QUOTATION OF THE WEEK
“Always live in the ugliest house on the street–then you don’t have to look at it.” –David Hockney, English artist
INFO THAT HITS US WHERE WE LIVE
It was a welcome shock to see May New Home Sales spike 6.7% in May, up 14.1% from a year ago, at a 689,000 annual rate. And with housing starts recently at a recovery high, we’re now building supply.
But May Pending Home Sales slipped a modest 0.5%. This index of contracts signed on existing homes points to a small dip in those closings in the next month or two.
Freddie Mac’s chief economist notes mortgage rates have stabilized and “the economy and housing market overall are on solid footing this summer.” He added, “Home price growth…is expected to moderate.”
BUSINESS TIP OF THE WEEK… Rather than selling customers, focus on servicing them. Anticipate their needs, meet those needs and sales will happen. No one wants to be sold, but everyone appreciates great service.
REVIEW OF LAST WEEK
>> Review of Last Week
TRADE BARRIER… Forget all the yak about tariffs on China. The trade barrier that seems firmly in place is the one on Wall Street holding stock prices in check, sending the three major market indexes south for the second week in a row.
Cooler heads say the impacts of a trade war–if there ever is one–are likely to be temporary. Meanwhile, Personal Income and Spending went up in May, and Q1 GDP achieved 2.0% growth, decent for that quarter.
Plus, the Chicago PMI, at 64.1, showed Midwest manufacturing expanding, while the Michigan Consumer Sentiment index rose to 98.2. And for the first time in more than six years, Core PCE inflation hit 2.0%, another sign of a strong economy.
The week ended with the Dow down 1.5%, to 24216; the S&P 500 down 1.3%, to 2718; and the Nasdaq down 2.4%, to 7510.
Bonds finished the first half of the year flat to up a bit. The 30YR FNMA 4.0% bond ended UP .19, to $101.92. Freddie Mac’s latest Primary Mortgage Market Survey saw the national average 30-year fixed mortgage rate retreat, down now four of the last five weeks. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?
Houzz.com reports recent home buyers are a bigger part of the renovation market, and when a home sells, kitchens and master bathrooms yield the highest return on investment (ROI).
This Week’s Forecast
MANUFACTURING AND JOBS GROW, A PEEK INTO THE FED… June’s ISM Index of manufacturing is forecast well above 50, indicating solid expansion. Around 200,000 new Nonfarm Payrolls a month is healthy job growth, and June’s number should land in that territory. FOMC Minutes let us eavesdrop on the last Fed meet, for insight on their next move.
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.
