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INFO THAT HITS US WHERE WE LIVE … Approaching life with the right attitude is a great thing, and some recent housing market facts ought to help us do just that. The Mortgage Bankers Association Mortgage Applications Survey for the week ending April 28 reported the seasonally adjusted Purchase Index was 4% up from the week before. The March CoreLogic Home Price Index was up for the month, just 2.8% off its 2006 peak. But the property economist at a prominent economic research consultancy pointed out Case-Shiller’s latest report shows “the pace of house price gains slowed…with the smallest month-on-month rise since July last year.”

If home prices concern you, check out the Real House Price Index (RHPI) from a leader in settlement services. The RHPI measures price changes adjusted for the impact of income and interest rate changes on consumer house-buying power over time. In other words, it’s a good gauge of affordability. Guess what. Real house prices are 32.8% below the July 2006 peak, and 9.7% below the level in January 2000. Their chief economist adds, “wages continue to grow and the level of affordability in most markets remains high by historical standards.” No wonder Consumer Confidence is reported still at strong levels.

>> Review of Last Week

BACK TO BREAKING RECORDS… The stock market has returned to its record-breaking ways. The broadly based S&P 500 ended the week at a record-setting 2399, while the tech-heavy Nasdaq soared to 6101, another record finish. The blue-chip Dow didn’t set a record, but did close above 21000 for the first time since early March. There were good reasons for these upbeat feelings on Wall Street. You could start with Congress avoiding a government shutdown, having reached an agreement to keep the whole show funded through September. Things are also beginning to look better in the real economic world the rest of us live in.

The ISM Index revealed manufacturing grew in April, just at a slower rate. Core PCE Prices, the Fed’s favorite measure of inflation, is up 1.6% the past year, edging toward the central bank’s 2% target range. Then, the Fed didn’t raise rates at its meeting, saying “the fundamentals” supporting the continued growth of consumer spending “remained solid.” In fact, Personal Spending, a key economic driver, is now up 4.7% the past year. The Fed also said, “the labor market has continued to strengthen,” and Friday we saw
211,000 Nonfarm Payrolls were added in April, with the Unemployment Rate down to 4.4%, a level not seen since 2001.

The week ended with the Dow UP 0.3%, to 21007; the S&P 500 UP 0.6%, to 2399; and the Nasdaq UP 0.9%, to 6101.

In the bond market, Treasuries hung in there, but other bonds dipped, thanks to that nice April jobs report. The 30YR FNMA 4.0% bond we watch finished the week down .10, at $105.20. National average 30-year fixed mortgage rates remained virtually flat in Freddie Mac’s Primary Mortgage Market Survey for the week ending May 4. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… The National Association of Realtors reports that in 2016, FSBO (For Sale By Owner) properties sold for an average of $185,000, while homes with real estate agents sold for an average of $245,000, and with a lot less hassle.

>> This Week’s Forecast

INFLATION, RETAIL SALES BOTH CRANK UP… After remaining dormant in March, inflation is expected to head up in April. The Consumer Price Index (CPI) and the wholesale Producer Price Index (PPI) are both forecast higher for the month. The economy certainly seems to be getting into better shape, with Retail Sales predicted to be up strongly, both overall and excluding auto sales.

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This material is not from HUD or FHA and has not been approved by HUD or any government agency. Equal Housing Opportunity Lender

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224 W Washington #103, Sequim, WA 98382

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