“Ask five economists and you’ll get five different answers — six if one went to Harvard.” -Edgar Fiedler, American economist
After a spectacular January, Housing Starts took a break in February, dipping 7.0% to a 1.236 million annual rate, all due to multi-families. Starts are still close to a post-recession high, single-family starts up 2.9% for the month and 2.9% for the year.
Building Permits also fell for the month, but gained for the year at 4.6% for single-families and 10.6% for multi-families. So the future looks bright, with the National Association of Home Builders sentiment index historically high, though it slipped slightly for the month.
The National Association of Realtors (NAR) reports that in 2017 34% of all home purchases were made by Millennials, giving that generation the highest share of home buyers five years in a row. Millennials are also the most likely group to purchase through a real estate agent.
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Review of Last Week
A volatile week on Wall Street ended with the three major indexes down, although Friday’s economic data sent stock prices back up. Trade war worries and personnel changes at Secretary of State and chief economic adviser to the president drove the sell off.
Good economic reports included Industrial Production rising at its fastest pace in four months, while University of Michigan Consumer Sentiment shot up to a 14-year high, its 102 reading well above the long-term average of 86.
Small business optimism is at its second highest lever ever, and the CEO Confidence Survey hit 63, well into positive territory above 50. Even a dip in Retail Sales was positive, showing the economy isn’t so hot that the Fed will need more than three planned rate hikes this year.
The week ended with the Dow down 1.5% to 24947, the S&P 500 down 1.2% to 2752, and the Nasdaq down 1.0% to 7482.
For the most part, it was prices down and yields up in the bond market, hinting rates may rise. The 30YR FNMA 4.0% bond we watch ended the week down .02, at $102.36. But national average 30-year fixed mortgage rates actually fell for the first time in 2018 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: J.D. Power reports that 2017 was the first year purchase and refinance customers cited online/website as the most frequent method of submitting a mortgage application.
This Week’s Forecast
Analysts say we’ll see Existing Home Sales inch toward the 5.5 million annual rate, and New Home Sales back over 600,000 per year. Almost everyone expects the Fed to take a quarter percent hike in their FOMC Rate Decision.
Federal Reserve Watch
The Fed futures market sees a quarter percent rate hike this Wednesday, nothing in May, and then another quarter percent increase in June.
This Housing Market Monday blog post was written by Shane Campbell, a North Texas Team Preferred Lender with Lending Edge Mortgage. Shane Campbell is a mortgage expert with years of experience in the North Dallas housing market. He is passionate about serving clients while providing them with exceptional customer service and a smooth, professional process. Out of countless lenders, The North Texas Team handpicks the best to make sure you are provided a top-notch customer experience from contract to close. Shane Campbell (NMLS ID#: 1211817) can be reached at (817) 485-4155 or firstname.lastname@example.org. Who you work with matters!