Home Sales Take A Holiday Break by Ron Schulz


Brought to you by Ron Schulz




For the week of february 3, 2020




  “Quality is not an act, it is a habit.”–Aristotle, ancient Greek philosopher  





At year end, everyone likes a break, including home buyers, so New Home Sales [em.mediacenternow.com] dipped 0.4% in December. But they still ended up 23.0% ahead of a year ago! Total sales for 2019 hit a post-recession high, 10.8% ahead of 2018.

December also saw fewer buyers sign contracts on existing homes. The Pending Homes Sales [em.mediacenternow.com] index that measures those signings slipped 4.9% after its gain in November, suggesting a January drop in Existing Home Sales.

Good news on prices for buyers. The median price of new homes sold in December rose a mere 0.5% over a year ago. The Case-Shiller Home Price Index of all homes sold is up just 3.5% for the year, down from 5.0%.






UNHEALTHY DEVELOPMENTS… The World Health Organization, the President, and three major airlines took measures to curb the coronavirus, as concerns rose over its global impact on human and economic health, and stocks sank.

The epidemic could cut U.S. economic growth in the first quarter, after the initial read on Q4 GDP reported the economy growing a better-than-expected 2.1%, while unemployment claims fell further.  

The Fed met and left rates alone, happy with the economy though wishing inflation were closer to their 2% target. For the year, Personal Income is up 3.9% and Personal Spending up 5.0%, so, yeah, things look pretty good.

The week ended with the Dow down 2.5%, to 28,256; the S&P 500 down 2.1%, to 3,226; and the Nasdaq down 1.8%, to 9,151.

Another week of coronavirus worries boosted bonds. The 30YR FNMA 4.0% bond ended UP .12, to $104.45. Freddie Mac’s Primary Mortgage Market Survey says the national average 30-year fixed mortgage rate dropped to its second lowest level in three years. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… In the fourth quarter of 2019, the U.S. homeownership rate rose to 65.1%, its highest level in six years, as falling mortgage rates and rising wages helped more Americans finance homes.






MANUFACTURING, SERVICES, JOBS, WAGES ALL HEAD UP… We should see the ISM Manufacturing Index rebound but stay under 50, showing contraction. But the far larger services sector, measured by the ISM Non-Manufacturing Index, is expected to report strong growth, along with January Nonfarm Payrolls and Average Hourly Earnings.

NOTE: Weaker economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.






Forecasting Federal Reserve policy changes in coming months… There is growing sentiment on Wall Street there will be a quarter percent rate cut later this year. We’ll see. Note: In the lower chart, a 23% probability of change is a 77% probability the rate will stay the same.

Current Fed Funds Rate: 1.50%-1.75%

Mar 18 1.50%-1.75%
Apr 29 1.50%-1.75%
Jun 10 1.25%-1.50%


Probability of change from current policy:

Mar 18    23%
Apr 29     43%
Jun 10     59%






  Stay persistent. Never give up, and never ignore a potential opportunity, even if negative thoughts are telling you to give up. There are always ups and downs, but those who are tenacious and do not give up are the ones who succeed.  


  Ron Schulz
Senior Loan Officer
NMLS# 266128

5612 Richmond Ave
Dallas, TX 75206

Office: 214-346-5279
Mobile: 214-794-4014
www.ronschulz.com [em.mediacenternow.com]







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