| QUOTE OF THE WEEK |
| “Don’t talk about yourself; it will be done when you leave.”—Wilson Mizner, American playwright, raconteur, and entrepreneur |
| NATIONAL MARKET UPDATE |
| After a June gain, the Pending Home Sales Index of signed contracts on existing homes slipped in July. But first-time buyers are returning to the market, as pending sales of starter homes rose 10.2% over last year. Case-Shiller national home prices edged up in June but slowed to a 5.4% yearly gain. The FHFA index of prices for homes with conventional mortgages ticked down in June and saw its third straight slowdown in quarterly growth. The Mortgage Bankers Association noted weekly “mortgage applications were slightly higher, driven by marginally stronger purchase activity. Refinance applications were essentially unchanged but are still 85% higher than last year.” |
| REVIEW OF LAST WEEK |
| LABOR DAZE… There was enough good news to give traders hope the economy is headed for a soft landing, but light participation in front of Labor Day left the indexes mixed, with the Dow hitting a new high. Negative vibes came from July Durable Goods Orders showing business spending was soft in July and Consumer Confidence indicating consumers are starting to have labor market concerns, which could curtail their spending. For now, though, consumer spending jumped a healthy 0.5% in July, while core PCE Prices left inflation unchanged, up 2.6% year-over-year, bolstering the market’s view we’ll avoid a hard landing and get a rate cut this month. The week ended with the Dow UP 0.9%, to 41,563; the S&P 500 UP 0.2%, at 5,648; and the Nasdaq down 0.9%, to 17,714. Bonds slumped slightly, though the 30-Year UMBS 5.5% edged UP 0.02, to $100.26. Due to expectations of a Fed rate cut, the national average 30-year fixed mortgage rate fell again 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… Attom reports Q2 saw a 23.2% increase in residential mortgage originations over the prior quarter—the first quarterly increase in a year—with purchase loan originations gaining a solid 32.7%. |
| THIS WEEK’S FORECAST |
| CONSTRUCTION SPENDING, MANUFACTURING, SERVICES, JOBS… Builders are expected to push overall Construction Spending back up in July, and we’ll monitor the residential part. ISM Manufacturing should show that sector still contracted in August, while ISM Non-Manufacturing should report the dominant services sector expanded at a slower pace. Predictions are for August Nonfarm Payrolls to post another modest gain, with the Unemployment Rate still above 4%. All U.S. financial markets were closed yesterday, September 2, in observance of Labor Day. |
| FEDERAL RESERVE WATCH |
| Forecasting Federal Reserve policy changes in coming months. The consensus in the futures market is for a quarter percent rate cut in September, a half percent in November, and a quarter percent in December. Note: In the lower chart, the 100.0% probability of change is a 0.0% probability the rate will stay the same. Current rate is 5.25%-5.50%. AFTER FOMC MEETING ON: CONSENSUS Sep 18 5.00%-5.25% Nov 7 4.50%-4.75% Dec 18 4.25%-4.50% Probability of change from current policy: AFTER FOMC MEETING ON: CONSENSUS Sep 18 100.0% Nov 7 51.3% Dec 18 69.5% |
| BUSINESS TIP OF THE WEEK |
| It’s not what you tell prospects and clients that matters, it’s what you ask them. That’s how you’ll find out their challenges, hopes, and dreams, build trust, and make sure the conversation is more about them, not you. |
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.
