New and Existing Homes Sales Take a Break by Ron Schulz

 

 

Brought to you by Ron Schulz

 

 

   

For the week of october 28, 2019

 

 

QUOTE OF THE WEEK

 
  Success consists of going from failure to failure with no loss of enthusiasm.–Winston Churchill  

 

   

NATIONAL MARKET UPDATE

 
   

Some pundits prefer to ignore the fact that housing data is volatile month-to-month. So we saw talking heads wringing their hands over September New Home Sales [em.mediacenternow.com], down 0.7%, and Existing Home Sales [em.mediacenternow.com], off 2.2%.

Calmer souls reminded us to check the trends. New home sales are up 15.5% over a year ago, at a 701,000 unit annual rate–and they have fully reversed the decline in the 12-month sales average, now at a post-recession high. 

Existing Home Sales are up 3.9% versus a year ago, and both reports came off strong August gains. Not good that year-over-year inventories fell four months, but great that the median sale price of new homes is down 8.8% from a year ago.

 

 

   

REVIEW OF LAST WEEK

 
   

GOOD THINGS COME IN THREES… Investor optimism sent stocks up for the third week in a row for three good reasons: progress in U.S.-China trade talks, upbeat corporate earnings, and a looming Fed rate cut.

U.S. Trade Rep Lighthizer and Treasury Secretary Mnuchin said they were close to finalizing parts of a Phase One trade deal with China, 78% of S&P 500 companies reporting earnings beat expectations, and the Fed is poised for a rate drop.

The final U. of Michigan Index of Consumer Sentiment bested September’s read, showing positive consumer feelings held up just fine in October, as income and job growth drowned out other distractions.

The week ended with the Dow UP 0.7%, to 26,958; the S&P 500 UP 1.2%, to 3,023; and the Nasdaq UP 1.9%, to 8243.

Bonds were on sale, as prices dropped when investors flocked to stocks on the positive trade news. The 30YR FNMA 4.0% bond ended down .08, at $103.56.  The national average 30-year fixed mortgage rate crept up in Freddie Mac’s Primary Mortgage Market Survey, yet stayed more than 1% lower than a year ago. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… The National Association of Realtors reports about three quarters of buyers found their homes on their phones, and the typical buyer contacted an agent and saw 10 homes in 10 weeks before purchasing.

 

 

   

THIS WEEK’S FORECAST

 
   

PENDING HOME SALES, INCOMES, GDP, JOBS GROW; MANUFACTURING SLOWS; THE FED CUTS… The Pending Home Sales index of contracts signed on existing homes should report growth, along with Personal Income, Q3 GDP, and September Nonfarm Payrolls. The nationwide ISM Manufacturing index and the Midwest Chicago PMI are forecast to show factory activity slowing, but the Fed’s expected rate cut could help.

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.

 

 

   

FEDERAL RESERVE WATCH

 
   

Forecasting Federal Reserve policy changes in coming months… Wall Street remains near certain of a Fed rate cut on Wednesday, but there should be no more moves through the start of the year. Note: In the lower chart, a 93% probability of change is only a 7% probability the rate will stay the same.

Current Fed Funds Rate: 1.75%-2.00%

AFTER FOMC MEETING ON: CONSENSUS
Oct 30 1.50%-1.75%
Dec 11 1.50%-1.75%
Jan 29 1.50%-1.75%

 

Probability of change from current policy:

AFTER FOMC MEETING ON: CONSENSUS
Oct 30    93%
Dec 11    28%
Jan 29    45%

 

 

 

   

BUSINESS TIP OF THE WEEK

 
  Inspiration creates motivation. Find people to emulate. Set goals you are dying to achieve. Picture the life you would love to live. These things give you the energy to go for it!  

 

  Ron Schulz
Senior Loan Officer
NMLS# 266128

6060 North Central Exp #462
Dallas, TX 75206

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

 

   

 

[em.mediacenternow.com]

 

   

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