Homeowners will be on the move
A new industry survey found nearly half of all current homeowners plan to move this decade. That should allay concerns that the housing market might stagnate from too many Baby Boomers aging in place.
The Mortgage Bankers Association reports the spring homebuying season has officially begun. Last month was the strongest January for purchase mortgage applications in 11 years–and the demand continues!
National Association of Realtors (NAR) data shows that at the end of 2019, the typical American family could more easily afford a home at the national median sale price than at any time in the past year.
REVIEW OF LAST WEEK
BULLS SEND A VALENTINE… Last Friday was February 14 and bullish investors sent the market a valentine, showing their love for stocks by propelling the three major indexes to their second straight weekly gains.
The coronavirus story continued to hasten concerns about slower growth, but positive vibes prevailed, though cautiously expressed after January Retail Sales rose 0.3% overall, but clothing sales sank 3.1%.
Then just as economists began worrying about the strength of consumer spending, they were hit flush in the face with the well-respected Michigan Consumer Sentiment Index rocketing to a near 15-year high!
The week ended with the Dow UP 1.0%, to 29,398; the S&P 500 UP 1.6%, to 3,380; and the Nasdaq UP 2.2%, to 9,731.
Wary optimism kept bond prices in check, with some issues off a bit. The 30YR FNMA 4.0% bond ended down .25, to $104.59. Freddie Mac’s Primary Mortgage Market Survey saw the national average 30-year fixed mortgage rate tick up slightly from its prior three-year low. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?… Freddie Mac’s chief economist notes, “With mortgage rates hovering near a five-decade low, refinance activity is once again surging, rising to the highest level in seven years.”
FEDERAL RESERVE WATCH
Forecasting Federal Reserve policy changes in coming months… With uncertainty over the economic effects of the coronavirus, Wall Streeters are increasingly leaning to a rate cut later in the year. Note: In the lower chart, a 10% probability of change is a 90% probability the rate will stay the same.
Current Fed Funds Rate: 1.50%-1.75%
| AFTER FOMC MEETING ON: | CONSENSUS |
| Mar 18 | 1.50%-1.75% |
| Apr 29 | 1.50%-1.75% |
| Jun 10 | 1.50%-1.75% |
Probability of change from current policy:
| AFTER FOMC MEETING ON: | CONSENSUS |
| Mar 18 | 10% |
| Apr 29 | 28% |
| Jun 10 | 47% |
