![]() In June, Existing Home Sales grew to a 5.57 unit annual rate, a nine-year high, and 3% up from a year ago. This was the fourth month in a row sales went up, showing continued strength. Even better, the share of first-time buyers hit its highest level in four years, an important development for the market. Supply, however, is still tight, with inventories down 5.8% from a year ago, making demand so strong that 48% of homes sold in less than a month. This pushed up the median price, but that ought to bring more sellers to market. Supply should also be helped by the trend we're seeing in home building activities. Housing Starts headed up 4.8% in June, hitting a 1.189 million annual rate. Adding this to the prior two months, the rate of starts in the second quarter was the fastest in nine years. Going along with this nicely, Building Permits bumped up in June to a 1.153 million annual rate, with permits for single-family units up 5.1% versus a year ago. The NAHB index of home builder confidence slipped a point in July, but at 59 is well above 50, showing expansion. Finally, the FHFA index of prices for homes bought with conforming mortgages rose 0.2% in May, up 5.6% from a year ago. Review of Last Week Investors played it coyly all week, waiting on what the Fed and other central banks will be doing in the near future. The Fed meets this Wednesday, followed by the Bank of Japan, reporting Friday. Plus, the probability of a Bank of England rate cut in August shot up to around 90% after their purchasing managers' index went south. All this put a cautious tone to the rise in stock prices on Friday, yet equities ended higher for the fourth week in a row. The S&P 500 even finished at a new all-time high, with all 10 sectors ahead, although industrials only made a fractional gain, no surprise there. The tech-y Nasdaq reached its highest close this year. Wall Street didn't get a lot of economic data to chew on. There were the encouraging housing reports covered above, and good numbers continue on the jobless claims front. Initial Unemployment Claims dropped by 1,000 last week, to 253,000, registering the 72nd week in a row they've come in under 300,000. Continuing Unemployment Claims slid by 25,000, to 2.128 million.Some economists say these figures are consistent with decent job gains going forward. We'll see. Meanwhile, manufacturing continues to disappoint. The Philadelphia Fed Index, which measures factory sentiment in that key region, fell to -2.9 in July, after posting a +4.7 the month before. The week ended with the Dow UP 0.3%, to 18571; the S&P 500 UP 0.6%, to 2175; and the Nasdaq UP 1.4%, to 5100. Over in the bond market, Treasuries experienced a seesaw week, trading at the end a tad lower. Other issues showed modest gains, as the 30YR FNMA 4.0% bond we watch finished the week up .01, at $107.03. Freddie Mac's Primary Mortgage Market Survey for the week ending July 21 reported national average 30-year fixed mortgage rates up slightly but still near historical lows. Their chief economist explained: "Post-Brexit volatility tapered off over the last two weeks, allowing interest rates to bounce back a bit." Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information. This Week’s Forecast Forecasters see both New Home Sales and Pending Home Sales up for June. The latter is an index of contracts signed on existing homes, showing those sales should go up a couple of months out, a nice build on last week's data. Inflation could grow with the upward moving Employment Cost Index, since producers raise prices to cover higher worker costs. The Chicago PMI read on factory activity in the Midwest is expected to slide a tad and the FOMC Rate Decision to be a non-event. 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 Jul 25 – Jul 29 Jul 26 10:00 Consumer Confidence Jul 26 10:00 New Home Sales Jul 27 08:30 Durable Goods Orders Jul 27 10:00 Pending Home Sales Jul 27 10:30 Crude Inventories Jul 27 14:00 FOMC Rate Decision Jul 28 08:30 Initial Unemployment Claims Jul 28 08:30 Continuing Unemployment Claims Jul 29 08:30 GDP-Advanced Jul 29 08:30 Employment Cost Index Jul 29 09:45 Chicago PMI Jul 29 10:00 U. of Michigan Consumer Sentiment - Final Federal Reserve Watch Forecasting Federal Reserve policy changes in coming months... A pinch more Fed watchers feel the central bankers may go for a rate hike in July, September or November, but the majority still see no hike clear through the end of the year. Note: In the lower chart, a 4% probability of change is a 96% certainty the rate will stay the same. Current Fed Funds Rate: 0.25%-0.5% After FOMC meeting on: Jul 27 0.25% - 0.50% Sep 21 0.25% - 0.50% Nov 2 0.25% - 0.50% Probability of change from current policy: After FOMC meeting on: Jul 27 4% Sep 21 15% Nov 2 17% Have a great day and please call me direct at 303.668.3350 with any questions you might have! Apply Now! Scott Synovic Nations Reliable Lending, LLC Colorado's Mortgage Expert 303.668.3350 Direct www.scottsynovic.com 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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