Builder Confidence At A 20-Year High by Ron Schulz



Brought to you by Ron Schulz




For the week of december 23, 2019




  Appreciation can change a day, even change a life. Your willingness to put it into works is all that is necessary.–Margaret Cousins, Indian-Irish poet  





In December, the National Association of Home Builders confidence index hit its highest level since 1999. Builders are clearly more optimistic, as mortgage rates dropped while wages are now growing near the fastest pace in a decade.

More evidence of builder confidence was seen in Housing Starts [], 13.6% ahead of a year ago. The three-month average of single-family starts reached a post-recession high, along with total and single-family permits. 

Existing Home Sales [] rose 2.7% annually, but dipped 1.7% for November. The NAR chief economist noted, “inventory levels are low, but the economy is otherwise performing very well with more than 2 million job gains in the past year.”






ECONOMIC OUTLOOK SENDS STOCKS TO RECORD HIGHS… Wall Streeters pushed the S&P 500 past the 3,200 milestone and the Dow and the Nasdaq into new record territory on encouraging economic data.

The housing reports covered above were just the start. Industrial production scored its biggest monthly gain in two years. And personal goods consumption grew during 2019 at the fastest annualized pace in 15 years. 

The Q3 GDP-third estimate held at a decent  2.1% growth, while consumers upped their spending in November at the fastest rate in four months. Small wonder, as personal income is up 4.9%, but inflation only 1.6%, in the past year.

The week ended with the Dow UP 1.2%, to 28,455; the S&P 500 UP 1.7%, to 3,221; and the Nasdaq UP 2.2%, to 8,925.

Treasuries finished the week down, but other bonds held up despite surging stocks. The 30YR FNMA 4.0% bond ended UP .10, to $103.88. The national average 30-year fixed mortgage rate was unchanged in Freddie Mac’s 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?… Consumer debts relative to assets are the lowest since 1984. Thanks to a solid economy, people can pay their debts on time. Experian [] reports this has pushed credit scores to their highest level in eight years!






NEW HOME SALES GROW… In a thin week of economic reports, it’s expected that New Home Sales for November will post around a 735,000 unit annual rate.

We wish you and yours all the best this holiday season! Tuesday, December 24, stock markets will close at 1 p.m. and the bond market at 2. All financial markets will be closed Wednesday, Christmas Day. 

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… The Fed says rates should stay where they are for all of next year and the Fed Funds futures market agrees. Note: In the lower chart, a 4% probability of change is a 96% probability the rate will stay the same.

Current Fed Funds Rate: 1.50%-1.75%

Jan 29 1.50%-1.75%
Mar 18 1.50%-1.75%
Apr 29 1.50%-1.75%


Probability of change from current policy:

Jan 29     4%
Mar 18     8%
Apr 29    15%






  Studies show that simply putting your goals for next year in writing increases your chances of achieving them exponentially. And forget comfortable, “can’t-miss” goals. Get out of your comfort zone and reach for the stars!  


  Ron Schulz
Senior Loan Officer
NMLS# 266128

5612 Richmond Ave
Dallas, TX 75206

Office: 214-346-5279
Mobile: 214-794-4014 []







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