Market Update For the Week of March 26, 2018

Market Update For the Week of March 26, 2018

Info That Hits Us Where We Live

After heading down two months in a row, Existing Home Sales flew back up in February, increasing 3.3%, to a 5.54 million annual rate. Demand remains strong: 46% of homes sold in less than a month.

New Home Sales were flat in February, off just 0.6%, to a 618,000 annual rate. They’re still up 0.5% from a year ago, and there’s plenty of room for growth: new homes are only 10% of sales, versus 15% before the downturn.

Zillow reports the median monthly rent bumped to $1,445 in February, gaining at the fastest rate in nearly two years. Expect more renters to become buyers.

Business Tip of the Week

Try to be all things to all people and you wind up motivating no one. Target an audience and tell them how you meet their special wants and needs. Go niche and get rich.

Review of Last Week

TRIPLE PLAY… The major stock indexes tumbled, as three big items came into play: 50 million Facebook users had their data mined without their consent, the Fed raised the Funds Rate a quarter point, and the President allowed for tariffs on Chinese goods.

The Facebook scandal incited cries for greater data regulation, which could hurt social media company profits. But the rate hike was expected, and came with the good news that the economic outlook has strengthened.

Trade war worries escalated, even though initial salvos were relatively weak–tariffs on $60 billion of Chinese imports, answered by up to $3 billion in duties on U.S. imports over there. Some say this is just The Art of the Deal, but investors hate not knowing the outcome.

The week ended with the Dow down 5.7%, to 23533; the S&P 500 down 6.0%, to 2588; and the Nasdaq down 6.5%, to 6993.

Tanking stocks did not send lots more investors into bonds, though Treasuries finished the week mostly higher. The 30YR FNMA 4.0%, bond we watch ended the week unchanged, at $102.36. After falling the prior week, national average 30-year fixed mortgage rates held steady in Freddie Mac’s latest 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 reports, “given today’s strong economy, our housing market is well positioned to adopt to rising mortgage rates.” If mortgage rates doubled overnight, their computer model posits “a mere 5% decrease” in sales.

This Week’s Forecast

UP GO PENDING HOME SALES, GDP, CONSUMER SPENDING, INFLATION, MANUFACTURING…  The experts say Pending Home Sales should show a February turnaround, foretelling a gain in existing home sales a few months out. They also expect GDP economic growth, Personal Spending and Core PCE Prices (inflation) to head up, as well as the Chicago PMI gauge of Midwest manufacturing.

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 26 – Mar 30

DateTime (ET)ReleaseForConsensusPriorImpact
Tu
Mar 27
10:00Consumer ConfidenceMar129.5130.8Moderate
W
Mar 28
08:30GDP – Third EstimateQ42.6%2.5%HIGH
W
Mar 28
10:00Pending Home SalesFeb2.5%-4.7%Moderate
W
Mar 28
10:30Crude Inventories03/24NA-2.62MModerate
Th
Mar 29
08:30Initial Unemployment Claims03/24230K229KModerate
Th
Mar 29
08:30Continuing Unemployment Claims03/17NA1.828MModerate
Th
Mar 29
10:00Personal  IncomeFeb0.4%0.4%Moderate
Th
Mar 29
08:30Personal SpendingFeb0.2%0.2%HIGH
Th
Mar 29
08:30Core PCE PricesFeb0.2%0.3%HIGH
Th
Mar 29
09:45Chicago PMIMar62.061.9HIGH
Th
Mar 29
10:00U. of Michigan Consumer Sentiment – FinalMar102.0102.0Moderate

 

Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… Now that the Fed did its first hike of the year, the next one isn’t expected until June. But that one should hold through August at least. Note: In the lower chart, a 2% probability of change is a 98% certainty the rate will stay the same.

Current Fed Funds Rate: 1.25%-1.50%

After FOMC meeting on:Consensus
May 21.50%-1.75%
Jun 131.75%-2.00%
Aug 11.75%-2.00%

 

Probability of change from current policy:

After FOMC meeting on:Consensus
May 2         2%
Jun 13       80%
Aug 1       25%

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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