![]() Following their December decline, Existing Home Sales dipped again in January by 3.2%, to a 5.38 million annual rate. Though volatile month to month, home sales in 2017 racked up their best year since 2006, and, are expected to maintain that upward trend. An IRS bulletin explains interest on home equity loans may still be deductible. The loan must be used to "buy, build or substantially improve" a home, and to deduct interest, all loans on the home cannot exceed a $750,000 limit ($350,000 if married filing separately). As with all tax matters, always consult a tax or financial professional before making any tax-related decisions. Review of Last Week A crazy week on Wall Street, thanks to the Fed. Stocks went south on Wednesday after the Fed's Minutes from its last meeting revealed most members see stronger growth in the economy and inflation. This could necessitate more rate hikes, which investors don't much like. But Friday, the Fed's semi-annual monetary policy report also noted broad improvement in the economy and increasing inflation, but did not suggest that rising prices dictated more aggressive rate hikes. Happy with that, the market rallied to another weekly gain. GDP averaged 2.9% the last three quarters (after averaging 2.1% since 2010), unemployment is at a 17-year low, and wages, consumer confidence, and business investment are rising. A few rate hikes (which, remember, are starting from a very low level) may be a small price to pay for this progress. The week ended with the Dow UP 0.4%, to 25310; the S&P 500 UP 0.6%, to 2747; and the Nasdaq UP 1.4%, to 7337. Bond prices suffered from the inflation worries, but recovered a bit on Friday. The 30YR FNMA 4.0% bond we watch ended unchanged, at $102.47. National average 30-year fixed mortgage rates in Freddie Mac's latest Primary Mortgage Market Survey edged up. Where are interest rates headed? This Week's Forecast Expect to see New Home Sales up in January, along with the Pending Home Sales index of contracts signed on existing homes. The Q4 GDP-2nd Estimate should show the economy growing at a 2.5% annual rate, enough to spur additional growth in Core PCE Prices, the Fed's favorite inflation read. 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 February 26, 2018 - March 2, 2018 Feb 26 08:30 New Home Sales Feb 27 08:30 Durable Goods Orders Feb 27 10:00 Consumer Confidence Feb 28 08:30 Q4 GDP - 2nd Estimate Feb 28 09:45 Chicago PMI Feb 28 10:00 Pending Home Sales Feb 28 10:30 Crude Inventories Mar 1 08:30 Initial Unemployment Claims Mar 1 08:30 Continuing Unemployment Claims Mar 1 08:30 Personal Income Mar 1 08:30 Personal Spending Mar 1 08:30 Core PCE Prices Mar 1 10:00 ISM Index Mar 2 10:00 U. of Michigan Consumer Sentiment - Final Federal Reserve Watch Speculative Forecasting Federal Reserve policy changes in coming months: In the Fed futures market, they still see a March rate hike as a near certainty. May gets a hold, then we go up another quarter percent in June. Note: In the lower chart, an 83% probability of change is an 83% certainty the rate will move higher. Current Fed Funds Rate: 1.25%-1.50% After FOMC meeting on: Mar 21 1.50%-1.75% May 2 1.50%-1.75% Jun 13 1.75%-2.00% Probability of change from current policy: After FOMC meeting on: Mar 21 83% May 2 22% Jun 13 69% 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.coloradosmortgageexpert.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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