The upward trend continues in home building. This may seem like a far fetched statement if you saw the headline number for March Housing Starts, down 6.8%, however that is coming off a big February boost thanks to unusually mild weather, plus, the March Housing Starts 1.215 million unit annual rate is up 9.2% over a year ago. More proof of the upward trend? New Building Permits were up 3.6% in March, with single-family permits up 13.5% versus a year ago. The April's National Association of Home Builders sentiment index sits at a solid 68.

Friday we learned that Existing Home Sales were up 4.4% in March, hitting a 5.71 million annual rate, their highest pace in more than a decade! This puts sales 5.9% ahead of where they were a year ago. Demand was so strong that 48% of the existing homes sold were on the market in less than a month. Reflecting this trend, the Potential Home Sales model from a provider of settlement services shows the housing market performing 47% better than last year. Their chief economist said the model measures what "a healthy market level of home sales should be, based on the economic, demographic, and housing market environments."

Review of Last Week

Friday President Trump revealed he would release a "massive tax cut package" this week. This was enough to push the three major stock indexes ahead for the five days of trading.

In addition to prospects for tax cuts, investors could feel good about some things going on in the economy. Existing Home Sales upside surprise was great along with encouraging data on the manufacturing front. Industrial Production went up 0.5% in March and overall Capacity Utilization increased to 76.1%. The New York Empire State Index showed continued manufacturing improvement in that region. The same goes for the Philadelphia Fed Index. Healthier manufacturing means more good paying jobs and that's great for the housing market. Finally, Continuing Unemployment Claims fell below the 2 million level.

The week ended with the Dow UP 0.5%, to 20548; the S&P 500 UP 0.8%, to 2349; and the Nasdaq UP 1.8%, to 5911.

U.S. Treasuries and other bonds made small gains as investors shored up their safe harbor positions before those pesky French elections. The 30YR FNMA 4.0% bond we watch finished the week down .06, at $105.33. National average 30 year fixed mortgage rates dropped again in Freddie Mac's Primary Mortgage Market Survey for the week ending April 20tj. This time they hit their lowest mark since November of last year.

Where are interest rates headed?

This Week’s Forecast

\New Home Sales, which are predicted to slip a bit. The Employment Cost Index is expected to edge up, good for wage growth and housing, though the Fed also sees that as an indicator of rising inflation with rates eventually doing the same. The Chicago PMI is forecast to show Midwest manufacturing still growing at a nice pace.

The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of April 24th – April 28th:

Apr 25     10:00     New Home Sales
Apr 25     10:00     Consumer Confidence
Apr 26     10:30     Crude Inventories
Apr 27     08:30     Initial Unemployment Claims
Apr 27     08:30     Continuing Unemployment Claims
Apr 27     08:30     Durable Goods Orders
Apr 27     10:00     Pending Home Sales
Apr 28     08:30     GDP - Advanced
Apr 28     10:00     Employment Cost Index\
Apr 28     09:45     Chicago PMI\
Apr 28     10:00     U. of Michigan Consumer Sentiment
                                                                                                          
Federal Reserve Watch   

Speculative Forecasting Federal Reserve policy changes in coming months:

Economists expect the Fed to keep rates where they are in May but there is a better than even chance we'll see a quarter percent hike in July.

Note: In the lower chart, a 5% probability of change is a 95% certainty the rate will stay the same.

Current Fed Funds Rate: 0.75%-1.0%

After FOMC meeting on:     

May 3     0.75%-1.0%
Jun 14     1.0%-1.25%
Jul 26     1.0%-1.25%

Probability of change from current policy:

After FOMC meeting on:    

May 3             5%
Jun 14           53%
Jul 26           58%

Where are interest rates headed?

Call me now, 303.668.3350 or click here to apply!

Apply Now!
Get the Insider Track on Interest Rates!

Cheers!

Scott Synovic
Nations Reliable Lending, LLC
Colorado's Mortgage Expert
www.scottsynovic.com
303.668.3350 Direct

NMLS: 253799 / NRL NMLS: 181407
Regulated by the Division of Real Estate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial
services and other professionals only. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.

Home builders appear to be working hard and the results are indeed inspiring. The Mortgage Bankers Association (MBA) reports purchase applications for new homes surged to a record high in March. Their Builder Application Survey pegged those purchase applications up 23% over February and 6.7% ahead of March a year ago. The MBA tabbed new home sales in March at a seasonally adjusted 670,000 unit annual rate.

