|For the week of April 24, 2017 – Vol. 15, Issue 16|
>> Market Update
QUOTATION OF THE WEEK… “I don’t set trends. I just find out what they are and exploit them.” –Dick Clark, American radio and TV personality
INFO THAT HITS US WHERE WE LIVE … A good trend for us to exploit is the upward trend that continues in home building. That may seem like a far-fetched statement if all you saw was the headline number for March Housing Starts–down 6.8%. But wait. That’s coming off their big February boost thanks to unusually mild weather–plus, the March Housing Starts 1.215 million unit annual rate is UP 9.2% over a year ago. Want more proof of the upward trend? New Building Permits were UP 3.6% in March, with single-family permits UP 13.5% versus a year ago. No wonder April’s National Association of Home Builders sentiment index sits at a solid 68.
Friday we learned that Existing Home Sales were UP 4.4% in March, hitting a 5.71 million annual rate, their highest pace in more than a decade! This puts those sales 5.9% ahead of where they were a year ago. Demand was so strong that 48% of the existing homes sold were on the market less than a month. Reflecting this trend, the Potential Home Sales model from a provider of settlement services shows the housing market performing 47% better than last year. Their chief economist said the model measures what “a healthy market level of home sales should be, based on the economic, demographic, and housing market environments.”
BUSINESS TIP OF THE WEEK… Want to jump-start your efforts? Double your goals. That will take you outside of your comfort zone and bring out your best.
>> Review of Last Week
PARLEZ-VOUS ‘TAX CUT’?… Do you speak ‘tax cut’? Treasury Secretary Steven Mnuchin and White House chief economic advisor Gary Cohn did last week, and their talk of impending tax cuts sent the stock market up. But they didn’t speak French, uttering not a word about France’s presidential election. Smart move, as investors worry that two of the top four candidates in the first round want France to leave the European Union, not a popular idea on Wall Street. But Friday President Trump revealed he’d release a “massive tax cut package” this week and that was enough to push the three major stock indexes ahead for the five days of trading.
The week ended with the Dow UP 0.5%, to 20548; the S&P 500 UP 0.8%, to 2349; and the Nasdaq UP 1.8%, to 5911.
U.S. Treasuries and other bonds made small gains, as investors shored up their safe harbor positions before those pesky French elections. The 30YR FNMA 4.0% bond we watch finished the week down .06, at $105.33. National average 30-year fixed mortgage rates dropped again in Freddie Mac’s Primary Mortgage Market Survey for the week ending April 20. This time they hit their lowest mark since November of last year. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?… A provider of loan origination software reports that the average time to close a loan is now at its lowest level in two years–43 days.
>> This Week’s Forecast
NEW HOME SALES DIP, EMPLOYMENT COSTS UP, MANUFACTURING GROWS… We’ll get a look at March New Home Sales, which are predicted to slip a bit, remaining just south of the 600,000 units per year threshold. The Employment Cost Index is expected to edge up, good for wage growth (and housing!), though the Fed also sees that as an indicator of rising inflation, with rates eventually doing the same. The Chicago PMI is forecast to show Midwest manufacturing still growing at a nice pace.
>> 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 Apr 24 – Apr 28
>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months… Economists expect the Fed to keep rates where they are in May, but there’s a better than even chance we’ll see a quarter percent hike in July. Note: In the lower chart, a 5% probability of change is a 95% certainty the rate will stay the same.
Current Fed Funds Rate: 0.75%-1.0%
Probability of change from current policy:
Senior Loan Officer
13140 Coit Rd # 502
Dallas, TX 75240
This is an advertisement for Ron Schulz. 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 Supreme Lending 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 Supreme Lending. EVERETT FINANCIAL, INC. D/B/A SUPREME LENDING NMLS ID #2129 (www.nmlsconsumeraccess.org) 14801 Quorum Dr., #300, Dallas, TX 75254. 877-350-5225. Copyright © 2017. This is not an offer to enter into an agreement. Information, rates, & programs are subject to change without prior notice and may not be available in all states. All products are subject to credit & property approval. Supreme Lending is not affiliated with any government agency. Supreme Lending is required to disclose the following license information: AZ Mortgage Banker License 0925918, AZ Principal Office: 25030 S 190th Street, Queen Creek, AZ 85142. Licensed by the Department of Business Oversight under the CA Residential Mortgage Lending Act License 4130655. CO Mortgage Company – Regulated by the Division of Real Estate. GA Mortgage Lender License 22114– Georgia Residential Mortgage Licensee. IL Residential Mortgage License MB.6760323-DBA1– Illinois Residential Mortgage Licensee. NV Division of Mortgage Lending Mortgage Banker License 4063. Licensed by the N.J. Department of Banking and Insurance – New Jersey Residential Mortgage Lender License. Licensed Mortgage Banker-NYS Department of Financial Service. NY Mortgage Banker License B501049. OR Mortgage Lending License ML-4265. Licensed Mortgage Banker by the PA Department of Banking – Pennsylvania Mortgage Lender License 45048. Rhode Island Licensed Lender 20142998LL. TX – SML Mortgage Banker Registration – Residential Mortgage Loan Originator.