INFO THAT HITS US WHERE WE LIVE... The last week of the year gave us the encouraging report that Pending Home Sales, the National Association of Realtors (NAR) index of contracts signed on existing homes, edged ahead 0.2% in November. The chief economist of a major financial services firm said this suggests that "December existing sales will also rise...to their highest annual sales pace since 2006." Indeed, even though the monthly gain was modest, the index notched its highest read since June, and is 0.8% ahead of last year.
The NAR chief economist concurred: "The housing market is closing the year on a stronger note...backed by solid job creation and an economy that has kicked into a higher gear." The NAR predicts existing home sales will end the year at 5.54 million, up 1.7% from 2016's 5.45 million sales. But they see 2018 sales at 5.52 million, with price growth moderating to around 2%. However, the senior economist of a national listing site expects continued demand: "An economy that keeps adding jobs, and wages that continue to grow, both have consumers feeling confident."
BUSINESS TIP OF THE WEEK... Some keys to success--always follow up; put clients' interests first; listen closely; communicate clearly; hone negotiating skills; stay in contact with clients and your business sphere.
>> Review of Last Week
HAPPY OLD YEAR!... Four days of trading on Wall Street ended with the three major market indexes down for the week, largely from a late-Friday sell-off at very light volumes, as many investors took off for the holidays. This ended a year that was anything but down. In 2017, the Dow went up 25.1% after setting 71 closing records the past twelve months, a record in itself. The S&P 500 went up 19.4% during the year, while the Nasdaq gained 28.2%. This was its sixth straight yearly increase, its longest streak since the one from 1975 to 1980.
We follow where stock prices go because over the years market performance has proven to be a leading indicator of where the U.S. economy is headed. And as the economy goes, especially jobs and incomes, so goes the housing market. We also have economic data to consider. Last week saw Consumer Confidence hit a 17-year high, and the Chicago PMI measure of Midwest manufacturing reach 67.6, the best read in more than six years. Its New Orders Index was the highest in three and a half years and its Production Index the highest since 1983!
The week ended with the Dow down 0.1%, to 24719; the S&P 500 down 0.4%, to 2674; and the Nasdaq down 0.8%, to 6903.
Bonds, led by Treasuries, ended the year broadly higher. The 30YR FNMA 4.0% bond we watch finished the week UP .31, at $104.59. National average 30-year fixed mortgage rates edged higher in Freddie Mac's Primary Mortgage Market Survey for the week ending December 28. But their deputy chief economist noted, "rates are still below the levels we saw at the end of last year and early part of 2017. Mortgage rates have remained relatively low all year." Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?... The NAR reports that sellers' use of real estate agents hit an all time high in 2017. For-sale-by-owner (FSBO) transactions were only 8% of sales, their lowest share since the NAR began tracking this in 1981.