It was an uneventful week for the data reports, as the majority of the interest waits for the Federal Reserve’s rate decision heading into the following week. One of the most notable reports is for New Home Sales, which had managed to greatly exceed the projections for the end of the year moving into January. It is an early sign that there is a surge in response to the week-to-week rate cuts we have been observing over the last two weeks.
The second largest data reports come from the PCE Index and preliminary projections for the Q1 GDP statistics. It is expected that the Federal Reserve’s decision to hold the current rate will hold true, but there is some optimism that a small rate cut may be a possibility.
Pending Home Sales
U.S. pending home sales shot up in December as falling mortgage rates brought buyers back into the market.
Pending home sales rose 8.3% in December from the previous month, according to the monthly index released Friday by the National Association of REALTORS®.
GDP (Prelim)
The U.S. grew at a robust 3.3% annual pace in the fourth quarter, showcasing the economy’s remarkable vigor despite high interest rates and still-elevated inflation. The Forecast of Growth was projected to be 2.0%.
Although growth slowed from the third-quarter’s surprising 4.9% clip, the back-to-back readings were the strongest since 2014, if the sharp recovery after the pandemic is set aside.
PCE Index
The rate of U.S. inflation — based on the Federal Reserve’s preferred PCE gauge — rose a mild 0.2% in December and pointed to smaller price increases in 2024.
Inflation picked up a bit at year end after declining in November, but there’s little evidence of emerging trouble. The increase in prices in the 12 months ended in December was unchanged at 2.6%.
Primary Mortgage Market Survey Index
• 15-Yr FRM rates are seeing an increase by 0.20%, with the current rate at 5.96%
• 30-Yr FRM rates are seeing an increase by 0.09%, with the current rate at 6.69%
MND Rate Index
• 30-Yr FHA rates are seeing a 0.05% increase for this week. Current rates at 6.20%
• 30-Yr VA rates are seeing a 0.08% increase for this week. Current rates at 6.25%
Jobless Claims
Initial Claims were reported to be 214,000 compared to the expected claims of 200,000. The prior week landed at 189,000.
What’s Ahead
All sights are set for the Federal Reserve’s rate decision coming next week. There are other notable reports alongside the rate decision including Non-farm Payroll statistics, Consumer Reports (Univ. Michigan), PMI numbers, and Shiller Price Home Index statistics, first reports of the year.
Rate locks play a crucial role in the mortgage application process, helping borrowers secure a favorable interest rate for their home loans. Here’s an explanation of the importance of rate locks and when and how to secure the best rate:
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When you visit your lender to get a mortgage for your home, they will tell you the maximum amount that you are allowed to borrow. But how do they reach this total and what factors do they take into consideration?
Retirement is a significant milestone in one’s life, symbolizing the culmination of years of hard work and dedication. As individuals approach this stage, meticulous planning becomes imperative to ensure a comfortable and financially secure future. Among the plethora of retirement planning options, real estate emerges as a challenging player, offering unique advantages that can enhance the overall strategy. Let’s discuss the pivotal role that real estate plays in retirement planning and why it deserves a prominent place in your financial portfolio.
The following week of CPI and PPI reports are typically lighter, with this week showing the same trend. There are a number of interesting interim reports that are worth noting however, including the Federal Reserve’s Beige Book which indicates the labor market has been cooling across most of the country. Following up is the Consumer Sentiment Reports, which is an excellent indicator for how the average consumer feels about their buying power, reflecting on the current economic conditions. Slower inflation, cheaper gas and a healthy economy have boosted optimism. Lastly, retail sales reports showing activity in December.