QUOTATION OF THE WEEK
“Those are my principles, and if you don’t like them…well, I have others.” –Groucho Marx, American comedian, writer and stage, film, radio and TV star
INFO THAT HITS US WHERE WE LIVE
As expected by nearly everyone breathing, the Fed hiked the Funds Rate 0.25% last week, but that should cause no immediate concern about mortgage rates. Fact is, the Fed rate directly affects only short-term loans.
Freddie Mac’s chief economist explains: “a much smaller segment of mortgage loans in today’s market are pegged to short-term rate movements.” Those are adjustable rate mortgages (ARMs), now 8% of outstanding loans.
Hey, flippers are back. Attom Data Solutions reports home flipping in the first quarter hit its highest rate in six years. And 35% of the flips were originally purchased with financing, the most since 2008.
BUSINESS TIP OF THE WEEK… Set high standards, but don’t be a perfectionist. You want to act in a timely manner, which won’t happen if you wait until everything’s perfect. It never is, so you wind up late to the party in a still imperfect world.
REVIEW OF LAST WEEK
>> Review of Last Week
INVESTORS IGNORE HEADLINES… Last week’s news featured hot topics–global trade, North Korea, the Fed–but they didn’t have much effect on Wall Street. The Nasdaq went up nicely, the S&P 500 ended flat, while only the Dow lagged.
Trade tensions were seen as negotiating tactics, North Korea reaffirmed its commitment to completely denuclearize, and the Fed only threw an extra rate hike into this year’s “dot-plot” because the economy is doing so well.
How well? May Retail Sales shot up 0.8%, while continuing unemployment claims dropped to their lowest number since 1973 when the labor force was about half its size today. Oh, and U. of Michigan Consumer Sentiment climbed to 99.3.
The week ended with the Dow down 0.9%, to 25090; the S&P 500 flat, at 2779; and the Nasdaq UP 1.3%, to 7746.
Lots of action in bonds, and most finished with gains. The 30YR FNMA 4.0% bond ended UP .05, to $101.64. After dropping two weeks in a row, the national average 30-year fixed mortgage rate rose in Freddie Mac’s latest 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?
A major national real estate site reports that the homeownership rate increased in 2017 for the first time since 2004!.
This Week’s Forecast
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