Their vice president of research and economics commented, "developers are finding ways to bring new product on line to help supplement otherwise low inventories of existing homes for sale."

She also noted, "In contrast to the increasing average loan size trend in our Weekly Survey, which reports applications for both new and existing homes, the average loan size for new homes was unchanged from a year ago." In spite of that larger loan size, the survey for the week ending April 7th reported purchase applications up 3% overall. Though last year showed the strongest home sales pace in a decade, the National Association of Realtors reported a drop in vacation home buying but they note investment sales "reached their highest level since 2012 as investors recognized the sizable demand for renting."

Review of Last Week

It was a holiday shortened week and the four days of trading were continually disturbed by an equal number of geopolitical concerns. Syria, North Korea, Russia and the bombing of ISIS tunnels in Afghanistan caused enough investor gyrations to keep stock prices in check. The result? The three major market indexes ended down for the second week in a row. And this was in spite of the fact that the Q1 corporate earnings season got started with better than expected numbers from three large U.S. banks. Plus, we received some pretty good if not yet spectacular economic data.

Kicking off with the good data, overall Retail Sales fell a tick in March but the drop was largely due to dips in gasoline prices and auto and truck sales. Vehicle sales are very volatile month-to-month and lower gas prices leave consumers with more to spend on other goods and services to boost the economy. Taking out auto and gas numbers, retail sales actually rose 0.1% in March. Inflation came in super tame, both with the Producer Price Index of wholesale prices and the Consumer Price Index. Best of all, University of Michigan Consumer Sentiment showed consumers are more optimistic about their present situation than at any point since 2000.

The week ended with the Dow down 1.0%, to 20453; the S&P 500 down 1.1%, to 2329; and the Nasdaq down 1.2%, to 5805.

The geared-up geopolitics and innocuous inflation sent money into bonds, advancing prices nicely. The 30YR FNMA 4.0% bond we watch finished the week UP .33, at $105.39. For the week ending April 13, Freddie Mac's Primary Mortgage Market Survey showed national average 30-year fixed mortgage rates falling for the fourth week in a row, landing at a new low for the year. Note that this follows the Fed's latest rate hike.

Where are interest rates headed?

This Week’s Forecast

According to the forecasts, Existing Home Sales went up while Housing Starts slipped. Home builders remain optimistic as Building Permits are expected up. We also get mixed reads on the factory front. The Philadelphia Fed Index of manufacturing activity in that key region should be down while the national Industrial Production and Capacity Utilization measures are predicted up.

The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of April 17th – April 21st

Apr 17     08:30     NY Empire Manufacturing Index
Apr 18     08:30     Housing Start
Apr 18     08:30     Building Permits
Apr 18     09:15     Industrial Production
Apr 18     09:15     Capacity Utilization
Apr 19     10:30     Crude Inventories
Apr 19     14:00     Fed's Beige Book
Apr 20     08:30     Initial Unemployment Claims
Apr 20     08:30     Continuing Unemployment Claims
Apr 20     08:30     Philadelphia Fed Index
Apr 20     10:00     Leading Economic Indicators
Apr 21     10:00     Existing Home Sales
                                                                                                          
Federal Reserve Watch   

Speculative Forecasting Federal Reserve policy changes in coming months:

Economists expect no rate hike at the Fed's next meeting and now a smaller majority sees an increase in June.

Note: In the lower chart, a 5% probability of change is a 95% certainty the rate will stay the same.

Current Fed Funds Rate: 0.75%-1.0%

After FOMC meeting on:    

May 3     0.75%-1.0%
Jun 14     1.0%-1.25%
Jul 26     1.0%-1.25%

Probability of change from current policy:

After FOMC meeting on:

May 3             5%
Jun 14           58%
Jul 26           62%

Where are interest rates headed?

Call me now, 303.668.3350 or click here to apply!

Apply Now!
Get the Insider Track on Interest Rates!

Cheers!

Scott Synovic
Nations Reliable Lending, LLC
Colorado's Mortgage Expert
www.scottsynovic.com
303.668.3350 Direct

NMLS: 253799 / NRL NMLS: 181407
Regulated by the Division of Real Estate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial
services and other professionals only. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.

