October 21, 2019 at 8:16am | Darel Ansley
Following their 12-year high in August, Housing Starts took a break in September, off 9.4%, but at a still decent 1.256 million annual rate. The dip was all from multi-families--single-family starts were up for the fourth month in a row.
Since bottoming in February, single-family starts have trended upward, and are now near new highs. No wonder October's National Association of Home Builders sentiment index hit its best read in 20 months.  Freddie Mac's chief economist noted, "economic trends like employment and homebuilder sentiment are encouraging," observing "the housing market remains on the upswing."

COMPANIES ARE STILL MAKING MONEY!... The gloomy recessionistas got foiled again, as the first big week of corporate earnings season showed companies made more money in Q3 than expected, and stocks dutifully shot up. 
The Dow was off a tick, but that was after two of its 30 components had bad news hammer their prices, dragging down the whole party. China saw its slowest economic growth in over 27 years, which could speed a U.S. trade deal.
Retail Sales were off in September but up a solid 4.1% the past year. Excluding volatile autos, building materials, and gas, retail sales are up an annualized 8.6% rate since the start of 2019, the fastest year-to-date growth since 1992!
The week ended with the Dow down 0.2%, to 26,770; the S&P 500 UP 0.5%, to 2,986; and the Nasdaq UP 0.4%, to 8090.
Bonds overall edged up, though some went south, others sideways. The 30YR FNMA 4.0% bond ended unchanged, at $103.64. In  Freddie Mac's Primary Mortgage Market Survey, the national average 30-year fixed mortgage went up, yet remains more than 1% lower than a year ago. Remember , mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?... Thanks to today's mortgage rates, Fannie Mae forecasts mortgage originations will top $2 trillion in 2019, making it the best year since 2016. If the trendline continues, originations could reach a 12-year high by year-end.

EXISTING HOME SALES EDGE UP, NEW HOME SALES SLIP DOWN... We'll get key sales reads on the September housing market, with Existing Home Sales expected up over 5.5 million units annually, and New Home Sales down a tick, though still over 700,000 units for the year.  NOTE: Weaker economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.

Forecasting Federal Reserve policy changes in the coming months... The shock to Wall Street would be if we don't get a Fed rate cut in nine days, but that should be it through the end of January. Note: In the lower chart, a 91% probability of change is only a 9% probability the rate will stay the same.
Current Fed Funds Rate: 1.75%-2.00%
Oct 30 1.50%-1.75%
Dec 11  1.50%-1.75%
Jan 29 1.50%-1.75%
Probability of change from current policy:
Oct 30    91%
Dec 11     32%
Jan 29     48%

  Darel Ansley Darel Ansley
Senior Real Estate Loan Officer
NMLS# 500247

901 North Mission Street
Wenatchee, WA 98801
Office: (509) 664-5324
Mobile: (509) 860-3301
Fax: (509) 664-5315
  Peoples Bank  


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