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| “Sometimes you lie in bed at night and you don’t have a single thing to worry about. That always worries me!”—Charlie Brown, created by Charles M. Schulz, American cartoonist |
| April saw new home sales rocket up 10.9%, the biggest monthly gain in two years. Buyers have more choices, as inventory rose by 9% for the year–and they’re getting better deals, with the median sales price 2% below a year ago. Existing Home Sales slipped a tad in April, but more homes are listed. The National Association of Realtors noted, “with the highest inventory levels in nearly five years, consumers are in a better situation to negotiate for better deals.” First American Data & Analytics reports that although home prices keep rising, the pace is slowing, noting: “the annual growth rate has slowed to its lowest level since 2012, underscoring the ongoing rebalancing in the market.” |
| IN A BAD MOODY… After the runup in stocks since April 7, traders took their profits, further motivated by Moody’s downgrading the U.S. credit rating and threats of higher tariffs on imported iPhones and the EU. The major indexes fell. However, Moody’s was just joining Standard & Poor’s who took similar action in 2011 and Fitch in 2023. But we did get a drop in both weekly mortgage applications and April’s Leading Economic Index (LEI). Nonetheless, the U.S. economy seems to be holding up. April New Home Sales surged, as noted above, plus initial jobless claims remain well below recession levels and indicate May nonfarm payrolls should show a fairly solid print. The week ended with the Dow down 2.5%, to 41,603; the S&P 500 down 2.6%, to 5,803; and the Nasdaq down 2,5%, to 18,737. The bond market also fell overall, the 30-Year UMBS 5.5% dropping 0.22, to 98.08. Freddie Mac’s Primary Mortgage Market Survey reported the national average 30-year fixed mortgage rate inched up, but continued to stay lower than 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… Fannie Mae forecasts 2025 will see 3.6% growth in home sales—and even stronger growth in 2026, with sales predicted to surge 6.8% to 5.25 million homes, fueled by economic growth both this year and next. |
| PENDING HOME SALES, HOME PRICES, FED MINUTES, INFLATION… Analysts expect the April Pending Home Sales index of signed contracts on existing homes to dip slightly after moving up in March. The S&P Case-Shiller Home Price Index is forecast to show home prices rising at a slower rate. We’ll look at FOMC Minutes from the Fed’s May 6-7 meet for signs of the timing of future rate cuts. Friday’s PCE Prices should report inflation close to, but still above, the Fed’s 2% target. |
| Forecasting Federal Reserve policy changes in coming months. The futures market still expects the Fed to make its first rate cut in September. Note: In the lower chart, the 5.6% probability of change is a 94.4% probability the rate will stay the same. Current rate is 4.25%-4.50%. AFTER FOMC MEETING ON: CONSENSUS Jun 18 4.25%-4.50% Jul 30 4.25%-4.50% Sep 17 4.00%-4.25% Probability of change from current policy: AFTER FOMC MEETING ON: CONSENSUS Jun 18 5.6% Jul 30 25.0% Sep 17 60.7% |
| Always do the right thing—for your clients and employer (as well as for your family and friends, of course). Acting with integrity greatly reduces the number of things you’ll regret doing, both professionally and personally. |
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.
