Market Update For the Week of March 12, 2018

Market Update For the Week of March 12, 2018

Info That Hits Us Where We Live

CoreLogic reports January home prices gained 6.6% annually, noting: “Entry-level homes have been in particularly short supply, leading to more rapid home-price growth compared with more expensive homes.”

Yet Trulia says affordability has grown. They found that today, the median household can afford a home that’s 1.5 times more expensive than the median home price, while in 1980, that household could only afford a home that was about 75% of the median price.

The difference lies with today’s historically low mortgage rates. Trulia reports that at today’s income levels, mortgage rates would have to reach 9.4% before the median home price became unaffordable nationally.

Business Tip of the Week

Trust your gut. Your instincts usually let you know when something is a good, or a bad, idea. To access your instincts, simply sit quietly and listen to yourself.

Review of Last Week

Tariff and trade war worries evaporated after investors were blind-sided by a blockbuster February jobs number–313,000 new Nonfarm Payrolls. The blue-chip Dow shot back up over 25,000 and the tech-y Nasdaq catapulted to a new record high.

That unexpectedly large jobs total was reported as “a reflection of the strongest labor market in two decades.” Party poopers pooh-poohed the 0.1% gain in hourly wages, but those are still up 2.6% for the year, and that’s not counting bonus and commission income.

Thursday, the President signed a proclamation for tariffs on steel and aluminum. But he exempted Canada and Mexico and left open possible exemptions for other countries willing to renegotiate current deals. Investors liked that, though not as much as Friday’s jobs report.

The week ended with the Dow UP 3.3%, to 25336; the S&P 500 UP 3.5%, to 2787; and the Nasdaq UP 4.2%, to 7561.

In the bond market, Treasuries finished modestly lower, but the 30YR FNMA 4.0%, bond we watch ended the week unchanged, at $102.38. In Freddie Mac’s latest Primary Mortgage Market Survey, national average 30-year fixed mortgage rates edged up for the ninth week in a row. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

Did You Know?

The New York Fed reports mortgage debt increased by $139 billion the last quarter, but still remains 4.4% below its peak level. So, more recovery to come.

This Week’s Forecast

February Housing Starts are forecast off a tad, just under the 1.3 million mark. Analysts predict inflation has slowed, gauged by the February Consumer Price Index (CPI). But Retail Sales are expected to show growth, along with manufacturing, according to the Philadelphia Fed Index and other key factory measures.

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 12 – Mar 16

M
Mar 12
14:00Treasury BudgetFeb-$216.0B-$192.0BModerate
Tu
Mar 13
08:30Consumer Price Index (CPI)Feb0.2%0.5%HIGH
Tu
Mar 13
08:30Core CPIFeb0.2%0.3%HIGH
W
Mar 14
08:30Retail SalesFeb0.3%-0.3%HIGH
W
Mar 14
08:30Retail Sales ex-autoFeb0.4%0.0%HIGH
W
Mar 14
08:30Producer Price Index (PPI)Feb0.1%0.4%Moderate
W
Mar 14
08:30Core PPIFeb0.2%0.4%Moderate
W
Mar 14
10:00Business InventoriesJan0.6%0.4%Moderate
W
Mar 14
10:30Crude Inventories03/10NA+2.4MModerate
Th
Mar 15
08:30Initial Unemployment Claims03/10226K231KModerate
Th
Mar 15
08:30Continuing Unemployment Claims03/03NA1.870MModerate
Th
Mar 15
08:30Empire Manufacturing IndexMar15.013.1Moderate
Th
Mar 15
08:30Philadelphia Federal IndexMar23.725.8HIGH
F
Mar 16
08:30Housing StartsFeb1.283M1.326MModerate
F
Mar 16
08:30Building PermitsFeb1.330M1.396MModerate
F
Mar 16
09:15Industrial ProductionFeb0.3%-0.1%Moderate
F
Mar 16
09:15Capacity UtilizationFeb77.7%77.5%Moderate
F
Mar 16
10:00U. of Michigan Consumer Sentiment Index – Prelim.Mar99.599.7Moderate

 

Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… A week from this Wednesday, the Fed futures market expects the first rate hike of the year. But a second one isn’t seen until June. Note: In the lower chart, an 89% probability of change is an 89% certainty the rate will move higher.

Current Fed Funds Rate: 1.25%-1.50%

After FOMC meeting on:Consensus
Mar 211.50%-1.75%
May 21.50%-1.75%
Jun 131.75%-2.00%

 

Probability of change from current policy:

After FOMC meeting on:Consensus
Mar 21       89%
May 2       16%
Jun 13       77%

Statistics source: www.markettrends.com

Material in this article from: Inside Lending Market Snapshot

This is an advertisement for Jim Passi. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in this message is the property of Citywide Home Loans and cannot be reproduced for any use without prior written consent. This message is intended for business professionals only and is not intended for distribution to consumers or other third parties. The material does not represent the opinion of Citywide Home Loans. Citywide CO NMLS #67180. Regulated by the Division of Real Estate.

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