Housing Market Looking Up In 2020 by Ron Schulz


Brought to you by Ron Schulz




For the week of december 16, 2019




  If the plan doesn’t work, change the plan but never the goal.–Henry Ford, automobile manufacturer  





Online real estate database Zillow [em.mediacenternow.com] forecasts good times in the housing market in 2020, as healthy consumer confidence, job creation, and wage growth are “a recipe for continued economic growth, not a recession.”

Evidence of that consumer confidence was found in Fannie Mae [em.mediacenternow.com]‘s Home Purchase Sentiment Index, up 2.7 points to 91.5 in November and 5.3 points ahead of its strong read in 2018. 

RealPage [em.mediacenternow.com]‘s analysis of the latest data reveals we should get major relief for the housing supply shortage, since residential building permits hit a 12-year high in October, notching an annual rate of 1.46 million units.






UNCERTAINTY LIFTS AND STOCKS DO TOO… Investors hate the unknown, so last week when some uncertainty was lifted around the big issues of Fed rates, Brexit, and international trade deals, stocks shot up to record highs.

The Fed met, left rates alone, and signaled there’d be no further hikes for all of 2020. British Prime Minister Boris Johnson’s Conservative Party won in a landslide, so we should see Brexit by January 31.

With trade, we got a U.S-Mexico-Canada Agreement (USMCA), and Friday the U.S. and China reached a Phase One deal. November data revealed inflation remained indolent and Retail Sales gained less than expected, but still grew.

The week ended with the Dow UP 0.4%, to 28,125; the S&P 500 UP 0.7%, to 3,169; and the Nasdaq UP 0.9%, to 8,735.

A bumpy week in the bond market ended with Treasuries a bit higher. The 30YR FNMA 4.0% bond ended UP .03, to $103.78. Freddie Mac’s Primary Mortgage Market Survey had the national average 30-year fixed mortgage rate up a tick. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… TransUnion reports the housing market will see at least 8.3 million first-time buyers between 2020 and 2022 thanks to low unemployment, record low mortgage rates, and rising wages.  






HOME BUILDING, EXISTING HOME SALES, INFLATION, GDP GAIN… Could be an up week for data. Housing Starts and Existing Home Sales should grow in November. But so might the Core PCE Price Index of inflation, though not rising enough to worry you, us, or the Fed. Best gain of all could be the Q3 GDP-Third Estimate, expected to hit 2.1%.

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… After last week’s meeting, the Fed Funds futures market expects rates to hold where they are for all of next year. We’ll see. Note: In the lower chart, a 0% probability of change is a 100% 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     0%
Mar 18     9%
Apr 29    19%






  Always write down your new business action items–phone calls, face-to-face meetings, and follow-ups to prospects, customers, and referral partners. Then, every day, devote up to two hours to prospecting and watch your business grow.  


  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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