There are some good reasons for us to feel confident about the housing market so fun and amazing things may be soon upon us.

The latest market analysis from realtor.com reveals this spring will be the hottest buying season yet.

The median number of days homes are staying on the market is sixty nine, eight fewer than a year ago and experts predict buying will accelerate, with homes remaining on the market just twenty two  days as the spring selling season ramps up. The realtor.com manager of economic research says, "we're already in the thick of the most frenzied spring home buying season on record."

There's also good reason to be confident about home buying among the important Millennial generation. A leading provider of loan origination software released a tracking study on that group's activities. The firm's EVP of corporate strategy noted: "Purchase loans are increasing, indicating that Millennials are continuing to enter the first-time home buyer market." In fact, the Mortgage Bankers Association reported purchase applications up 1.0% for the week ending March 31 plus, purchase demand is up as the average loan size for purchase applications set a new record, coming in at $318,200. Seems like amazing things are already happening.

Review of Last Week

Last week's last trading day began with two out-of-the-ordinary reports. The first was the news of a surprise U.S. missile attack on the Syrian air base believed responsible for a chemical attack earlier in the week. The second was the Bureau of Labor Statistics reveal that a way less than expected 98,000 jobs were added in March. Additional geopolitical concerns included another North Korean missile test, and the diplomatic talks between President Trump and his Chinese counterpart Xi Jinping in Florida. Investors were by no means panicking but all three major stock market indexes closed fractionally lower for the week.

Wall Streeters stayed calm as the Syrian action garnered support from several U.S. partners while the President said he had made "tremendous progress" with Xi. Even the jobs report contained comforting items. The Unemployment Rate dropped to 4.5%, its lowest level in almost 10 years. Hourly Earnings continued on an upward trend, rising 0.2% for the month and 2.7% annually. Total hours worked are up 1.4%, so total wages are up 4.1% versus a year ago, good for the housing market, which needs incomes to keep up with home prices.

The week ended with the Dow down seven points, to 20656; the S&P 500 down 0.3%, to 2356; and the Nasdaq down 0.6%, to 5878.

Geopolitics and the lower than expected jobs number helped some bond prices. The 30YR FNMA 4.0% bond we watch finished the week UP .12, at $105.06. In Freddie Mac's Primary Mortgage Market Survey for the week ending April 6, national average 30-year fixed mortgage rates dropped for the third week in a row, nearing their low for the year. 

Where are interest rates headed?

 This Week’s Forecast

Consumer spending is a big driver of the economy so we keep an eye on Retail Sales. The overall number is forecast to come in a tick down for March but when you exclude volatile auto sales, growth should continue. The Consumer Price Index (CPI) is predicted to show overall inflation flat in March, although the Core CPI, which excludes volatile food and energy prices, is predicted to be up a bit.

The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of April 10th – April 14th

Apr 12     10:30     Crude Inventories
Apr 13     08:30     Initial Unemployment Claims
Apr 13     08:30     Continuing Unemployment Claims
Apr 13     08:30     Producer Price Index (PPI)
Apr 13     08:30     Core PPI
Apr 13     10:00     U. of Michigan Consumer Sentiment
Apr 14     08:30     Retail Sales
Apr 14     08:30     Retail Sales ex-auto
Apr 14     08:30     Consumer Price Index
Apr 14     08:30     Core CPI
Apr 14     10:00     Business Inventories
                                                                                                          
Federal Reserve Watch   

Speculative Forecasting Federal Reserve policy changes in coming months:

Expectations have firmed a little more for another hike from the Fed in June.

Note: In the lower chart, a 5% probability of change is a 95% certainty the rate will stay the same.

Current Fed Funds Rate: 0.75%-1.0%

After FOMC meeting on:  

May 3     0.75%-1.0%
Jun 14     1.0%-1.25%
Jul 26     1.0%-1.25%

Probability of change from current policy:

After FOMC meeting on:

May 3             5%
Jun 14           71%
Jul 26           74%

Where are interest rates headed?

Call me now, 303.668.3350 or click here to apply!

Apply Now!
Get the Insider Track on Interest Rates!

Cheers!

Scott Synovic
Nations Reliable Lending, LLC
Colorado's Mortgage Expert
www.scottsynovic.com
303.668.3350 Direct

NMLS: 253799 / NRL NMLS: 181407
Regulated by the Division of Real Estate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial
services and other professionals only. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.

