Market News 10-3-19
Mortgage Market Update
A recent string of disappointing economic data has caused stocks to plummet and bond yields to drop. When yields drop, mortgage rates generally improve. The labor market, on track to add about 1.9 million jobs this year, could be faltering. It’s the smallest jobs gain since 2010 and down 2.7 million from 2018. Markets are now pricing in an October Fed policy rate cut, the 3rd in as many months. This speculation is helping mortgage rates improve.
The housing market may be a bright spot in a worrisome economy. The forecast for home sales is good due to rising demand and a projected uptick in inventory. Single-level homes are making a comeback. One-story homes comprised 47% of new home construction in 2018, up from 45% in 2017. Fannie Mae and Freddie Mac will be allowed to keep more earnings, a total of $45 billion moving forward, as an initial step toward exiting government control.