![]() Existing Home Sales are up 5.4% over last year even after dipping 3.7% in February, following January's numbers, which hit at a ten-year high. The 5.48 million unit annual rate shows healthy demand but in most markets we need more listings. The National Association of Realtors chief economist pointed out, "Realtors are reporting stronger foot traffic from a year ago but low supply." Hopefully more sellers will list as prices edge up. The FHFA Index of homes financed with conforming mortgages is 5.7% ahead of a year ago. Demand for new homes strengthened. February New Home Sales gained 6.1%, coming in just shy of a 600,000 annual rate. Sales are now up 12.8% over a year ago showing strength in spite of monthly volatility and marginally higher mortgage rates since late last year. The number of unsold new homes increased by 4,000 but that shouldn't slow down future construction since inventories stay historically low. A provider of settlement services said their Potential Home Sales model posted a 5.7 million annual rate, as "demand from Millennial's and first-time home buyers remains robust." Review of Last Week Traders spent the week warily watching Washington for signs of whether the American Health Care Act (AHCA) would pass in the House. The impending vote for the Obamacare replacement kept everyone cautious. Hopes diminished as the week wore on and were extinguished completely on Friday when Congressional leaders yanked the bill, a few votes shy of what's needed for passage. All three major stock indexes ended down for the week. Investors are not that concerned about health care reform, they just don't want wrangling over it to delay the tax reforms they do want, to boost the economy. The President said he would immediately turn his attention to getting "big tax cuts" through Congress, so Wall Streeters should feel better going forward. The few economic reports we got were pretty good. There was the decent housing market data reported above. Then we had the Initial Unemployment Claims four-week moving average at just 240,000, and Continuing Claims down to 2.000 million. Durable Goods Orders were up 1.7% overall, but up just 0.4% excluding the volatile transportation sector. Analysts caution that this indicates relatively weak business spending. The week ended with the Dow down 1.5%, to 20597; the S&P 500 down 1.4%, to 2344; and the Nasdaq down 1.2%, to 5829. Friday, investors felt negative enough to seek out the safe haven of bonds, moving prices higher. The 30YR FNMA 4.0% bond we watch finished the week UP .22, at $104.63. After two weeks of increases, national average 30-year fixed mortgage rates dropped in Freddie Mac's Primary Mortgage Market Survey for the week ending March 23, "the greatest week-over-week decline in over two months," according to their chief economist. Where are interest rates headed? This Week’s Forecast People got back to signing contracts for existing homes in February as the Pending Home Sales index is expected to return to growth territory. Consumer Personal Spending and the Core PCE Prices measure of inflation are also forecast to be growing, something the Fed wants to see. The Chicago PMI reading of factory activity in the Midwest should show expansion in March, though slightly less than the month before. 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 March 27th – March 31st Mar 28 10:00 Consumer Confidence Mar 29 10:00 Pending Home Sales Mar 29 10:30 Crude Inventories Mar 30 08:30 Initial Unemployment Claims Mar 30 08:30 Continuing Unemployment Claim Mar 30 08:30 GDP - 3rd Estimate Mar 31 08:30 Personal Income Mar 31 08:30 Personal Spending Mar 31 08:30 Core PCE Prices Mar 31 09:45 Chicago PMIF Mar 31 10:00 U. of Michigan Consumer Sentiment Federal Reserve Watch Speculative Forecasting Federal Reserve policy changes in coming months: Economists expect no rate hike at the next meet but a majority sees another quarter percent increase in June, holding through July. 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 54% Jul 26 61% 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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