Pending Home Sales shot up 5.5% in February to the highest level in almost a year and its second highest level in more than a decade. The index of contracts signed on existing homes is 2.6% ahead of last year and anticipates nice gains in coming months. The National Association of Realtors (NAR) chief economist feels "the stock market's rise and steady hiring in most markets is spurring significant interest in buying."

The SVP at a property data provider noted, "stronger wage growth is outpacing home price growth in more than half of the markets for the first time since Q1 2012." The national Case-Shiller home price index was up 0.6% in January and their managing director commented that the Fed's last hike "by a quarter percentage point is expected to add less than a quarter percentage point to mortgage rates." He added: "Given the market's current strength and the economy, the small increase in interest rates isn't expected to dampen home buying." The latest NAR forecast pegs existing home sales at 5.57 million for 2017, up 2.3% over last year.

Review of Last Week

Following the prior week's fall from grace stocks rebounded nicely with the major market indexes up after five days of trading. It was also the end of the first quarter and the three-month performances were impressive. The blue chip Dow advanced for the sixth quarter in a row, its longest streak of such gains in more than ten years. The broadly based S&P 500 also increased for the sixth straight quarter while the Nasdaq posted the highest quarterly gain up nearly 10% the last three months. Investors remain upbeat about the economic outlook and upcoming Q1 corporate earnings.

The Conference Board's Consumer Confidence Index rocketed to a 16-year high in March. Their director of economic indicators noted consumers "expressed much greater optimism regarding the short-term outlook for business, jobs and personal income." This follows other reports of renewed optimism. Fannie Mae found lenders are now more confident than ever in the economy, while consumers' faith in the housing market is stronger than ever. February Personal Spending did fall short of forecasts but Personal Income and PCE Price inflation were fine.

The week ended with the Dow UP 0.3%, to 20663; the S&P 500 UP 0.8%, to 2363; and the Nasdaq UP 1.4%, to 5912.

Bond prices gained and yields dropped with the miss in Personal Spending and talk from Fed members about trimming their $4.5 trillion balance sheet. The 30YR FNMA 4.0% bond we watch finished the week UP .31, at $104.94. National average 30-year fixed mortgage rates dropped in Freddie Mac's Primary Mortgage Market Survey for the week ending March 30, the second straight "significant" decline.

Where are interest rates headed?

This Week’s Forecast

The national measure of manufacturing activity should stay solidly in growth territory as the ISM Index remains well north of 50. Fed watchers will study FOMC Minutes from the last meeting when all but one of the central bankers voted for the rate hike. The March jobs report is expected to make another good showing with a bit fewer than 200,000 new Non farm Payrolls and the important Hourly Earnings reading a welcome 0.3%.

The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of April 3rd – April 7th

Apr 3     10:00     ISM Index
Apr 4     08:30     Trade Balance
Apr 5     10:00     ISM Services
Apr 5     10:30     Crude Inventories
Apr 5     14:00     FOMC Minutes
Apr 6     08:30     Initial Unemployment Claims
Apr 6     08:30     Continuing Unemployment Claims
Apr 7     08:30     Average Workweek
Apr 7     08:30     Hourly Earnings
Apr 7     08:30     Nonfarm Payrolls
Apr 7     08:30     Unemployment Rate
                                                                                                          
Federal Reserve Watch   

Speculative Forecasting Federal Reserve policy changes in coming months:

More economists are saying we'll get another rate hike in June but very few expect one in May.

Note: In the lower chart, a 6% probability of change is a 94% certainty the rate will stay the same.

Current Fed Funds Rate: 0.75%-1.0%

After FOMC meeting on:   

May 3     0.75%-1.0%
Jun 14     1.0%-1.25%
Jul 26     1.0%-1.25%

Probability of change from current policy:

After FOMC meeting on:

May 3             6%
Jun 14           63%
Jul 26           68%

Where are interest rates headed?

Call me now, 303.668.3350 or click here to apply!

Apply Now!
Get the Insider Track on Interest Rates!

Cheers!

Scott Synovic
Nations Reliable Lending, LLC
Colorado's Mortgage Expert
www.scottsynovic.com
303.668.3350 Direct

NMLS: 253799 / NRL NMLS: 181407
Regulated by the Division of Real Estate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial
services and other professionals only. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.