Info That Hits Us Where We Live
After heading down two months in a row, Existing Home Sales flew back up in February, increasing 3.3%, to a 5.54 million annual rate. Demand remains strong: 46% of homes sold in less than a month.
New Home Sales were flat in February, off just 0.6%, to a 618,000 annual rate. They’re still up 0.5% from a year ago, and there’s plenty of room for growth: new homes are only 10% of sales, versus 15% before the downturn.
Zillow reports the median monthly rent bumped to $1,445 in February, gaining at the fastest rate in nearly two years. Expect more renters to become buyers.
Business Tip of the Week
Try to be all things to all people and you wind up motivating no one. Target an audience and tell them how you meet their special wants and needs. Go niche and get rich.
Review of Last Week
TRIPLE PLAY… The major stock indexes tumbled, as three big items came into play: 50 million Facebook users had their data mined without their consent, the Fed raised the Funds Rate a quarter point, and the President allowed for tariffs on Chinese goods.
The Facebook scandal incited cries for greater data regulation, which could hurt social media company profits. But the rate hike was expected, and came with the good news that the economic outlook has strengthened.
Trade war worries escalated, even though initial salvos were relatively weak–tariffs on $60 billion of Chinese imports, answered by up to $3 billion in duties on U.S. imports over there. Some say this is just The Art of the Deal, but investors hate not knowing the outcome.
The week ended with the Dow down 5.7%, to 23533; the S&P 500 down 6.0%, to 2588; and the Nasdaq down 6.5%, to 6993.
Tanking stocks did not send lots more investors into bonds, though Treasuries finished the week mostly higher. The 30YR FNMA 4.0%, bond we watch ended the week unchanged, at $102.36. After falling the prior week, national average 30-year fixed mortgage rates held steady in Freddie Mac’s latest Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
Did You Know?
First American reports, “given today’s strong economy, our housing market is well positioned to adopt to rising mortgage rates.” If mortgage rates doubled overnight, their computer model posits “a mere 5% decrease” in sales.
This Week’s Forecast
UP GO PENDING HOME SALES, GDP, CONSUMER SPENDING, INFLATION, MANUFACTURING… The experts say Pending Home Sales should show a February turnaround, foretelling a gain in existing home sales a few months out. They also expect GDP economic growth, Personal Spending and Core PCE Prices (inflation) to head up, as well as the Chicago PMI gauge of Midwest manufacturing.
The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of Mar 26 – Mar 30
| Date | Time (ET) | Release | For | Consensus | Prior | Impact |
| Tu Mar 27 |
10:00 | Consumer Confidence | Mar | 129.5 | 130.8 | Moderate |
| W Mar 28 |
08:30 | GDP – Third Estimate | Q4 | 2.6% | 2.5% | HIGH |
| W Mar 28 |
10:00 | Pending Home Sales | Feb | 2.5% | -4.7% | Moderate |
| W Mar 28 |
10:30 | Crude Inventories | 03/24 | NA | -2.62M | Moderate |
| Th Mar 29 |
08:30 | Initial Unemployment Claims | 03/24 | 230K | 229K | Moderate |
| Th Mar 29 |
08:30 | Continuing Unemployment Claims | 03/17 | NA | 1.828M | Moderate |
| Th Mar 29 |
10:00 | Personal Income | Feb | 0.4% | 0.4% | Moderate |
| Th Mar 29 |
08:30 | Personal Spending | Feb | 0.2% | 0.2% | HIGH |
| Th Mar 29 |
08:30 | Core PCE Prices | Feb | 0.2% | 0.3% | HIGH |
| Th Mar 29 |
09:45 | Chicago PMI | Mar | 62.0 | 61.9 | HIGH |
| Th Mar 29 |
10:00 | U. of Michigan Consumer Sentiment – Final | Mar | 102.0 | 102.0 | Moderate |
Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months… Now that the Fed did its first hike of the year, the next one isn’t expected until June. But that one should hold through August at least. Note: In the lower chart, a 2% probability of change is a 98% certainty the rate will stay the same.
Current Fed Funds Rate: 1.25%-1.50%
| After FOMC meeting on: | Consensus |
| May 2 | 1.50%-1.75% |
| Jun 13 | 1.75%-2.00% |
| Aug 1 | 1.75%-2.00% |
Probability of change from current policy:
| After FOMC meeting on: | Consensus |
| May 2 | 2% |
| Jun 13 | 80% |
| Aug 1 | 25% |
Statistics source: www.markettrends.com
Material in this article from: Inside Lending Market Snapshot
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