As expected, the ill winds of the recent hurricanes blew no good in the housing market. August Housing Starts slipped 0.8%, to a 1.180 million annual rate but with Hurricane Harvey hitting our fourth largest city late that month, this small dip shouldn't be a concern. Analysts say Hurricane Irma, which impacted our third most populous state may also deflate September numbers. Rebuilding after the storms and solid market fundamentals are expected to send starts to new highs by early next year. Starts are still up 1.4% from a year ago, with single family starts up 1.6% for the month.

Building permits fared better, up 5.7% in August, to a 1.3 million annual rate. This shows positive movement although the National Association of Home Builders sentiment index dipped in September, typical reaction after big storms, coming in at a still high 64. August Existing Home Sales dropped 1.7%, to a 5.35 million annual rate with Harvey also to blame, sales in the Houston area down 25% versus a year ago. Experts say we may not get back to normal selling rates until December. Freddie Mac's latest monthly Outlook sees sales growing next year, as "the economic environment remains favorable for housing and mortgage markets."

Review of Last Week

The Fed met last week and held the Fed Funds rate where it's been, as expected however Federal Open Market Committee (FOMC) members made it clear they would soon tighten monetary policy. This news gave investors pause so after sending stocks to fresh record highs the first half of the week, they cooled things down and held the week's market performance to modest gains in the Dow and S&P 500, also, a minor slip for the Nasdaq. The Fed indicated it would tighten policy in three ways. First starters, 12 of the 16 voting FOMC members think they will hike rates at least a quarter point later this year.

Secondly, the Fed's so-called "dot plot" remains unchanged from June, which scoped out three rate hikes in 2018, following the one expected in December.

Thirdly, before any of these rate hikes occur, the Fed will begin "normalizing" its balance sheet next month. To boost the economy, in addition to cutting interest rates, the Fed bought Treasuries and mortgage bonds to add liquidity to the system. This took its balance sheet from under $1 trillion to around $4.5 trillion. The Fed will now start selling those bonds at a very slow pace, as they don't want to hurt growth. Remember, these moves are a positive sign that the economy is finally expanding at a healthier rate.

The week ended with the Dow UP 0.4%, to 22350; the S&P 500 UP 0.1%, to 2502; and the Nasdaq down 0.3%, to 6427.

A down week in the bond market ended higher for some Treasuries, as North Korean threats inspired a safe haven play on Friday. The 30YR FNMA 4.0% bond we watch finished the week down .05, to $105.31. In Freddie Mac's Primary Mortgage Market Survey for the week ending September 21, national average 30 year fixed mortgage rates edged up slightly. Freddie's chief economist said "this week's uptick...ends a nearly two-month streak of declines."

This Week's Forecast

The forecast is that August New Home Sales will move up but Pending Home Sales will fall back. This measure of contracts signed on existing homes reflects the tight inventories that have constrained this part of the housing market. Core PCE Prices inflation is expected to edge up into the range the Fed likes for a rate hike, so let's watch this carefully. The Chicago PMI should show Midwest manufacturing continues to grow.

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 September 25th - September 29th

Sep 26    10:00   Consumer Confidence    Sep    119.4    122.9
Sep 26    10:00   New Home Sales
Sep 27    08:30   Durable Goods Orders
Sep 27    08:30   Durable Goods Orders - ex trans
Sep 27    10:00   Pending Home Sales    Aug
Sep 27    10:30   Crude Inventories
Sep 28    08:30   Initial Unemployment Claims
Sep 28    08:30   Continuing Unemployment Claims
Sep 28    08:30   GDP - Third Estimate
Sep 29    08:30   Personal Income
Sep 29    08:30   Personal Spending
Sep 29    08:30   Core PCE Prices
Sep 29    09:45   Chicago PMI  
Sep 29    10:00   U. of Michigan Consumer Sentiment - Finall

Federal Reserve Watch

Speculative forecasting Federal Reserve policy changes in coming months:

The financial market is taking the Fed at its word and expecting a quarter point rate hike come December.

Note: In the lower chart, a 2% probability of change is a 98% certainty the rate will stay the same.

Current Fed Funds Rate: 1.0%-1.25%

After FOMC meeting on:   

Nov 1    1.0%-1.25%
Dec 13    1.0%-1.25%
Jan 31    1.0%-1.25%

Probability of change from current policy:

After FOMC meeting on:

Nov 1        2%
Dec 13      73%
Jan 31      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.

