Strong Fall Housing Market Forecast by Ron Schulz



Brought to you by Ron Schulz




For the week of october 7, 2019




  If money really did grow on trees, this time of year we’d all be raking it in!  





Freddie Mac [] forecasts the housing market should stay strong well into the fall. Their Chief Economist believes today’s low mortgage rates “will help boost sales,” making housing “a bright spot in the economy.”

Indeed, the latest National Association of Realtors HOME [] survey says 63% of Americans feel now is a good time to buy a home, 34% strongly believe this is true, and there’s “no sign of the optimism about home buying fading.”

The National Association of Home Builders reported “solid household formations and attractive mortgage rates are contributing to a positive builder outlook,” as their builder confidence index rose, along with buyer traffic.






UNEMPLOYMENT HITS A 50-YEAR LOW… Stocks dipped in volatile trading, but the September jobs report’s 3.5% unemployment rate–a 50-year low!–held off larger declines, and the tech-y Nasdaq actually finished ahead.

The 136,000 new Nonfarm Payrolls were joined by 45,000 more jobs added in upward revisions to prior months. Hourly earnings were flat for the month, but total wages are now up 4.3% over a year ago. 

ISM Manufacturing fell below 50, indicating contraction, and ISM Services dipped, though still showed growth. But both are surveys, not actual performance measures. In fact, Fed Chair Jerome Powell confirmed the economy is “in a good place.”

The week ended with the Dow down 0.9%, to 26,574; the S&P 500 down 0.3%, to 2,952; but the Nasdaq UP 0.5%, to 7,982.

Things stayed bullish in the bond market. The 30YR FNMA 4.0% bond ended UP .21, to $103.88. Freddie Mac’s Primary Mortgage Market Survey had the national average 30-year fixed mortgage rate up a tick, but more than 1% lower than a year ago. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… The U.S. economic expansion will continue at least until 2021 according to the Urban Land Institute. This comes from a survey of 41 economists at 32 top real estate companies.






INFLATION STAYS UNDER CONTROL… The key reports are all about inflation. The Consumer Price Index (CPI) should show overall inflation barely up in September, with Core CPI, excluding volatile food and  energy prices, a bit higher. The Producer Price Index is expected to give similar reads on wholesale prices.

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… Last week, Fed Chair Powell declared the central bank’s job is to “keep the economy expanding as long as possible.” Now Wall Street expects a rate drop in October and another in January. Note: In the lower chart, an 82% probability of change is only an 18% probability the rate will stay the same.

Current Fed Funds Rate: 1.75%-2.00%

Oct 30 1.50%-1.75%
Dec 11 1.50%-1.75%
Jan 29 1.25%-1.50%


Probability of change from current policy:

Oct 30    82%
Dec 11    45%
Jan 29    74%






  Don’t avoid something just because it seems painful or difficult. Follow the example of endurance athletes: assess and accept the challenge; make a commitment to push through the pain; keep raising the bar of what you expect from yourself.  


  Ron Schulz
Senior Loan Officer
NMLS# 266128

6060 North Central Exp #462
Dallas, TX 75206

Office: 214-346-5279
Mobile: 214-794-4014 []







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