Existing Home Sales Bounce Back by Ron Schulz



Brought to you by Ron Schulz




For the week of january 27, 2020




  “Strive for progress, not perfection.”–Anonymous  





After slumping in November, Existing Home Sales [em.mediacenternow.com] rebounded in December, up 3.6% for the month, jumping decisively over the 5.5 million unit annual rate threshold, 10.8% higher than a year ago.

Putting the brakes on sales are low inventories in many areas. But builders are responding, with units under construction rising to post-recession highs. As folks go for the new builds, more existing homes become available.

Plus, price growth keeps slowing. The FHFA [em.mediacenternow.com] index of prices for homes bought with conforming mortgages rose just 0.2% in November. Prices are now up 4.9% the past year, versus a 6.0% gain the year before.






BULLS TAKE A BREATHER… Stocks have put on a strong performance since the start of the year, but the bulls rested during the holiday shortened week, as investors took profits, nudging all three major indexes down.

Fears roiled around the coronavirus outbreak in China, which could also infect travel and trade, trimming global economic growth. As a result, oil prices saw their worst drop in a year, anticipating lower fuel demand. 

The coronavirus story isn’t over yet, but past viral outbreaks in the world have not significantly hurt economies or markets. Positive investor sentiment emerged as two thirds of corporate earnings reports so far have beaten estimates.

The week ended with the Dow down 1.2%, to 28,990; the S&P 500 down 1.0%, to 3,295; and the Nasdaq down 0.8%, to 9,315.

Viral outbreak concerns made the bond market healthy. The 30YR FNMA 4.0% bond ended UP .08, to $104.33. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage hit its lowest level in three months. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… For 2019, 5.341 million existing homes were sold, precisely matching 2018. But sales are nearly fully recovered from their 2018 dip, and analysts expect them to hit new post-recession highs heading into 2020.






HOME SALES UP, CONSUMERS HEALTHY, GDP AND RATES HOLD… This week’s slew of economic data should report New and Pending Home Sales on the rise, and Personal Income and Spending showing consumers in good shape. Economists forecast Q4 GDP still around 2% and inflation in check, making the FOMC Rate Decision a non-event at the Fed.

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 meets this week, but the Fed Funds Futures market is betting nothing will change with rates. Note: In the lower chart, a 13% probability of change is an 87% 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    13%
Mar 18     19%
Apr 29     28%






  Look beyond traditional methods for creative ways to streamline your business and make it grow. Thinking outside the box about operations and lead generation can give you a real edge on the competition!  


  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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