QUOTATION OF THE WEEK
“Everything in life is somewhere else, and you get there in a car.” –E. B. White, American writer
INFO THAT HITS US WHERE WE LIVE
Heading north for the second month in a row, Pending Home Sales posted a 0.4% gain in March. Tight inventories in many markets kept this measure of contracts signed on existing homes down from a year ago.
Are homes really less affordable? The latest First American Real House Price Index pegs real home prices 33.7% below their 2006 pre-recession peak. The index factors in the rising incomes and still low interest rates that boost consumer house-buying power.
Freddie Mac’s chief economist observed: “First-time buyers appear to be having more success… despite higher borrowing costs and home prices…. First timers represent 46% of purchase loans, up from 43%…a year ago.”
REVIEW OF LAST WEEK
>> Review of Last Week
ALL’S WELL THAT ENDS WELL… Another week of volatile daily moves in the stock market all ended well, the Dow and the S&P 500 only modestly to the downside, the Nasdaq with a 1.3% gain. The Fed didn’t hike rates (no surprise), but there were concerns.
Core PCE Prices, the Fed’s favorite inflation measure, was up 0.2% in March and up 1.9% the last year. This is close enough to their 2% inflation target that some worried we may see more aggressive rate hikes.
A less-than-expected 164,000 Nonfarm Payrolls were added in April. But the trend in job growth remains strong, with the three-month average above 200,000, and unemployment now at 3.9%, an 18-year low, while wages rise at a healthy pace.
The week ended with the Dow down 0.2%, to 24263; the S&P also down 0.2%, at 2663; but the Nasdaq UP 1.3%, to 7210.
April’s nonfarm payrolls miss sent some traders scurrying to bonds. The 30YR FNMA 4.0% bond ended UP .03, at $101.84. After edging up most of April, the national average 30-year fixed mortgage rate dipped 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?
Analyzing home sales from 2011 to 2017, Attom Data Solutions found that May is the best month to sell, with homeowners realizing the biggest premiums above estimated market value, averaging almost 6%.
This Week’s Forecast
PUTTING THE MICROSCOPE ON INFLATION… Inflation has remained south of the Fed’s 2% target. However, this week’s Core CPI inflation read is forecast to hit a monthly rate that, if maintained for the next 12 months, would exceed that annual target.
