More People Ready To Buy — And Sell by Ron Schulz

 

 

Brought to you by Ron Schulz

 

 

   

For the week of january 13, 2020

 

 

QUOTE OF THE WEEK

 
  “If it isn’t a little scary, it probably isn’t worth your time.”–Ted Murphy, American entrepreneur   

 

   

NATIONAL MARKET UPDATE

 
   

Fannie Mae [em.mediacenternow.com]‘s Home Purchase Sentiment Index rose in December, close to its record high. Of those surveyed, 59% say it’s a good time to buy, up 16% versus a year ago, while 65% think it’s a good time to sell, up 7% from last year.

 

The Fed [em.mediacenternow.com]‘s Flow of Funds report pegged the value of all owner-occupied homes at a record $29.2 trillion in Q3, 21% higher than the peak reached in 2006. But prices rose at a slower pace than the year before.

Freddie Mac’s chief economist: “The drop in mortgage rates, combined with the strong labor market, should propel a continued rise in buyer demand.” Hey, November home builder confidence hit its second highest level of 2019.

 

 

   

REVIEW OF LAST WEEK

 
   

NOT SO BAD, NOT SO GOOD… The Iran affair turned out not so bad, with no U.S. casualties and Washington’s restrained response, so stocks hit new records. Friday, jobs numbers came in not so good, though equities ended ahead for the week.

December’s 145,000 new Nonfarm Payrolls were slightly less than expected and wages gained just 0.1%. But they’re up 2.9% the past year, still growing faster than prices, and the tight labor market should boost earnings this year. 

Manufacturing’s been off, but the far larger service sector keeps solidly growing, the ISM Non-Manufacturing index up to 55.0 in December. And get this. The U.S. in November was a net petroleum exporter for the third month in a row!

The week ended with the Dow UP 1.0%, to 28,910; the S&P 500 UP 0.9%, to 3,265; and the Nasdaq UP 1.8%, to 9,179.

The lower than expected December jobs numbers spiked bonds. The 30YR FNMA 4.0% bond ended UP .16, to $104.22. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate fell to a three-month low. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… Americans paid an average of $123 per square foot for a home in 2019, but that varied widely by location. Realtor.com [em.mediacenternow.com] reports that the price per square foot in cities ranged from $42 to more than $1,000.

 

 

   

THIS WEEK’S FORECAST

 
   

HOME BUILDING EDGES UP, INFLATION GOOD, RETAIL BETTER… Economists expect to see continued growth in Housing Starts and Building Permits for December. Consumer Price Index (CPI) inflation should hold near the Fed’s target range, while Retail Sales are predicted to show healthy consumer spending.

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… The futures market is pretty sure rates will stay where they are for the year, but a few traders expect a cut, a few a hike. Note: In the lower chart, a 10% probability of change is a 90% probability the rate will stay the same.

Current Fed Funds Rate: 1.50%-1.75%

AFTER FOMC MEETING ON: CONSENSUS
Jan 29 1.50%-1.75%
Mar 18 1.50%-1.75%
Apr 29 1.50%-1.75%

 

Probability of change from current policy:

AFTER FOMC MEETING ON: CONSENSUS
Jan 29    10%
Mar 18     14%
Apr 29    22%

 

 

 

   

BUSINESS TIP OF THE WEEK

 
  A positive attitude is key. Wake up thinking about all the things going well in your life. Put the day’s least appealing task at the top of the to-do list to get it out of the way. If you have a setback, focus on what you learned. Celebrate all successes, even the small ones.  

 

  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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