As expected, the ill winds of the recent hurricanes blew no good in the housing market. August Housing Starts slipped 0.8%, to a 1.180 million annual rate, but with Hurricane Harvey hitting our fourth largest city late that month, this small dip shouldn't be a concern. Analysts say Hurricane Irma, which impacted our third most populous state, may also deflate September numbers. Of course, rebuilding after the storms and solid market fundamentals are expected to send starts to new highs by early next year. They're still up 1.4% from a year ago, with single family starts up 1.6% for the month.

Building permits fared better, up 5.7% in August, to a 1.3 million annual rate. This shows a positive vibe, although the National Association of Home Builders sentiment index dipped in September, a typical reaction after big storms, coming in at a still high 64. August Existing Home Sales dropped 1.7%, to a 5.35 million annual rate, with Harvey also to blame, sales in the Houston area down 25% versus a year ago. Experts say we may not get back to normal selling rates until December. Freddie Mac's latest monthly Outlook sees sales growing next year, as "the economic environment remains favorable for housing and mortgage markets." All right!

BUSINESS TIP OF THE WEEK... Keep learning. Check into business blogs, articles and books, network locally, go to a major conference. You'll hone your skills, acquire new ones and stay up with your field.

>> Review of Last Week

THE FED HOLDS, THE MARKET HOLDS... The Fed met last week and held the Fed Funds rate where it's been, as expected. But Federal Open Market Committee (FOMC) members made it clear they would soon tighten monetary policy. This news gave investors pause, so after sending stocks to fresh record highs the first half of the week, they cooled things down and held the week's market performance to modest gains in the Dow and S&P 500, and a minor slip for the Nasdaq. The Fed indicated it would tighten policy in three ways. First off, 12 of the 16 voting FOMC members think they will hike rates at least a quarter point later this year.

Secondly, the Fed's so-called "dot plot" remains unchanged from June, which scoped out three rate hikes in 2018, following the one now expected in December. Thirdly, before any of these rate hikes occur, the Fed will begin "normalizing" its balance sheet next month. To boost the economy, in addition to cutting rates, the Fed bought Treasuries and mortgage bonds to add liquidity (more money) to the system. This took its balance sheet from under $1 trillion to around $4.5 trillion. They'll now start selling those bonds, but at a very slow pace, as they don't want to hurt growth. And, remember, these moves are a positive sign that the economy is finally expanding at a healthier rate.

The week ended with the Dow UP 0.4%, to 22350; the S&P 500 UP 0.1%, to 2502; and the Nasdaq down 0.3%, to 6427.

A down week in the bond market ended higher for some Treasuries, as North Korean threats inspired a safe haven play on Friday. But the 30YR FNMA 4.0% bond we watch finished the week down .05, to $105.31. In Freddie Mac's Primary Mortgage Market Survey for the week ending September 21, national average 30-year fixed mortgage rates edged up slightly. Freddie's chief economist said "this week's uptick...ends a nearly two-month streak of declines." Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?... A new report says says the best time of year to buy a starter home is from October 1 to December 31, when inventories increase about 7%, leading to listing prices falling 3.1% to 4.8% lower than the rest of the year.

>> This Week's Forecast

NEW HOME SALES UP, PENDING SALES OFF, INFLATION AND MANUFACTURING GROW... They're forecasting August New Home Sales will move up, but Pending Home Sales will fall back. This measure of contracts signed on existing homes reflects the tight inventories that have constrained this part of the housing market. Core PCE Prices inflation is expected to edge up into the range the Fed likes for a rate hike, so let's watch this carefully. The Chicago PMI should show Midwest manufacturing continues to grow.

>> 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 Sep 25 - Sep 29

Date    Time (ET)    Release    For    Consensus    Prior    Impact
Tu
Sep 26    10:00    Consumer Confidence    Sep    119.4    122.9    Moderate
Tu
Sep 26
    10:00
    New Home Sales    Aug    577K    571K    Moderate
W
Sep 27
    08:30
    Durable Goods Orders    Aug
    0.7%    -6.8%    Moderate
W
Sep 27
    08:30
    Durable Goods Orders - ex trans    Aug
    0.2%    0.5%    Moderate
W
Sep 27
    10:00
    Pending Home Sales    Aug
    -0.4%    -0.8%    Moderate
W
Sep 27    10:30    Crude Inventories    09/23    NA    4.6M    Moderate
Th
Sep 28    08:30    Initial Unemployment Claims    09/23    275K    259K    Moderate
Th
Sep 28    08:30    Continuing Unemployment Claims    09/16    NA    1.980M    Moderate
Th
Sep 28    08:30    GDP - Third Estimate    Q2    3.0%    3.0%    Moderate
F
Sep 29    08:30
    Personal Income    Aug
    0.2%    0.4%    Moderate
F
Sep 29
    08:30
    Personal Spending    Aug
    0.1%    0.3%    HIGH
F
Sep 29
    08:30
    Core PCE Prices    Aug
    0.2%    0.1%    HIGH
F
Sep 29
    09:45    Chicago PMI    Sep
    58.0    58.9    HIGH
F
Sep 29
    10:00
    U. of Michigan Consumer Sentiment - Final    Sep
    95.4    95.1    Moderate


>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months...The financial market is taking the Fed at its word and expecting a quarter point rate hike come December. Note: In the lower chart, a 2% probability of change is a 98% certainty the rate will stay the same.

