July 17, 2019 at 8:56am | Darel Ansley
Brought to you by Darel Ansley 
Inside Lending
Fannie Mae said housing confidence in June slipped a tick from May's near survey high, but is higher than a year ago, noting: "Growing e xpectations that mortgage rates will remain steady suggest improved stability for housing affordability."
Black Knight reports that at the end of June, 1.5 million more homeowners with mortgages could benefit from a refi. Their data says 8.2 million borrowers can now reduce their mortgages by 0.75%, saving an average of $266 a month.
Freddie Mac's chief economist observed, "the latest weekly purchase application data suggests homebuyer demand continues to rise, which is consistent with the slowly improving real estate data from the last two months."

DOW NOW 27 THOUSAND... On Wall Street, nothing is as uplifting as cheap money, so Fed Chair Jerome Powell's strong hint of a rate cut was all it took to lift the Dow past 27,000 for the first time in history.
In two days of testimony before Congress, Powell acknowledged our growing economy, but his concerns over trade uncertainties, slowing global growth, and weak inflation, affirmed investor expectations of a rate cut.  
Yes, the Fed's preferred Core PCE inflation gauge, at 1.7%, is under its 2% target, although other measures are within the range: Core CPI, up 2.1%, and Core PPI for wholesale prices, up 2.3%. Yet a rate cut is seen as certain.
The week ended with the Dow UP 1.5%, to 27332; the S&P 500 UP 0.8%, to 3014; and the Nasdaq UP 1.0%, to 8244.
The bond market was active, showing losses and gains. The 30YR FNMA 4.0% bond ended unchanged, at $103.36. Freddie Mac's Primary Mortgage Market Survey reported the national average 30-year fixed mortgage rate remained "at nearly three-year lows."  Remember, mortgage rates can  be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?... Harvard's Joint Center for Housing Studies reports total home equity more than doubled over seven years, from $7 trillion in 2011 to $15.5 trillion in 2018, thanks to rising home values with only modest increases in mortgage debt.

BUILDERS BUILDING, CONSUMERS CONSUMING... We expect to see home builders dialing it up in June, with modest gains in both Housing Starts and Building Permits. Consumers should also keep contributing to the economy, shown by continued growth in Retail Sales in June.
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 coming months... A 0.25% rate cut is certain in July, with 26% seeing a 0.50% dip. September should witness another slice, but no change in October, as the 38% probability of a cut is offset by a 17% probability of a hike. Note: In the lower chart, a 100% probability of change is a 0% probability the rate will stay the same.
Current Fed Funds Rate: 2.25%-2.50%
Jul 31 2.00%-2.25%
Sep 18 1.75%-2.00%
Oct 30
Probability of change from current policy:
Jul 31   100%
Sep 18    70%
Oct 30    55%

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  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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