![]() Monday revealed that Existing Home Sales took a bit of a breather in June,dipping 1.8%, however, they are still at a healthy 5.52 million unit annual rate, and up by 0.7% over a year ago. Economists expect real estate to maintain its overall upward trend of the last few years. We do have the headwinds of tight supply and rising prices, with median existing home prices hitting new record highs two months in a row. Demand remains strong, as 54% of the listings sold in June were less than a month old. Tuesday we learned New Home Sales moved up 0.8% in June to a 610,000 unit annual rate putting them up 9.1% versus a year ago. The supply increased to 5.4 months, aided by a 3,000 unit gain in inventories. The median price of new homes sold was down 3.4% versus last year, indicating builders are moving in the right direction. More evidence of this came with the news the home ownership rate increased in Q2 and is up 0.8% from a year ago, to a three-year high. The chief economist of an national real estate site believes "we may have turned a corner when it comes to the steep dive in home ownership we've seen over the past 10 years." Review of Last Week The S&P 500 wound up the week essentially unchanged but did hit a new record on Wednesday, while the Nasdaq finished down just a tick. The Dow, however, posted a nice weekly gain, ending at another all-time high, the 29th new high so far in 2017. In the four months following the election, stocks have rallied an impressive 12%, apparently driven by economic optimism. It's more than hope that's powering equities upward, with more than half the S&P 500 companies reporting Q2 results, earnings are up 9.1% year-over-year. Add to that, a steady stream of improving economic fundamentals. Feeding that stream, the GDP Advance read for Q2 pegged U.S. economic growth at a 2.6% annual rate. That's up 2.1% over a year ago and clearly above the anemic annual growth rates we've seen in the recovery until now. The Employment Cost Index showed the cost of employing the average U.S. worker was up 0.5% in Q2, another good sign. Picky pundits fretted that these numbers were slightly below expectations. Oh pulease. The Conference Board reported that consumers' confidence in current conditions remains at a 16-year high, while their confidence in the future edged higher. We'll go with consumers over the pundits every time. The week ended with the Dow UP 1.2%, to 21830; the S&P 500 flat, down less than a point, at 2472; and the Nasdaq down 0.2%, to 6375. Bond prices benefited from the GDP and Employment Cost Index misses but were beaten back by higher oil prices, better than expected eurozone economic data, and Friday's boost in Michigan Consumer Sentiment. The 30YR FNMA 4.0% bond we watch finished the week down .04, at $105.27. National average 30-year fixed mortgage rates fell again in Freddie Mac's Primary Mortgage Market Survey for the week ending July 27. Where are interest rates headed? This Week’s Forecast June Pending Home Sales are forecast up after slipping in May so expect higher existing home sales in a few months. The Chicago PMI gauge of Midwest manufacturing and the national ISM Index should show factory activity growing, though a little slower. Growth is also predicted for jobs in June, with just under 200,000 new Nonfarm Payrolls, and, best of all, Hourly Earnings up a bit more. The Fed's favorite Core PCE Prices inflation measure should stay low enough to squelch rate hikes for a while. 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 July 31st– August 4th Jul 31 09:45 Chicago PMI Jul 31 10:00 Pending Home Sales Aug 1 08:30 Personal Income Aug 1 08:30 Personal Spending Aug 1 08:30 Core PCE Price Aug 1 10:00 ISM Index Aug 2 10:30 Crude Inventories Aug 3 08:30 Initial Unemployment Claims Aug 3 08:30 Continuing Unemployment Claims Aug 3 10:00 ISM Services Aug 4 08:30 Average Workweek Aug 4 08:30 Hourly Earnings Aug 4 08:30 Nonfarm Payrolls Aug 4 08:30 Unemployment Rate Aug 4 08:30 Trade Balance Federal Reserve Watch Speculative Forecasting Federal Reserve policy changes in coming months: After the Fed stood pat on rates at last week's meeting, the markets don't see another hike this year. The probability for one in December is now just south of 50%. 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 5% Dec 13 49% 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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