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Market Snapshot 6/10/24 – Friday’s Jobs Report

Good Monday morning from your Hometown Lender,

Markets are still tending to their wounds from last Friday’s jobs report.

Things are stable right now and likely will be until Wednesday when the Fed policy statement is released and Fed Chairman Powell answers questions on what happens next. I do think Mr. Powell will be more dovish than hawkish and will likely reflect on the improved inflation readings and that the jobs report was mixed. Markets should hear that positively. I do not expect him to signal a cut in July is coming but September could still be in the cards.

The cost of owning a home in the US has increased 26% since 2020, as expenses including taxes, insurance, and utilities soared during a period of high inflation across the economy. The average annual outlay for owning and maintaining a typical single-family home — not including mortgage payments — totaled $18,118 in March, the personal finance website Bankrate found.

Here is an excerpt from the most recent Fannie Mae Homeownership report (most people think prices go up from here, even if it is at a slower pace):

Homeowners’ perception of home-selling conditions declined only slightly and remains largely positive after a steady increase over the last few months. This suggests to us that, despite the so-called ‘lock-in effect,’ some homeowners may increasingly want or need to sell their homes for a myriad of non-financial reasons, which may lead to an increase in listings in the near future. As our latest forecast notes, we expect improvements to housing inventory will lead to slightly increased sales activity through the end of the year.”

Home Purchase Sentiment Index — Component Highlights

Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased 2.5 points in May to 69.4. Further, the HPSI is up 3.8 points compared to the same time last year.

  • Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home decreased from 20% to 14%, while the percentage who say it is a bad time to buy increased from 79% to 86%. As a result, the net share of those who say it is a good time to buy decreased 13 percentage points month-over-month.
  • Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home decreased from 67% to 64%, while the percentage who say it’s a bad time to sell increased from 32% to 35%. As a result, the net share of those who say it is a good time to sell decreased 6 percentage points month-over-month.
  • Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months remained unchanged at 42%, while the percentage who say home prices will go down remained unchanged at 18%. The share who think home prices will stay the same increased from 39% to 40%. As a result, the net share of those who say home prices will go up in the next 12 months increased 2 percentage points month-over-month.
  • Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 26% to 25%, while the percentage who expect mortgage rates to go up decreased from 33% to 31%. The share who think mortgage rates will stay the same increased from 40% to 42%. As a result, the net share of those who say mortgage rates will go down over the next 12 months remained unchanged month over month.
  • Job Loss Concern: The percentage of respondents who say they are not concerned about losing their job in the next 12 months decreased from 76% to 75%, while the percentage who say they are concerned increased from 23% to 24%. As a result, the net share of those who say they are not concerned about losing their job decreased 1 percentage point month-over-month.
  • Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago increased from 17% to 20%, while the percentage who say their household income is significantly lower remained unchanged at 12%. The percentage who say their household income is about the same decreased from 70% to 67%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago increased 3 percentage points month-over-month.

Stay safe and make today great!