Current Fed Funds Rate: 1.0%-1.25%
After FOMC meeting on:    Consensus
Nov 1    1.0%-1.25%
Dec 13    1.0%-1.25%
Jan 31    1.0%-1.25%

Probability of change from current policy:
After FOMC meeting on:    Consensus
Nov 1        2%
Dec 13      73%
Jan 31      74%

Last Thursday, Equifax revealed it was the victim of a "cyber security incident" that could impact up to 143 million consumers. Equifax claims the breach involved data on a U.S. website application and not their core credit reporting databases. The company said it will send direct mail notices to everyone whose data was breached and consumers can also check at equifaxsecurity2017.com.

Security experts advise people affected to freeze their accounts immediately at all three credit bureaus - Equifax, Experian and TransUnion. Also, sign up for fraud protection services such as LifeLock, EZShield and Identity Guard.

Thanks to rising home prices and tight supply in many markets, Fannie Mae's latest Home Purchase Sentiment Index reported more respondents think now is a good time to sell than a good time to buy. But the share of those who said mortgage rates will go down went up to 45%! Low rates certainly are helping, as mortgage origination's went up 37% in Q2. The Mortgage Bankers Association reported purchase applications up 1% for the week ending September 1. Finally, the head of the Small Business Administration said that her agency is set to give out $3.3 billion in Hurricane Harvey disaster loans to uninsured homeowners and businesses, excellent.

Review of Last Week

The health of the stock market depends on investor willingness to take on the greater risk involved. In the holiday-shortened week, Wall Street's appetite for risk was trimmed by too many worries, from Hurricane Harvey to Hurricane Irma, to continued geopolitical concerns about North Korea. The result? The three major market indexes headed down for the week, though not by that much. The S&P 500 in fact ended just 0.8% below its all-time high, so this wasn't considered a turnaround from the positive market sentiment we've seen since the election. The little economic news we had was pretty good anyway.

The President and House and Senate leaders engineered a budget agreement that offers an extension of the government's funding and debt ceiling as well as federal money for hurricane relief. The ISM Services index rose to 55.3 in August, well above the 50 level signaling expansion in the sector of the economy that provides the vast majority of our jobs. July's Trade Balance came in at a smaller than expected $43.7 billion deficit. In the past year, exports are up 4.9%, almost matching the growth of imports, up 5.1%. And a deeper look into August employment data revealed 30,000 new construction jobs, a considerable and much needed boost.

The week ended with the Dow down 0.9%, to 21798; the S&P 500 down 0.6%, to 2461; and the Nasdaq down 1.2%, to 6360.

Wall Street's aversion to risk played nicely into the safe haven of bonds. The 30YR FNMA 4.0% bond we watch finished the week UP .20, to $105.75. Freddie Mac's Primary Mortgage Market Survey for the week ending September 7 reported national average 30 year fixed mortgage rates fell to a new year to date low for the third week in a row.

Where are interest rates headed?

This Week's Forecast

The forecast is for inflation to pick up a bit more, with the Consumer Price Index (CPI) and Core CPI both rising in August after falling in July. The Fed is looking for growth here, so we'll watch this closely. Retail Sales are expected to continue expanding nicely, especially when you take out volatile monthly vehicle sales in the Retail Sales ex-auto reading.

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 September 11th - September 15th

Sep 13    08:30    Producer Price Inde
Sep 13    08:30    Core PPI
Sep 13    10:30    Crude Inventories
Sep 14    08:30    Initial Unemployment Claims
Sep 14    08:30    Continuing Unemployment Claims
Sep 14    08:30    Consumer Price Index (CPI)
Sep 14    08:30    Core CPI
Sep 15    08:30    Retail Sales
Sep 15    08:30    Retail Sales Excluding Auto
Sep 15    08:30    NY Empire Manufacturing Index
Sep 15    09:15    Industrial Production
Sep 15    09:15    Capacity Utilization
Sep 15    10:00    Business Inventories
Sep 15    10:00    U. of Michigan Consumer Sentiment

Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months:

The financial market now expects the Fed to keep rates where they are well into 2018.

Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 1.0%-1.25%

After FOMC meeting on:

Sep 20    1.0%-1.25%
Nov 1    1.0%-1.25%
Dec 13    1.0%-1.25%

Probability of change from current policy:

After FOMC meeting on:

Sep 20      1%
Nov 1      3%
Dec 13    38%

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.

Last Thursday, Equifax revealed it was the victim of a "cyber security incident" that could impact up to 143 million consumers. They claim the breach involved data on a U.S. website application and not their core credit reporting databases. The company said it will send direct mail notices to everyone whose data was breached. Security experts advise people affected to freeze their accounts immediately at all three credit bureaus, Equifax, Experian and TransUnion, and sign up for fraud protection services such as LifeLock, EZShield and Identity Guard.


Thanks to rising home prices and tight supply in many markets, Fannie Mae's latest Home Purchase Sentiment Index reported more respondents think now is a good time to sell than a good time to buy however the share of those who said mortgage rates will go down went up to 45%. Low rates certainly are helping, as mortgage originations went up 37% in Q2. The Mortgage Bankers Association reported purchase applications up 1% for the week ending September 1st. Finally, the head of the Small Business Administration said that her agency is set to give out $3.3 billion in Hurricane Harvey disaster loans to uninsured homeowners and businesses. Excellent.

Review of Last Week

The health of the stock market depends on investor willingness to take on the greater risk involved. In the holiday-shortened week, Wall Street's appetite for risk was trimmed by too many worries, from Hurricane Harvey to Hurricane Irma to continued geopolitical concerns about North Korea, the result? The three major market indexes headed down for the week, though not by that much. The S&P 500 in fact ended just 0.8% below its all-time high. This wasn't considered a turnaround from the positive market sentiment we've seen since the election. What little economic news we had was pretty good anyway.

The President and House and Senate leaders engineered a budget agreement that offers an extension of the government's funding and debt ceiling as well as federal money for hurricane relief. The ISM Services index rose to 55.3 in August, well above the 50 level signaling expansion in the sector of the economy that provides the vast majority of our jobs. July's Trade Balance came in at a smaller than expected $43.7 billion deficit. In the past year, exports are up 4.9%, almost matching the growth of imports, up 5.1%. A deeper look into August employment data revealed 30,000 new construction jobs, a considerable and much-needed boost.

The week ended with the Dow down 0.9%, to 21798; the S&P 500 down 0.6%, to 2461; and the Nasdaq down 1.2%, to 6360.

Wall Street's aversion to risk played nicely into the safe haven of bonds. The 30YR FNMA 4.0% bond we watch finished the week UP .20, to $105.75. Freddie Mac's Primary Mortgage Market Survey for the week ending September 7 reported national average 30-year fixed mortgage rates fell to a new year-to-date low for the third week in a row.

Where are interest rates headed?

This Week's Forecast

The forecast is for inflation to pick up a bit more with the Consumer Price Index (CPI) and Core CPI both rising in August after falling in July. The Fed is looking for growth here, so we'll watch this closely. Retail Sales are expected to continue expanding nicely, especially when you take out volatile monthly vehicle sales in the Retail Sales ex-auto reading.

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 September 11th - September 15th

Sep 13    08:30    Producer Price Index
Sep 13    08:30    Core PPI
Sep 13    10:30    Crude Inventories
Sep 14    08:30    Initial Unemployment Claims
Sep 14    08:30    Continuing Unemployment Claims
Sep 14    08:30    Consumer Price Index (CPI)
Sep 14    08:30    Core CPI
Sep 15    08:30    Retail Sales
Sep 15    08:30    Retail Sales ex-auto
Sep 15    08:30    NY Empire Manufacturing Index
Sep 15    09:15    Industrial Production
Sep 15    09:15    Capacity Utilization
Sep 15    10:00    Business Inventories
Sep 15    10:00    U. of Michigan Consumer Sentiment

Federal Reserve Watch   

Speculative Forecasting Federal Reserve policy changes in coming months:

The Fed Funds Futures market shows no chance of a rate hike through the end of this year and into the spring.

Note: In the lower chart, a 0% probability of change is a 100% certainty the rate will stay the same.

Current Fed Funds Rate: 1.0%-1.25%

After FOMC meeting on:

Sep 20     1.0%-1.25%
Nov 1     1.0%-1.25%
Dec 13     1.0%-1.25%

Probability of change from current policy:

After FOMC meeting on:  

Sep 20             0%
Nov 1             8%
Dec 13           42%

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