QUOTATION OF THE WEEK
“A lot of people ask me if I were shipwrecked, and could only have one book, what would it be? I always say ‘How to Build a Boat.'” –Steven Wright, American comedian
INFO THAT HITS US WHERE WE LIVE
Just like Housing Starts the prior week, New Home Sales closed out 2017 at their highest annual total in a decade, 14.1% ahead of a year ago. They were down 9.3% in December, but the post-hurricanes boost is over.
Existing Home Sales ended the year in even better shape, posting their best totals since 2006. They slipped 3.6% in December, but still finished 1.1% up from a year ago. Demand stays strong, but inventories are a concern in many markets.
The latest Mortgage Bankers Association Weekly Applications Survey reported the seasonally adjusted Purchase Index up 6%, to its highest level since April 2010.
BUSINESS TIP OF THE WEEK Always follow up. Respond promptly to emails, voice mails and online comments from everyone–current, potential and past clients, your community and referral network.
Review of Last Week
WHAT? ANOTHER RECORD-BREAKING WEEK?… Yup! Investors pushed stocks to new record highs, as the Dow, S&P 500 and Nasdaq all bested 2% gains for the week, powered by companies’ stronger-than-expected earnings reports, with 81% beating sales expectations!
The Q4 GDP-Advance estimate showed 2.6% economic growth, lower-than-expected, but a nice improvement over the 1.8% Q4 growth a year ago. Plus, consumer spending (about 70% of GDP) was up 3.8%, while business spending on equipment shot up 11.4%.
That investment in equipment was reflected in December’s Durable Goods Orders, up an unexpected 2.9%, which economists said confirms an improving economy. Finally, both [www.dol.gov/ui/data.pdf]weekly initial jobless claims and continuing claims remain historically low.
The week ended with the Dow UP 2.1%, to 26617; the S&P 500 UP 2.2%, to 2873; and the Nasdaq UP 2.3%, to 7506.
Many bonds ended in negative territory, though the damage wasn’t too bad to the 30YR FNMA 4.0% bond we watch, down just .02, to $103.56. Freddie Mac’s latest Primary Mortgage Market Survey had national average 30-year fixed mortgage rates up for the third week in a row, but still below rates a year ago. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW? Trulia’s latest rental analysis says rents went up 3.1% overall in 2017, even as “the number of households renting has been declining while homeownership increased.”
This Week’s Forecast
EVERYTHING UP BUT THE FED RATE… No change is expected with the FOMC Rate Decision. The Pending Home Sales index of contracts signed on existing homes is forecast up, foretelling higher sales a few months out. Jobs are key to housing, so predicted gains in Nonfarm Payrolls and Hourly Earnings are welcome. The ISM Index and Chicago PMI may slip, but still show strong manufacturing growth.
