Pending Homes Sales Jump by Ron Schulz

 

 

Brought to you by Ron Schulz

 

 

   

For the week of July 6, 2020

 

 

QUOTE OF THE WEEK

 
  “The secret of success is to do the common thing uncommonly well.”—John D. Rockefeller Jr., American financier and philanthropist   

 

   

NATIONAL MARKET UPDATE

 
   

The National Association of Realtors Pending Home Sales [em.mediacenternow.com] index of contracts signed on existing homes surged 44.3% in May, its biggest gain since 2001. All regions were up, though the overall index is still down a smidge annually.

The NAR chief economist: “The outlook has significantly improved, as new home sales are expected to be higher this year than last, and annual existing home sales are now projected to be down by less that 10%.”

Plus: “All figures light up in 2021 with positive GDP, employment, housing starts and home sales.” Next year’s NAR forecast calls for sales of 5.35 million existing homes and 800,000 new ones.

 

 

   

REVIEW OF LAST WEEK

 
   

ECONOMY RECOVERS, STOCK MARKET TOO… Economic data has been encouraging for a while, but last week’s blow-out reports showed investors the economy really is headed back up, and stocks responded in kind.

Growing at the fastest rate ever, an astonishing 4.8 million new Nonfarm Payrolls were added in June, shattering forecasts, and dropping the unemployment rate more than two percentage points. 

With the largest monthly gain in more than 40 years, the ISM Manufacturing Index revealed that key economic sector was growing again in June. Economists say full recovery is still a long way off, but there’s no question it’s begun.

The week ended with the Dow UP 3.2%, to 25,827; the S&P 500 UP 4.0%, to 3,130; and the Nasdaq UP 4.6%, to 10,208.

Cautious investors remained interested in bonds, supporting prices. The UMBS 3.5% ended up 0.05, at $105.22. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate set a new all-time record low. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… Compared to a year ago, home prices are higher, but monthly payments are lower, thanks to the drop in mortgage rates. The median asking price on homes listed in May 2020 was $18,000 higher than May 2019, yet the median monthly payment fell to $1,170 from $1,225 a year ago.

 

 

   

THIS WEEK’S FORECAST

 
   

SERVICES REBOUNDS, JOBLESS CLAIMS RECEDE, INFLATION OK… The economy’s services sector, providing most of our jobs, should climb close to a growth read from the ISM Non-Manufacturing Index. Going the other way, happily, is the forecast for Initial Unemployment Claims, while the Producer Price Index (PPI) is expected to show wholesale prices remain under control.

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… Virtually every Fed watcher on earth expects the central bank will not hike current rock-bottom rates until well in the future. Note: In the lower chart, a 0% probability of change is a 100% certainty the rate will stay the same.

Current Fed Funds Rate: 0%-0.25%

AFTER FOMC MEETING ON: CONSENSUS
Jul 29 0.00%-0.25%
Sep 16 0.00%-0.25%
Nov 5 0.00%-0.25%

 

Probability of change from current policy:

AFTER FOMC MEETING ON: CONSENSUS
Jul 29     0%
Sep 16     0%
Nov 5     0%

 

 

 

   

BUSINESS TIP OF THE WEEK

 
  When you switch attention between tasks, you lose focus. Instead of multitasking, focus on one thing at a time, long enough to complete it. Studies found you’ll actually get more done than when you multitask, and with higher-quality results.   

 

  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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