. Fears that trade wars will cause an economic slowdown have led the futures market to expect more rate cuts from the Fed. Note: In the lower chart, the 36,5% probability of change is a 63.5% probability the rate will stay the same. Current rate is 4.25%-4.50%. AFTER FOMC MEETING ON: CONSENSUS May 7 4.25%-4.50% Jun 18 4.00%-4.25% Jul 30 3.75%-4.00% Probability of change from current policy: AFTER FOMC MEETING ON: CONSENSUS May 7 36.5% Jun 18 90.4% Jul 30 86.4% |
| BUSINESS TIP OF THE WEEK |
| If you’re having trouble making a decision, weigh the downside risks. If option 1 doesn’t work out, what’s the worst that could happen? Ask yourself the same for option 2. Then make your decision based on which outcome you’d rather deal with if things don’t work out. |
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.
