Kevin Brierton: Inside Lending - Week of 3-6-23 - Ron Everingham (All Seasons Properties)

NATIONAL MARKET UPDATE

The Pending Home Sales index of signed contracts on existing homes rose in January for the second straight month, up 8.1%, though still down from a year ago. Gains were nationwide and foretell higher sales in February and March.

In January, spending on residential construction came in at a decent $847.4 billion annual rate, just a tick below December’s figure. This indicates more new homes will become available later this year.

Best of all, ShowingTime’s index of home showings posted its largest monthly increase ever. Their VP of sales and industry noted, “a larger increase than any January before, after last year’s rapid cooldown, is significant.”

REVIEW OF LAST WEEK

LOSING STREAK SNAPPED… Traders broke the stock market’s weeks-long losing streak as they went for the notion that despite signs of a resilient economy, we’re very close to the peak of Fed rate hikes.

Those signs included the ISM Non-Manufacturing Index showing the huge services sector of the economy still expanding, rising Q4 Productivity and Unit Labor Costs, and super low Initial Jobless Claims.

But allaying fears of the Fed staying heavy on hikes, the Atlanta Fed President said he favors a quarter percent bump in March and that the Fed needs to go to 5.00-5.25% and then leave the rate there well into 2024.

The week ended with the Dow UP 1.7%, to 33,391, the S&P 500 UP 1.9%, to 4,046, and the Nasdaq UP 2.6%, to 11,689.

Bonds ended the week a tick down overall, with the UMBS 5.5% unchanged, at $99.21. The national average 30-year fixed mortgage rate continued to edge up 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… Realtor.com reports the supply of for-sale homes in February was up 67.8% versus a year ago. This was put to homes being listed for 67 days—but that’s still less time on the market than before the pandemic.

	THIS WEEK’S FORECAST
	WEEKLY JOBLESS CLAIMS, MARCH JOBS… A light week for economic reports, but we’ll be watching weekly *Initial Unemployment Claims, expected to stay below 200,000, and the February jobs report. Economists are forecasting a more modest gain in Nonfarm Payrolls* than we saw in January. However, no one is predicting the kind of labor market slowdown the Fed wants to see.

THIS WEEK’S FORECAST

WEEKLY JOBLESS CLAIMS, MARCH JOBS… A light week for economic reports, but we’ll be watching weekly Initial Unemployment Claims, expected to stay below 200,000, and the February jobs report. Economists are forecasting a more modest gain in Nonfarm Payrolls than we saw in January. However, no one is predicting the kind of labor market slowdown the Fed wants to see.

FEDERAL RESERVE WATCH

Forecasting Federal Reserve policy changes in coming months. Fed watchers still feel we’ll get a series of quarter percent rate hikes at the next three FOMC meetings. Note: In the lower chart a 100% probability of change is a 100% probability the rate will rise. Current rate is 4.50%-4.75%.