![]() 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. |
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