April 23, 2018 | Jeff Hallman
Inside Lending
  Darel Ansley Darel Ansley
Senior Real Estate Loan Officer
NMLS# 500247
901 North Mission Street
Wenatchee, WA 98801Office: (509) 664-5324
Mobile: (509) 860-3301
Fax: (509) 664-5315
  Peoples Bank  
For the week of April 23, 2018 — Vol. 16, Issue 17
>> Market Update
QUOTATION OF THE WEEK... "It is more fun to talk with someone who doesn't use long, difficult words but rather short, easy words, like 'What about lunch?'" --A. A. Milne, English author
INFO THAT HITS US WHERE WE LIVE... Housing Starts were up 1.9% in March, at a 1.319 million annual rate. Yes, the gain was all from the volatile multi-family sector, but single-family starts are up 5.2% the past year and keep driving trend growth.
Building Permits gained 2.5% in March to a 1.354 million annual rate. Single-families dipped here too, but are still up for the year, and  t he number of them under construction is the highest since the last recession.
Do note, housing gains over the last twelve months have occurred despite higher mortgage rates. In fact, the latest Mortgage Bankers Association survey reports purchase applications up 6% for the week and 10% higher than a year ago.
BUSINESS TIP OF THE WEEK... Rare is the day anyone gets through the whole to-do list, so quit feeling that you're never doing enough. Instead, f eel good about what you accomplish today, to set yourself up for a successful tomorrow.

>> Review of Last Week

HANGING IN THERE... This year's Wall Street theme is volatility, and investors demonstrated it perfectly, sending stock prices up three days, then down the last two. But hey, the three big market indexes finished ahead for the second week in a row. 
Negative drivers were geopolitical tensions and worries that rising wages and tariffs would send inflation and interest rates higher. But  corporate earnings are strong, and economic growth should gain with lower  taxes and higher government spending and business investments.
More evidence of a growing economy came with Retail Sales smartly up 0.6% in March, a healthy 4.5% ahead of a year ago. Plus, manufacturing continues to expand, as Industrial Production and Capacity Utilization went up nicely too.
The week ended with the Dow UP 0.4%, to 24463; the S&P 500 UP 0.5%, to 2670; and the Nasdaq UP 0.6%, to 7146.

U.S. inflation worries hurt bonds, although negative Eurozone data kept investors involved. The 30YR FNMA 4.0%, bond we watch ended the week down .58, at $101.69. In Freddie   Mac's latest Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate hit its highest level since January 2014. Remember,  mortgage rates c an be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?...ATTOM Data Solutions reports that owners of single family homes paid more than $293 billion in property taxes in 2017, a 6% increase over the prior year. 
>> This Week's Forecast
GROWING:  HOME SALES , GDP, MANUFACTURING, EMPLOYMENT COSTS ... Things economic should continue to look up, including: March Existing and New Home Sales; the Q1 GDP - Advance d read on economic growth; the Chicago PMI index of Midwest manufacturing activity; and the Employment Cost Index, whose gain is good for wages but bad for inflation.
>> 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 Apr 23 - Apr 27
Date Time (ET) Release For Consensus Prior Impact
Apr 23
Existing Home Sales Mar
5.57M 5.38M Moderate
Apr 24
New Home Sales Mar
631K 618K Moderate
Apr 24
Consumer Confidence Apr
126.1 127.7 Moderate
Apr 25
Crude Inventories 04/21 NA -1.07M Moderate
Apr 26
Initial Unemployment Claims
225K 232K Moderate
Apr 26
Continuing Unemployment Claims
NA 1.863M Moderate
Apr 26
Durable Goods Orders Mar
1.9% 3.1% Moderate
Apr 27
GDP - Advanced Q1
2.1% 2.9% HIGH
Apr 27
Employment Cost Index Q1 0.7% 0.6% HIGH
Apr 27
09:45 Chicago PMI Apr
56.3 57.4 HIGH
Apr 27
U. of Michigan Consumer Sentiment - Final Apr
98.0 97.8 Moderate

>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months... The Fed Funds Futures market is still strongly betting on no rate hike in May, then a quarter percent uplift in June, which will hold through the summer. Note: In the lower chart, a 2% probability of change is a 98% certainty the rate  will stay the same.
Current Fed Funds Rate: 1.50%-1.75%
After FOMC meeting on: Consensus
May 2 1.50%-1.75%
Jun 13 1.75%-2.00%
Aug 1 1.75%-2.00%
Probability of change from current policy:
After FOMC meeting on: Consensus
May 2          2%
Jun 13        98%
Aug 1




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