![]() We keep hearing concerns that tight existing home inventories and rising prices will shrink sales, but the latest data lays those worries to rest. October Existing Home Sales increased 2.0%, to a 5.48 million annual rate. Sales grew in every major region with single family homes leading the way, although condos/coops went up a bit too. Yes, sales are down (less than 1%) versus a year ago, but we're still seeing the effects of Hurricanes Harvey and Irma, which sidelined home buyers. Once we start getting reports not colored by these storms, many expect an upward sales trend. Nearly half the homes sold In October were on the market less than a month, indicating demand is there. This is due to increasing incomes, a strengthening economy, near historically low mortgage rates and a growing appetite for home ownership. Freddie Mac's November 2017 Outlook expects this to be the best year for housing in a decade, with 6.13 million homes sold and 1.2 million housing starts. Their chief economist said, "construction will gradually pick up, helping to supply more homes in inventory-starved markets." The Fed's latest data reveals home equity hit $13.9 trillion in mid-2017, an all-time high. Review of Last Week The holiday season kicked off nicely on Wall Street, with the three main indexes returning to their winning ways. The broadly-based S&P 500 and the tech-heavy Nasdaq, in fact, finished Thanksgiving week at new all-time highs, while the Dow ended less than half a percent off its all-time record. There's no question stock prices are up both because a high percentage of corporate earnings reports are beating expectations, and because the economy appears to be in solid territory. The evidence? Higher wages, lower unemployment, high consumer confidence and rising home values. Consumers are even continuing their big-ticket spending on things such as vehicles, appliances and home renovations. Last week's economic data pretty much surprised to the upside, including the Leading Economic Index (LEI), Existing Home Sales covered above, and University of Michigan Consumer Sentiment. Durable Goods Orders Excluding Transportation moved up too, 0.4% in October, following an upwardly revised 1.1% September gain. Some analysts expect household holiday spending to be up about 4% over last year. Believe it or not, online shoppers spent $1.52 billion, just on Thanksgiving Day! The week ended with the Dow UP 0.9%, to 23558; the S&P 500 UP 0.9%, to 2602; and the Nasdaq UP 1.6%, to 6889. In the bond market, Treasuries ended lower but other bonds inched ahead. The 30YR FNMA 4.0% bond we watch finished the week UP .05, at $104.78. In Freddie Mac's Primary Mortgage Market Survey for the week ending November 22, national average 30-year fixed mortgage rates dipped slightly. This put them below their year-ago level for the first time in 2017. Where are interest rates headed? This Week's Forecast A week full of data will kick off with New Home Sales, forecast a but off for October, but after that, analysts expect a series of key "up" reads, including Pending Home Sales, Personal Spending, and Core PCE Prices, the Fed's favorite gauge of inflation. The Chicago PMI and the ISM Index, two important manufacturing measures, are also predicted to remain solidly in growth territory, well above 50. 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 November 27th - December 1st Nov 27 10:00 New Home Sales Oct 629K 667K Moderate Nov 28 10:00 Consumer Confidence Nov Nov 29 08:30 GDP - 2nd Estimate Nov 29 10:00 Pending Home Sales Nov 29 10:30 Crude Inventories Nov 29 14:00 Fed's Beige Book Nov 30 08:30 Initial Unemployment Claims Nov 30 08:30 Continuing Unemployment Claims Nov 30 08:30 Personal Income Nov 30 08:30 Personal Spending Nov 30 08:30 Core PCE Prices Nov 30 09:45 Chicago PMI Dec 1 10:00 ISM Index Federal Reserve Watch Speculative Forecasting Federal Reserve policy changes in coming months: There's literally no chance the Funds Rate will stay where it is in December, according to the Fed futures market, andd there's now a 50.1% probability we'll see another small hike in March. Note: In the lower chart, a 100% probability of change is a 100% certainty the rate will rise, while a 9% probability of change is a 91% certainty the rate will stay the same. Current Fed Funds Rate: 1.00%-1.25% After FOMC meeting on: Dec 13 1.25%-1.50% Jan 31 1.25%-1.50% Mar 21 1.50%-1.75% Probability of change from current policy: After FOMC meeting on: Dec 13 100% Jan 31 9% Mar 21 50% 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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