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INFO THAT HITS US WHERE WE LIVE … If you work in the housing market, the latest economic reports ought to put a smile on your face. March New Home Sales zoomed up a way better than expected 5.8%, and are now 15.8% ahead of their pace a year ago.Hitting a 621,000 unit annual rate, sales rose for the third month in a row, demonstrating unusual stability in what can be very volatile numbers, month to month. And remember, multi-family homes (townhomes, urban condos) aren’t counted in this report. There were 3,000 more unsold new homes where construction had yet to start, but the inventory of completed homes was unchanged.

Pending Home Sales took a little dip in March. This National Association of Realtors (NAR) index of contracts signed on existing homes had put up a string of impressive reads, so tight inventory was the problem, as demand is still strong. The NAR’s chief economist observed, “Home shoppers are coming out in droves this spring,” noting 42% of homes sold for asking price, or more. He forecast existing home sales at 5.64 million for the year, up 3.5% over 2016. The chief economist at a major insurance firm sees sales rising thanks to “solid job gains, faster wage growth, still low, albeit rising, mortgage rates, and faster household formations.”

>> Review of Last Week

MERCI BEAUCOUP… “Thank you very much,” said Wall Street to the voters of France as the week began. Sunday’s first round of that country’s presidential election narrowed the race to Emmanuel Macron, who wants tighter integration with the European Union, enjoying a comfortable lead over Marine Le Pen, who wants a referendum on EU membership. The EU is a positive to investors, so this result spurred a stock buying binge the first two days. That was enough, despite some later slumping, to send the three major market indexes up, as the Dow scored its best week of the year, and the tech-y Nasdaq crossed the 6,000 threshold for the first time ever.

Investor caution came Wednesday with President Trump’s outline for tax cuts, encouraging, but lacking details. We also had continuing geopolitical tension about North Korea, and the GDP-Advanced read–up just 0.7% in Q1. But average Q1 growth is just 0.9% since 2011, followed by stronger numbers the rest of the year. Plus,
the report said business fixed investment shot up at a 9.4% annual rate, a sign of improving economic growth, just like the solid Q1 corporate earnings reports we saw. And the Dow has just booked the best performance in the postwar era from Election Day through the 100th day in office for a first-term president.

The week ended with the Dow UP 1.9%, to 20941; the S&P 500 UP 1.5%, to 2384; and the Nasdaq UP 2.3%, to 6048.

Bond prices overall ended a tick down for the week, suffering from the good feelings driving up stocks. The 30YR FNMA 4.0% bond we watch finished the week down .03, at $105.30. For the week ending April 27, Freddie Mac’s Primary Mortgage Market Survey reported national average 30-year fixed mortgage rates rising ever so slightly for the first time in five weeks. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?… A property database reports home sellers in Q1 got an average 24% return on their purchase price, an average gain of $44,000. This was the highest average gain, in percent return and dollars, since Q3 of 2007! 

>> This Week’s Forecast

CONSUMERS SPEND, JOBS AND FACTORIES GROW, INFLATION AND RATES HOLD… The economic data flow will be heavy this week. Key reads will be Personal Spending, predicted up a bit, an expected growth in Nonfarm Payrolls and a nice boost in Hourly Earnings. The ISM Index should also stay in growth territory, solidly above 50, while the Core PCE Prices inflation measure should come in flat. Also flat is the forecast for the FOMC Rate Decision–thank you very much, Fed governors.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

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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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