| “Drawing on my fine command of the English language, I said nothing.”—Robert Benchley, American humorist and movie actor |
| Sales of existing homes in January scored a 3.1% gain over December. The National Association of Realtors saw this as “the start of more supply and demand,” with total inventory up 2.0% from December and 3.1% from a year ago. Altos Research reports that just under 50,000 new listings came onto the market last week, 16% more than the same week a year ago. Altos notes that each week, the percentage gains keep improving versus a year ago. Homebuilding data provider Zonda has acquired NewHomeSource.com, the largest portal for new home listings, and home design platform Envision. The goal is to provide online buyers with “a far more dynamic experience.” |
| BACK TO RECORD HIGHS… Four days of trading in a holiday-shortened week was more than enough time for traders to send the Dow and the S&P 500 to new record highs, and the Nasdaq to a strong weekly performance. As usual, all was not perfect. The Leading Economic Index fell 0.4% in January following its 0.2% drop in December. And FOMC Minutes from the Fed’s last meet did not offer much insight into when rate cuts might start. Yet a couple of Fed officials did say rate cuts were coming, just not right away. The big spark came from strong Q4 corporate earnings reports, spearheaded by an AI chip maker that’s facing insatiable demand for its products. The week ended with the Dow UP 1.3%, to 39,132; the S&P 500 UP 1.7%, to 5,089; and the Nasdaq UP 1.4%, to 15,997. As money flowed to stocks, bond prices slipped, the 30-Year UMBS 5.5% ending down 0.84, at $98.17. The national average 30-year fixed mortgage rate edged up last week in Freddie Mac’s 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’s Home Price Index showed home prices up 0.3% in January. But their chief economist is confident the rate of gains is cooling, as “the pace of annualized home price appreciation peaked in December.” |
| NEW AND PENDING HOME SALES, CONSTRUCTION SPENDING, INFLATION… Forecasts call for upward movement in January for both New Home Sales and the Pending Home Sales index of signed contracts on existing homes. Construction Spending should also gain overall, and we’ll watch the residential part. The Fed’s favorite inflation read, PCE Prices, is predicted to still be a bit of a distance away from the central bank’s target. |
| Forecasting Federal Reserve policy changes in coming months. The most optimistic Fed watchers do not expect the central bank’s first rate cut to come until June. Note: In the lower chart, a 2.5% probability of change is a 97.5% 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 2.5% May 1 19.9% Jun 12 68.2% |
| Avoid pressuring prospects. Truth is, the less you try to sell people, the more they’ll want to buy from you. When folks don’t feel pressured, they can think about what’s best for them, then decide to buy, if you’ve done a good job of telling them the benefits. |
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