Turning the corner
NATIONAL MARKET UPDATE
The housing market nationally is picking up. Zillow reports new listings grew 5.9% week-over-week, with the hard hit highest price tier up 8%. New listings are still down annually, but have gained now three weeks in a row.
Also growing smaller are the year-over-year declines in purchase mortgage applications. Week-over-week, national purchase mortgage activity has shown gains of 12% and 6% the past two weeks.
A new study reveals Google searches for “homes for sale” in 50 metros increased an average of 54% from 2020 lows. Freddie Mac’s chief economist notes, “Today purchase demand is only down 10% from a year ago.”
REVIEW OF LAST WEEK
ROLLER COASTER DOWN… Amid signs we may be starting to win the fight to control the coronavirus, cautious Fed speak and Chinese trade worries sent the relentlessly volatile stock market south.
Fed chair Powell said the economic outlook stays highly uncertain with significant risks that could slow the recovery. But sanguine analysts pointed out it’s the Fed’s job to watch downside risks so it can quickly respond.
U.S.-China trade tensions grew over threats to block semiconductors going to Huawei, and China’s cyber targeting of U.S. COVID-19 research. Yet University of Michigan Consumer Sentiment improved from April to May.
The week ended with the Dow down 2.7%, to 23,685; the S&P 500 down 2.3%, to 2,864; and the Nasdaq down 1.2%, to 9,015.
While stocks sank, bonds held on, or edged a tick lower. The UMBS 4.0% ended down 0.03, to $106.64. Freddie Mac’s Primary Mortgage Market Survey had the national average 30-year fixed mortgage rate up slightly, still near its all-time low. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?… Even after the terrible recent job losses, there are still 125 million Americans working and/or getting paid. And of the millions of jobs lost in April only about 38% were in the average income range of home buyers.
FEDERAL RESERVE WATCH
Forecasting Federal Reserve policy changes in coming months… The Fed chair’s cautious comments convinced Wall Street that today’s rock-bottom rates should prevail a good long time. 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 |
| Jun 10 | 0.00%-0.25% |
| Jul 29 | 0.00%-0.25% |
| Sep 16 | 0.00%-0.25% |
Probability of change from current policy:
| AFTER FOMC MEETING ON: | CONSENSUS |
| Jun 10 | 0% |
| Jul 29 | 1% |
| Sep 16 | 1% |
