Market Snapshot | Sept. 17th , 2018 | Darel Ansley | People's Bank
September 17, 2018 | Jeff Hallman



 
   
MARKET UPDATE
 
   
Black Knight reports that in Q2 this year, tappable equity for homeowners with mortgages passed $6 trillion for the first time in history. And this happened even with the recent slowdown in home price growth.  Black Knight defines tappable equity as the total amount of equity a homeowner with a mortgage has available to borrow against before reaching a maximum loan-to-value ratio of 80%. Now, rising home prices have pushed the total amount of such equity to a record high, Black Knight Data and Analytics Executive Vice President Ben Graboske explained.  Freddie Mac's chief economist thinks the  "spectacular stretch of solid job gains and low unemployment should help keep homebuyer interest elevated  . However, mortgage rates will likely also move up."

This doesn't worry the chief economist at a large regional real estate firm, since  "low unemployment rates encourage employers to raise wages," which can cover higher loan costs. He also sees "more homes coming on the market."
 

 
   
REVIEW OF LAST WEEK
 
   
STOCKS REBOUND OFF BOOMING ECONOMY... Stocks returned to their winning ways as i  nvestors saw tariff threats as negotiating tactics and focused instead on growth in corporate earnings and the overall economy.
Industrial Production set a new record high, Retail Sales are up a strong 6.6% from a year ago, and  Americans' confidence in the U.S. economy and in their own well-being stands near a 14-year high.  
Plus, workers are actually doing better than corporations. Since the end of last year, total wages have increased by a $200 billion annual rate, while corporate profits were up by just $100 billion annualized!
The week ended with the Dow UP 0.9%, to 26155; the S&P 500 UP 1.2%, to 2905; and the Nasdaq UP 1.4%, to 8010.
Bond prices dipped for the week after all the good economic data. The 30YR FNMA 4.0% bond ended down .34, at $101.11. Freddie Mac's     latest Primary Mortgage Market Survey saw the   national   average 30-year fixed mortgage rate up for the third week in a row.  Remember, mortgage rates   c  an be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?...PropertyShark reports 83% of Generation Z (born1995 to 2010) plans to buy a home in the next five years and get this: the 'Instagram Generation' would sacrifice location and commuting distance for size and amenities.
 

 
   
THIS WEEK'S FORECAST
 
   
NEW HOMES GOING UP, EXISTING HOMES SELLING... August Housing Starts are expected to shoot past a 1.2 million annual rate. Existing Home Sales should also spring back to a 5.37 million yearly pace.
NOTE: Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.
 

 
   
FEDERAL RESERVE WATCH
 
   
Forecasting Federal Reserve policy changes in coming months... The Fed futures market is dead certain about a rate hike a week from Wednesday, but it sees no moves again until December. Note: In the lower chart, a 100% probability of change is a 0% probability the rate will stay the same.
Current Fed Funds Rate: 1.75%-2.00%
AFTER FOMC MEETING ON: CONSENSUS
Sep 26
2.00%-2.25%
Nov 8
2.00%-2.25%
Dec 19 2.25%-2.50%
Probability of change from current policy:
AFTER FOMC MEETING ON: CONSENSUS
Sep 26
100%
Nov 8
    6%
Dec 19
   80%
 

Share

check_circle

You message has been sent!

Send us a Message: