Pending Home Sales Bounce Back by Ron Schulz

 

 

Brought to you by Ron Schulz

 

 

   

For the week of january 6, 2020

 

 

QUOTE OF THE WEEK

 
  “Only a fool trips on what’s behind them.”–Ray Lewis, former American professional football player  

 

   

NATIONAL MARKET UPDATE

 
   

After the drop in October, Pending Home Sales [em.mediacenternow.com] gained 1.2% in November, up 7.4% year-over-year. The NAR said, “favorable conditions are expected throughout 2020…but supply is not yet meeting healthy demand.”

That demand was quite evident as home showings increased in November for the fourth month in a row according to the ShowingTime [em.mediacenternow.com] Showing Index, which reported a 12.6% year-over-year boost in traffic.

October’s S&P CoreLogic Case-Shiller Home Price Index gained 3.3% year-over-year. The managing director at S&P Dow Jones Indices added, “U.S. housing data continue to be reassuring.”

 

 

   

REVIEW OF LAST WEEK

 
   

RISING TENSIONS LOWER STOCKS… Stocks sank Friday after U.S. forces killed the general who ran Iran’s extraterritorial operations. But this followed record highs on Thursday, so the three major indexes ended the week little changed.

Investors also didn’t much like Friday’s ISM Manufacturing Index, still below 50, indicating contraction. But manufacturing will be helped by the Fed’s low rate stance and the Phase One China trade deal to be signed January 15. 

We also got the news construction spending was up overall in November, October’s numbers were revised upward, and residential construction spending went up the most, with single-family construction the main driver.

The week ended with the Dow flat (down just 10 points), at 28,635; the S&P 500 down 0.2%, to 3,235; but the Nasdaq UP 0.2%, to 9,021.

While stocks slipped, bonds finished the week firmly higher. The 30YR FNMA 4.0% bond was UP .11, to $104.06. The national average 30-year fixed mortgage rate fell slightly 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?… The New York Fed [em.mediacenternow.com] reports the average annual salary for full-time workers rose to a record high $69,181 in November, in the strongest job market in five decades. This supports real estate demand, with more buyers qualifying for mortgages.

 

 

   

THIS WEEK’S FORECAST

 
   

SERVICES SECTOR GROWS, JOBS TOO… The services sector provides over 80% of our economy’s jobs and is expected to keep growing in December, according to the the ISM Non-Manufacturing Index. Jobs overall should also expand by a strong 160,000 Nonfarm Payrolls.

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… There’s a slightly stronger feeling rates could move up or down this year, but it’s still a very small minority of futures traders leaning that way. Note: In the lower chart, a 6% probability of change is a 94% 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     6%
Mar 18     10%
Apr 29    21%

 

 

 

   

BUSINESS TIP OF THE WEEK

 
  Instead of making traditional New Year’s resolutions, try choosing a “focus word.” This “word of the year” makes it easier to concentrate on what you want to accomplish in 2020 in business, and in life.  

 

  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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