Kevin Brierton: Inside Lending - Week of 3-20-23 - Ron Everingham (All Seasons Properties)

NATIONAL MARKET UPDATE

Increasing for the first time in six months, housing starts shot up 9.8% in February, with both single-family and multi-unit projects posting gains. Building permits did even better—up 13.8%, the largest monthly gain in two years.

Home builders are clearly feeling more optimistic. The homebuilder sentiment index headed up for the third straight month, indicating the housing market is starting to find its footing in the present mortgage rate environment.

Realtor.com reports active inventory keeps climbing—up 61% from a year ago. Homes are spending more time on the market than last year, but they’re still selling quicker than before the pandemic, suggesting continuing buyer demand.

REVIEW OF LAST WEEK

ROLLER COASTER MOSTLY UP… It was a volatile week on Wall Street as traders put their money into big names far from the banking sector, pushing the S&P 500 and Nasdaq up nicely, while the Dow slipped only a tick.

Investors were concerned about the recent bank failures, but many took comfort in the swift actions by the Fed, the Treasury, and the FDIC to support depositors and quell fears that could cause a bank run.

We did get weaker than expected retail sales in February, but CPI inflation fell to 6.0%, the smallest annual increase since September 2021, while initial jobless claims sank back below 200,000.

The week ended with the Dow down 0.1%, to 31,862, the S&P 500 UP 1.4%, to 3,917, and the Nasdaq UP 4.4%, to 11,631.

Bonds overall made strong gains, the UMBS 5.5% up 1.08 in the last two weeks, to $100.29. The national average 30-year fixed mortgage rate headed down 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… Freddie Mac notes, “turbulence in the financial markets is putting significant downward pressure on rates,” sparking buyer demand. Last week, purchase mortgage applications rose a seasonally adjusted 7%.

	THIS WEEK’S FORECAST
	*NEW AND EXISTING HOME SALES, THE FED RATE DECISION…* Reports on the February housing market are expected to show *Existing Home Sales* on the rebound, but *New Home Sales* flat or posting a small decline. The biggest focus will be on Wednesday’s *FOMC Rate Decision.* The Fed is expected to hike just a quarter percent, though we could see the central bankers take a pause.

THIS WEEK’S FORECAST

NEW AND EXISTING HOME SALES, THE FED RATE DECISION… Reports on the February housing market are expected to show Existing Home Sales on the rebound, but New Home Sales flat or posting a small decline. The biggest focus will be on Wednesday’s FOMC Rate Decision. The Fed is expected to hike just a quarter percent, though we could see the central bankers take a pause.

FEDERAL RESERVE WATCH

Forecasting Federal Reserve policy changes in coming months. Given the recent news around banking, Wall Street feels we’ll only see a quarter percent rate hike this week, none in May, then a rate cut in June! Note: In the lower chart, a 73.8% probability of change is a 73.8% probability the rate will rise. Current rate is 4.50%-4.75%.