July 29, 2019 at 8:46am | Darel Ansley
Brought to you by Darel Ansley 
Inside Lending
  I bought some powdered water, but I didn't know what to add.--Steven Wright, American comic  
For the week of july 29, 2019

June had a healthy rebound in New Home Sales, up a strong 7.0%, to a 646,000 annual rate. Inventories rose and supply should also increase, as the pace of new construction picks up to meet the higher pace of sales.
Existing Home Sales retreated 1.7% in June to a 5.270 million annual rate, but the underlying trend remains positive.  Q2 sales as a whole were up 1.4% versus Q1's gain, the second straight quarterly gain after four consecutive declines.

Freddie Mac's chief economist noted that, with low mortgage rates, "purchase application demand has responded, rising steadily over the last two months to the highest year-over-year change since the fall of 2017." 
NEW HOPES, NEW HIGHS... Contradicting slowdown (and recession!) talk from some economic pundits, upbeat corporate earnings reports and encouraging Q2 GDP growth sent the S&P 500 and the Nasdaq to record highs. 
Yes, the Dow gained only 0.1%, but it was stymied by one major stock's slide thanks to purely company-specific issues.  With more than 40% of the S&P 500 reporting Q2 earnings, the majority came in better than expected.
Plus, Q2 GDP growth, at 2.1%, was way stronger than feared, with consumer spending, the biggest part of our economy, up 4.3%! Yet the Fed should still cut rates this week, responding to low inflation and slowing global growth.
The week ended with the Dow UP 0.1%, to 27192; the S&P 500 UP 1.7%, to 3026; and the Nasdaq UP 2.3%, to 8330.
Higher GDP trimmed interest in safe haven bonds. Still, the 30YR FNMA 4.0% bond went UP .03, to $103.50. The national average 30-year fixed mortgage rate, hovering near three-year lows, fell in  Freddie Mac's Primary Mortgage Market Survey.  Remember , mortgage rates can  be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?... J ohn Burns Real Estate Consulting reports: "The  plunge in mortgage rates has created home ownership possibilities for 2.7 million more households as well as move-up possibilities for current homeowners with enough equity."
PENDING HOME SALES UP, INFLATION MILD, MANUFACTURING AND JOBS GROW, THE FED CUTS... The Pending Home Sales index of contracts signed on existing homes is forecast up for another month. The Fed's favorite inflation gauge, Core PCE Prices, should be mild. So everyone expects a cut in the Fed Funds Rate despite positive July Manufacturing and June Employment reports.
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... Everyone sees at least a quarter percent rate cut from the Fed this week. There's a good chance of another quarter percent dip in September, but none in October, the 37% probability of a cut offset by an 18% chance 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    67%
Oct 30    55%
  Always take the opportunity to educate customers about what you do. By educating clients, you are seen as an expert and gain their trust, so they'll keep coming back, and refer you to others.  
  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  


You message has been sent!

Send us a Message

You agree to receive automated promotional messages from AGENT509 | Keller Williams Realty regarding real estate information and education.Click here for terms and privacy policy. Message frequency varies. To opt out of receiving messages from me, text STOP to cancel. Reply HELP for help. Message and data rates may apply.