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| “When we ask for advice, we are usually looking for an accomplice.”—Saul Bellow, Canadian-American writer |
| Freddie Mac’s Chief Economist noted that in the current market, on a median-priced home, a homebuyer could “save thousands annually compared to earlier this year, showing that affordability is slowly improving.” The National Association of Realtors (NAR) reports that in Q3, typical American families spent, on average, 24.8% of their income on mortgage payments, down from 25.6% the previous quarter and down from 25.2% the year before. The Mortgage Bankers Association found homebuyer purchasing power rose in September. The median monthly payment applied for by buyers slid lower for the fourth straight month, to $2,067. |
| PULLBACK… The three major stock indexes retreated for the week, but it wasn’t because Wall Street was worried about the economy, Fed rate cuts, or the financial health of America’s publicly owned corporations. Without much economic data to chew on, thanks to the government shutdown, traders wondered if all the hoopla around AI had pushed stock valuations too high and took the opportunity to sell holdings and grab some profits. ADP did report 42,000 new private sector jobs, ISM Services showed solid growth in October, and 82% of the S&P 500 companies reporting Q3 earnings beat estimates, on track to post 12% earnings growth overall. The week ended with the Dow down 1.2%, to 46987; the S&P 500 down 1.6%, to 6,729; and the Nasdaq down 3.0%, to 23,005. Bonds also tipped south, the 30-Year UMBS 5.0% slipping 1 basis point, to 99.16. In Freddie Mac’s weekly Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate remained near its lows for the year. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information. DID YOU KNOW… A new NAR survey found sellers who used an agent earned an average net profit of $138,477, about $6,200 more than sellers who went it alone. Small wonder, the share of those sellers has fallen to a record low 5%. |
| MORTGAGE APPLICATIONS, INFLATION, RETAIL SALES… We’ll check on homebuyer activity in the latest MBA Mortgage Applications Index. If the October Consumer Price Index (CPI) isn’t delayed, economists expect inflation to keep moderating. But the October Retail Sales report is expected to be delayed by the government shutdown, so there are no forecasts. Tuesday, November 11, the bond markets will be closed in observance of Veterans Day, but the stock markets will be open. |
| Forecasting Federal Reserve policy changes in coming months. Fed watchers see a good chance we’ll get another quarter percent rate cut in December. But there’s a greater probability they’ll hold it there rather than cut it at the next two meets. Note: In the lower chart, the 66.8% probability of change means there’s only a 33.2% probability the rate will stay the same. Current rate is 3.75%-4.00%. |
| AFTER FOMC MEETING ON: | CONSENSUS |
| Dec 10 | 3.50%-3.75% |
| Jan 28 | 3.50%-3.75% |
| Mar 18 | 3.50%-3.75% |
Probability of change from current policy:
| AFTER FOMC MEETING ON: | CONSENSUS |
| Dec 10 | 66.8% |
| Jan 28 | 46.3% |
| Mar 18 | 48.3% |
| Consistency beats intensity. Some people make 100 calls in a day and then nothing for two weeks; others spend two weeks making 10 calls a day. Which one gets better results? Slow and steady always wins. |
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.
