| QUOTE OF THE WEEK |
| “Liberty, when it begins to take root, is a plant of rapid growth.”—George Washington, American Founding Father, military officer, and first president of the United States |
| NATIONAL MARKET UPDATE |
| Following back-to-back monthly gains, New Home Sales declined in May. But good news for buyers, total new home inventories hit a new post-pandemic high, and the median sales price is now 9.3% below its 2022 peak. The Pending Home Sales index of signed contracts on existing homes dipped in May. But the National Association of Realtors noted, “supply and demand movements suggest easing home price appreciation in upcoming months.” That easing is already happening. The FHFA’s Home Price Index noted “the appreciation rate slowed in April,” while Case-Shiller reported their home price index “has decelerated from the start of the year.” |
| REVIEW OF LAST WEEK |
| AHEAD AT THE HALF… For the week, two of the major stock indexes ended a tick down, one a tick up, but all three finished well ahead for the first half of the year, the Dow up 3.8%, the S&P 500 up 14.5%, and the Nasdaq up 18.1%! Investor optimism has been fueled by hopes the Fed’s elevated rates would slow the economy to a “soft landing” without a recession, and bring down inflation, so the central bank could then start cutting rates. Evidence of moderating inflation came with May PCE Prices. A slowing economy was seen with continuing jobless claims the highest since 2022, while the case for a soft landing was supported by increased consumer spending. The week ended with the Dow down 0.1%, to 39,119; the S&P 500 down 0.1%, to 5,460; and the Nasdaq UP 0.2%, to 17,733. Bond prices fell overall, though the 30-Year UMBS 6.0% finished UP 1.11, at $100.17. Freddie Mac’s Primary Mortgage Market Survey reported the national average 30-year fixed mortgage rate continued down, “hitting the lowest level in almost three months.” Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information. DID YOU KNOW… Flippers are seeing better returns. ATTOM Data reports that in Q1 this year, a typical flip at the national level netted $72,375, up from $65,000 in the prior quarter, and closing in on the 2022 peak of $80,000. |
| THIS WEEK’S FORECAST |
| CONSTRUCTION SPENDING, FED MINUTES, JOBS… May Construction Spending is expected to be up a bit overall, and we’ll keep any eye on the residential part. We’ll also check the FOMC Minutes from the Fed’s last meet for signs of when the first rate cut could happen. Friday’s May jobs report should show some weakening in the labor market, with new Nonfarm Payrolls drifting under 200,000 and the Unemployment Rate at 4.0%. All U.S. financial markets will close early on Wednesday, July 3, and will be closed Thursday, July 4, in observance of Independence Day. |
| FEDERAL RESERVE WATCH |
| Forecasting Federal Reserve policy changes in coming months. Wall Street sees a rate hold in July, then a cut in September. November is a toss-up. Some analysts think we could see another cut, others a hike back up, but the biggest expectation is for a hold. Note: In the lower chart, the 12.9% probability of change is an 87.1% probability the rate will stay the same. Current rate is 5.25%-5.50%. AFTER FOMC MEETING ON: CONSENSUS Jul 31 5.25%-5.50% Sep 18 5.00%-5.25% Nov 7 5.00%-5.25% Probability of change from current policy: AFTER FOMC MEETING ON: CONSENSUS Jul 31 12.9% Sep 18 62.6% Nov 7 52.9% |
| BUSINESS TIP OF THE WEEK |
| When you’re having success, don’t rest on your laurels. Keep growing, learning, and finding ways to serve your clients better. Enjoy your success but remember, your capacity to serve others hasn’t maxed out. Even more success is yet to come! |
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.
