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IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Steigerwald, Gordon & Koch, Inc.), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Steigerwald, Gordon & Koch, Inc. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Steigerwald, Gordon & Koch, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Steigerwald, Gordon & Koch, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request. Please Note: Steigerwald, Gordon & Koch, Inc. does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Steigerwald, Gordon & Koch, Inc.’s web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Markets Chug Along


After the busy economic and monetary agenda of last week, the beginning of astronomical spring had fewer headlines.  We are already three weeks into meteorological spring and the markets have that same sort of feel.  Just like we were getting accustomed to warmer temps and longer daylight, investors had already priced in a Fed hike before last week’s action and are ready to just get on with it.  The notable economic results of the week were centered around housing which is a key driver of overall activity and growth.   

Existing home sales data fell 3.7% in February according to the National Association of Realtors.  Demand is being restrained by a limited inventory of homes for sale.  That has resulted in a 7.7% jump in the median sales price from a year earlier.  That is putting affordability out of reach for some buyers but, for those who can afford to buy, homes are staying on the market for only 45 days compared to 59 days on average in February of 2016.  The sales pace, which measures transactions compared to inventory, was 3.8 months last month versus 4.3 months in February of last year.  Thus, even though the headline number dipped, demand for previously owned homes remains quite strong. 

New home sales are a more timely indicator of housing demand because figures are tallied when the sales contract is signed versus existing home sales which are tabulated only after closing which could be one or two months after buyers and sellers agree on a price.  According to the Commerce Department, new homes rose in February 6.1% to a 592,000 annualized pace, a seven-month high.  New single-family home purchases in 2016 were the strongest in nine years and so far 2017 is shaping up to be solid.  The Midwest saw a 30.9% jump in sales which was the highest region, but purchases also rose in the West and South.  The supply of homes fell to 5.4 months from 5.6 months in January.  A 4.9% drop in the median sales price is helping move inventory even in the face of higher rates.  According to mortgage giant Freddie Mac, the average rate on a 30-year, fixed mortgage rose to 4.3% in the week ended March 16, up from 3.5% in early November.  Growth in the job market and strengthening balance sheets is so far overwhelming the rate boost.  Whether this trend will continue is uncertain.  With the Fed now on a rate hike trajectory, slowly but surely mortgage rates will reflect this upward movement.  Housing transactions are sensitive to rate changes but not as much as refinancings which have slowed significantly.  Assuming a perspective buyer has the funds for a down payment, rates may either accelerate or delay a final decision but usually not eliminate the transaction altogether.
 
 


INDEX
  • Markets Chug Along
  • No Surprise: Fed Raises Rates
  • Jobs Galore
  • Fed Governors Send Strong Signal March Rate Hike Likely
  • Fed's Next Move in Focus
  • Steigerwald, Gordon & Koch Weekly Blog 2/17/2017
  • Earnings Season Continues
  • SGK Weekly Blog 2/3/2017
  • Earnings Season in Full Swing as Dow Hits 20000
  • Earnings Get Off to a Solid Start as the Economy Continues to Chug Along
  • Earnings Season Begins
  • SGK Weekly Blog 1/6/2017
  • Markets Book Eighth Consecutive Year of Gains
  • SGK Weekly Blog Dec. 23, 2016 - Happy Holidays!!
  • Fed Raises Rates and Markets Shoot Higher
  • SGK Blog--Update November 23, 2016: Happy Thanksgiving from All of Us at SGK Wealth Advisors!!