Rates, tech drive deals
NATIONAL MARKET UPDATE
Mortgage rates are now near historical lows. Freddie Mac’s latest Primary Mortgage Market Survey reports the national 30-year fixed mortgage rate is almost a full percentage point lower than a year ago.
In spite of the slowdown, deals are getting done thanks to technology. 34% of National Association of Realtors members had no closing delays. 58% are using virtual tours and 84% e-signature tools.
Meanwhile, real estate rebounded in China as CORVID-19 restrictions eased. Real estate sales in China’s 30 largest cities hit 5,976 on March 31, up from a low of 22 on February 8, at the height of the pandemic. Nice rebound.
REVIEW OF LAST WEEK
A LITTLE HOPE, A LOTTA FED… Hopeful COVID-19 data and more aggressive action from the Fed was all it took, and the S&P 500 scored its biggest weekly gain in 45 years over a holiday-shortened four-day trading week.
Spain and Italy saw the growth rate of new infections slow, while New York finally had a decline in hospitalizations. These developments raised hopes on Wall Street that the worst of the coronavirus outbreak might soon be over.
Then the Fed put in another $2.3 trillion in emergency lending to bolster the economy. We did have 6+ million more jobless claims, but this makes perfect sense as millions are forbidden from going to jobs that can’t be done from home.
The week ended with the Dow UP 12.7%, to 23,053; the S&P 500 UP 12.1%, to 2,790, and the Nasdaq UP 10.6%, to 8,154.
As stocks roared, bonds were up a bit to off a bit. The UMBS 4.0% ended down 0.19, to $106.61. In Freddie Mac’s Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate remained unchanged, near historical lows. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?… Attom Data reports that property taxes on single-family homes saw a 1% increase in 2019, “the smallest in the last three years,” showing local governments are clamping down on expenses.
THIS WEEK’S FORECAST
NO SURPRISES: HOME BUILDING SLOWS, RETAIL DROPS… March reports reflect the economic slowdown from coronavirus measures. Forecasts say Housing Starts receded as builders pulled back, and Retail Sales sank since so many brick and mortars were required to close.
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.
FEDERAL RESERVE WATCH
Forecasting Federal Reserve policy changes in coming months… The pandemic has made Fed rate forecasting very easy: no hikes till we get through the crisis. Note: In the lower chart, a 0% probability of change is a 100% certainty the rate will stay the same.
Current Fed Funds Rate: 0%-0.25%
| AFTER FOMC MEETING ON: | CONSENSUS |
| Apr 29 | 0.00%-0.25% |
| Jun 10 | 0.00%-0.25% |
| Jul 29 | 0.00%-0.25% |
Probability of change from current policy:
| AFTER FOMC MEETING ON: | CONSENSUS |
| Apr 29 | 0% |
| Jun 10 | 0% |
| Jul 29 | 0% |
