![]() 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. Scott Synovic is a top performing mortgage loan originator providing superior levels of service and satisfaction to clients and business partners in Colorado - www.scottsynovic.com NMLS #253799 Fairway Independent Mortgage Corporation #2289
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