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| “If I were two-faced, would I be wearing this one?”—Abraham Lincoln, 16th president of the United States |
| The Mortgage Bankers Association reports January loan applications for new homes rocketed up 19.1% from a year ago and 38% over December, the strongest January read the MBA has ever recorded. Also on the new homes front, single-family housing starts came in 22% higher and building permits nearly 36% higher than a year ago. In line with that, the builder confidence index rose to its highest level since last August. Market data firm Altos Research reports there were 495,000 unsold single-family homes on the market last week, 12% more than last year, including 52,000 new listings not in contract, the most since 2020. |
| INFLATION SPOILS THE PARTY… The three major stock indexes snapped five straight weeks of gains as traders feared that hotter than expected inflation readings would cause the Fed to delay rate cuts until later in the year. In addition to consumer and wholesale prices heading up in January, retail sales and manufacturing fell, while continuing jobless claims rose, indicating that people who are out of work are having a harder time finding a job. Yet University of Michigan Consumer Sentiment edged higher in February, showing consumers are feeling a little better about the economy, and Q4 corporate earnings reports keep coming in better than expected. The week ended with the Dow down 0.1%, to 38,628; the S&P 500 down 0.4%, to 5,006; and the Nasdaq down 1.3%, to 15,776. Inflation-hating bonds fell as well, the 30-Year UMBS 5.5% ending down 0.12, to $99.01. Freddie Mac’s Primary Mortgage Market Survey reported a small rise in the national average 30-year fixed mortgage rate. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information. DID YOU KNOW… Optimal Blue, a mortgage marketing technology firm, saw an encouraging start to 2024, with a seasonal 38% gain in purchase mortgage rate lock volume in January. |
| EXISTING HOME SALES, JOBLESS CLAIMS, FED MINUTES… The holiday-shortened week will give us data on January Existing Home Sales, which are predicted to show a gain over December. Initial Jobless Claims are expected to inch up a bit, but still remain below recession levels. We’ll also see FOMC Minutes from the Fed’s last meet, and look for indications of when rate cuts may begin. |
| Forecasting Federal Reserve policy changes in coming months. Last week’s inflation blip left Wall Street expecting no rate cuts from the Fed until a quarter percent drop in June. Note: In the lower chart, a 10.5% probability of change is an 89.5% probability the rate will stay the same. Current rate is 5.25%-5.50%. AFTER FOMC MEETING ON: CONSENSUS Mar 20 5.25%-5.50% May 1 5.25%-5.50% Jun 12 5.00%-5.25% Probability of change from current policy: AFTER FOMC MEETING ON: CONSENSUS Mar 20 10.5% May 1 35.5% Jun 12 74.2% |
| In business, it’s easy to get caught up focusing on results. Better to focus on the value you can provide your clients. Identify their needs and dreams, then deliver on them. The results you’ll get will likely be way better than you ever expected. |
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.
