Home Sales Ignite by Ron Schulz

 

Brought to you by Ron Schulz

 

 

   

For the week of march 2, 2020

 

 

QUOTE OF THE WEEK

 
  “Obstacles are the cost of greatness.”–Robin Sharma, Canadian author and speaker  

 

   

NATIONAL MARKET UPDATE

 
   

What a week for home sales data! New Home Sales [em.mediacenternow.com] spiked 7.9%, to a 764,000 annual rate in January, the hottest sales pace since 2007. Single-family home sales are now a healthy 18.6% higher than a year ago.

For existing homes, the National Association of Realtors index of Pending Home Sales [em.mediacenternow.com] rose 5.2% in January, “due to the good economic backdrop and exceptionally low mortgage rates,” according to their chief economist.

Yet price gains continue to slow. The FHFA [em.mediacenternow.com] price index for homes bought with conforming mortgages is up 5.1% annually, down from 5.9% a year ago, and the Case-Shiller price index is up only 3.8% from a year ago.

 

 

   

REVIEW OF LAST WEEK

 
   

BUSY TIME FOR BUFFET… Legendary investor Warren Buffet says he buys when everyone’s selling, so he must have been very busy last week, as the Dow, S&P 500, and Nasdaq suffered their worst weekly selloffs in a decade. 

These were totally motivated by growing uncertainty about how far the coronavirus will spread and how soon it will be brought under control. We all care about the human impact, investors the economic impact as well.

Meanwhile, inflation was subdued in the Core PCE Prices read, and Q4 GDP stayed at a decent 2.1%. Personal Income rose strongly and University of Michigan Consumer Confidence came in just short of its expansion peak.

The week ended with the Dow down 12.4%, to 25,409; the S&P 500 down 11.5%, to 2,954; and the Nasdaq down 10.5%, to 8,567.

An avalanche of flight to safety trades powered bonds to monster gains. The 30YR FNMA 4.0% bond ended UP .46, at $105.27. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate fell back to its three-year low. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… First American’s chief economist tells us, “In 2020, 4.8 million millennials will turn 30–the peak age for home buying…fortunate to be entering the housing market at a time of historically low mortgage rates and a strong economy.”

 

 

   

THIS WEEK’S FORECAST

 
   

MANUFACTURING, SERVICES SECTORS GROW, SO DO JOBS… Both sectors of the economy keep expanding, as the ISM Manufacturing and ISM Non-Manufacturing indexes should remain north of 50. Nonfarm Payrolls are also expected to grow to just south of the 200,000 mark, with Average Hourly Earnings also predicted to rise.

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… Fed Chair Powell said economic fundamentals “remain strong,” but the central bankers are “closely monitoring” coronavirus developments and will “act…to support the economy.” The market sees a 0.50% Fed rate cut this month and another 0.25% in April. Note: In the lower chart, a 100% probability of change is a 0% probability the rate will stay the same.

Current Fed Funds Rate: 1.50%-1.75%

AFTER FOMC MEETING ON: CONSENSUS
Mar 18 1.00%-1.25%
Apr 29 0.75%-1.00%
Jun 10 0.75%-1.00%

 

Probability of change from current policy:

AFTER FOMC MEETING ON: CONSENSUS
Mar 18    100%
Apr 29     75%
Jun 10     46%

 

 

 

   

BUSINESS TIP OF THE WEEK

 
  Working more does not increase our productivity, it diminishes it. As we work, we tire–even more so if we’re behind in our sleep. So we lose valuable mental resources, and wind up taking more time to accomplish less.   

 

  Ron Schulz
Senior Loan Officer
NMLS# 266128

5612 Richmond Ave
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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