For the week of APRIL 12, 2021

“Life’s not about expecting, hoping and wishing, it’s about doing, being and becoming.”—Mike Dooley, American author, speaker, and entrepreneur

Fannie Mae’s March Home Purchase Sentiment Index scored its biggest gain since June. Respondents who say it’s a good time to buy went from 48% to 53%, while those who feel it’s a good time to sell grew from 55% to 61%. 

Realtor.com reports sellers are already showing up. For the week ending March 27, new listings came in 6.3% ahead of a year ago. This is a welcome gain, though total inventory keeps declining under the strong buyer demand.

Freddie Mac’s chief economist believes the drop in rates “will continue to bolster purchase demand” and “creates yet another opportunity for those who have not refinanced to take a look at the possibility.”  

LET'S KEEP THE PARTY GOING... The fun continued on Wall Street. The Dow and the S&P 500 hit new highs and extended their weekly win streaks to three in a row, while the Nasdaq notched the biggest 5-day gain of them all.

A blow-out March jobs report, released Good Friday morning when markets were closed, set things in motion, nicely helped by a record-high ISM Non-Manufacturing Index for March. Both showed the recovery gaining momentum.

The Producer Price Index (PPI) showed hotter than expected wholesale inflation. But the Fed jumped in, claiming that was "transitory," implying they would keep rates near 0% through 2023. What fun that would be! 

The week ended with the Dow UP 2.0%, to 33,801; the S&P 500 UP 2.7%, to 4,129; and the Nasdaq UP 3.1%, to 13,900.

Bonds overall ended barely higher for the week, the UMBS 3.0% UP .46, at $104.52. After inching up for seven weeks, the national average 30-year fixed mortgage rate fell back 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?... Data firm CoreLogic expects 2021 will see incomes up, rates down, the number of households growing, and lots more new builds. They’re forecasting 2021 new home sales to hit their highest level since 2006. 

HOME BUILDING, RETAIL, INFLATION MOVE UP… Analysts expect spring weather to push up March Housing Starts and Building Permits. Retail Sales are forecast to reverse course from February's dip and post a strong gain in March. Consumer Price Index (CPI) inflation, however, is also predicted to rise, but only by a bit, month-over-month.

NOTE: Weaker economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.

Forecasting Federal Reserve policy changes in coming months. A few more Fed watchers think rates may rise the second half of the year, but the vast majority still feel rates will stay low for a very long time, as the central bankers keep saying. Note: In the lower chart a 3.3% probability of change is a 96.7% certainty the rate will stay the same.

Current Fed Funds Rate: 0%-0.25%

Probability of change from current policy:

Prospects know there's always a risk their decision may not work out. Remember, the higher the trust level, the lower the perception of risk—so focus on building trust with prospects. Be seen as the low-risk provider, and you’ll get the sale.