 National Market Update | ||
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After their upside surprise in April, New Home Sales blasted ahead 16.6% in May, to a 676,000 annual rate. Sales are up 12.7% from a year ago, the 12-month average just 1.1% below February’s post-2008 high.Existing Home Sales dropped 9.7% in May, to 3.910 million annually. But those contracts were signed at the height of the lockdowns, while New Home Sales, logged at contract signing, are a timelier indicator of current activity.Freddie Mac: “After the Great Recession, it took more than ten years for purchase demand to rebound to pre-recession levels, but in this crisis, it took less than ten weeks,” helped by “the low mortgage rate environment.”
 REVIEW OF LAST WEEK | ||
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WALL STREET DIDN’T FEEL WELL… Investors lost their appetite for risk and the resulting selloff sank all three major market indexes. A rising coronavirus case count in some Southern states was all it took. Before the unfortunate case count news, stocks were doing fine, just like the recovering economy. Durable Goods Orders rebounded 15.8% in May and Personal Spending spiked 8.2%, the largest monthly gain in history.Initial jobless claims dropped 12 weeks in a row. Personal income fell in May versus April, which was inflated by government stimulus checks. Take those out and income grew 1.6%. Continued economic progress is expected.The week ended with the Dow down 3.3%, to 25,016; the S&P 500 down 2.9%, to 3,009; and the Nasdaq down 1.9%, to 9,757.
With stocks under pressure, bonds rose. The UMBS 3.5% ended up 0.01, at $105.17. The national average 30-year fixed mortgage rate remained unchanged from its prior week all-time low in Freddie Mac’s 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?… Zillow says homes are flying off the market at the quickest pace in two years. Homes sold in the second week of June were on the market about 22 days, the lowest number since June 2018.
 THIS WEEK’S FORECAST | ||
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PENDING HOME SALES, JOBS, CONSUMER CONFIDENCE REBOUND… The Pending Home Sales index of contracts signed on existing homes, a good read on buyer activity, is forecast to bounce back substantially in May. Also bouncing should be Nonfarm Payrolls, expected to report several million more jobs, giving a nice boost to Consumer Confidence.The bond market will close early on Thursday, and all financial markets will close Friday, July 3, in observance of Independence Day. Have a safe and Happy Fourth!NOTE: Weaker economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.
 FEDERAL RESERVE WATCH | ||
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Forecasting Federal Reserve policy changes in coming months… The Fed funds futures market currently sees no rate hikes for quite a while. Note: In the lower chart, a 0% probability of change is a 100% certainty the rate will stay the same.Current Fed Funds Rate: 0%-0.25%AFTER FOMC MEETING ON:CONSENSUSJul 29 0.00%-0.25%
Sep 16 0.00%-0.25%Nov 50.00%-0.25%
Probability of change from current policy:AFTER FOMC MEETING ON:CONSENSUSJul 29 0%Sep 16 0%Nov 5 0%
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