QUOTE OF THE WEEK
“Time is nature’s way of keeping everything from happening at once.”—John Archibald Wheeler, American theoretical physicist
NATIONAL MARKET UPDATE
Buyers are plenty active. The Mortgage Bankers Association reported applications for purchase mortgages ticked up on the week and are coming in at a strong pace—17% higher than the same week a year ago.
According to Google Trends, searches for “home for sale” and “homes for sale” have trended up this year, hitting a two-year high in mid-July. This is another strong sign that home buying interest continues to grow.
Buyers are plenty active. The Mortgage Bankers Association reported applications for purchase mortgages ticked up on the week and are coming in at a strong pace—17% higher than the same week a year ago.
The National Association of Realtors found home price growth is slowing. Prices in Q2 grew at half the Q1 rate, with fewer metros reporting significant price gains and more posting price declines.
REVIEW OF LAST WEEK
CAUTIOUSLY BULLISH… The three major stock indexes ended the week modestly higher, posting a second straight week of gains, as traders balanced optimism around rate cuts with caution over inflation.
Inflation worries sent University of Michigan Consumer Sentiment down for the first time in four months, while the July Producer Price Index saw wholesale price inflation log the biggest monthly increase in more than three years.
But the July Consumer Price Index held inflation in check for retail buyers, with overall CPI inflation at 1.9% for the past six months. Plus, Retail Sales rose in July for the second straight month, showing consumers keep spending.
The week ended with the Dow UP 1.7%, to 44,946; the S&P 500 UP 0.9%, to 6,450; and the Nasdaq UP 0.8%, to 21,623.
Bonds ended the week flat overall, the 30-Year UMBS 5.5% up just 0.01, to 100.06. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate fell for the fourth straight week, to the lowest level since October. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW… Realtor.com reports that new builds, nationally, are now more affordable than existing homes on a price-per-square-foot basis—$218.66 per square foot versus $226.56 for resales.
THIS WEEK’S FORECAST
HOME BUILDING, EXISTING HOME SALES, FED MINUTES… Homebuilder activity is expected to come in at a slightly slower pace for July versus June, with both Housing Starts and Building Permits off a tick. Economists are forecasting July Existing Home Sales will hold at essentially the same annual rate as June. It should be interesting to see the FOMC Minutes from the Fed’s last meet, which featured two members voting for a rate cut against the majority opting for a hold.
FEDERAL RESERVE WATCH
Forecasting Federal Reserve policy changes in coming months. Fed watchers expect we’ll get rate cuts at the next two meets, then no move to end the year. Note: In the lower chart, the 84.6% probability of change means there’s only a 15.4% probability the rate will stay the same. Current rate is 4.25%-4.50%.
| AFTER FOMC MEETING ON: | CONSENSUS |
| Sep 17 | 4.00%-4.25% |
| Oct 29 | 3.75%-4.00% |
| Dec 10 | 3.75%-4.00% |
Probability of change from current policy:
| AFTER FOMC MEETING ON: | CONSENSUS |
| Sep 17 | 84.6% |
| Oct 29 | 51.5% |
| Dec 10 | 38.8% |
BUSINESS TIP OF THE WEEK
Success in business begins with how you think. Successful people are resilient, adaptable, optimistic, and focused on growth. Their mindset is rooted in curiosity, confidence, and perseverance, making them committed to learning, flexible when things change, and unafraid to fail.
