Chicago's Mortgage Choice - April 25, 2017 Real Estate Report - They Are Back

Congress is back in session. Not that we are 100% sure that anyone missed them, but certainly there is some unfinished business on the table. For the past few weeks, international news has dominated the markets. Syria, Afghanistan, North Korea and Russia have led this domination, and certainly these world conflicts have influenced the markets -- including stocks, bonds, energy prices and the price of gold. This is not to say that domestic issues have fallen off the map, but when Congress is not in town, there will not be news of legislative progress or failures in the headlines. Now that Congress is back, there will be issues that need to be addressed on the domestic side, in addition to Congressional activity on international issues. One domestic issue hits this very week. This Friday, the stopgap funding bill for the operation of the Federal Government expires. Could we see a government shutdown? Most political analysts predict that a shutdown will not take place. However, it is normal for the agreement to come at the last possible hour. And international issues may complicate the agreement with budget requests in place to increase defense spending with a lack of immediate corresponding cuts in domestic programs. While these issues are usually resolved before the government is shut down for anything but a minimal length of time, there is the potential for fireworks and saber-rattling. And if the government does shut down for a few days, could next week's meeting of the Federal Reserve Board's Open Market Committee be delayed? Always an interesting time in Washington. Keith Stewart 773-529-7000

Chicago's Mortgage Choice - April 18, 2017 Real Estate Report - A Stark Reminder

Actually, we have had a few stark reminders recently. The most recent was the escalation of our engagement in Syria and another, a show of force near the Korean peninsula. Since the election, much of America's attention has been focused upon domestic issues such as the health care bill, a nomination to the Supreme Court, budgets and more. But now we are reminded that the world is connected. Connected not only in our fight against terrorism, but also the economics. From Brexit, to a devastating tsunami on the other side of the world, we have been constantly reminded as to how events in one part of the world can affect our part of the world -- both good and bad. Some of these reminders reside on our domestic side as well. Not long after the first attempt at "re-reforming health care reform," we now face a late April showdown which could result in a shutdown of the Federal government. While we are not predicting that this necessarily will happen, it is a reminder of the way Washington works -- contentiously and slowly. This is especially true when major changes are proposed. How does this affect us? We have talked about the surge of confidence that America has experienced in the past several months. It would be natural for this confidence to wane somewhat, as the processes move forward slowly. While this may slow down economic growth a tad, it also gives us the benefit of slowing down the rise in interest rates that market analysts have been predicting. Lower rates would help boost the economy and hopefully offset the cooling off of enthusiasm. While we can't predict the path of rates or the economy, it does not hurt to gain some perspective as to the possibilities, especially when we get hit with news of world and domestic events. Keith Stewart 773-529-7000

Chicago's Mortgage Choice - April 11, 2017 Real Estate Report - Interesting Jobs Data

Every month the jobs numbers are of major interest to analysts who are looking for direction with regard to the economy. In essence, there is no up-to-date economic statistic which is more important, as job growth is the spark which can spur on economic growth, as well as inflationary concerns. In addition, there are certain employment reports that seem to attract even more interest because of other events occurring before, or as the data are being released. March's jobs numbers were no exception in this regard. This month, the numbers took on more importance because of these additional circumstances. For one, the report followed a pretty strong jobs report released last month. Two strong months of jobs growth could have provided a signal to the Federal Reserve Board, whose members will be considering when to raise rates again. To make the timing more interesting, the minutes from the last Fed meeting were released two days before the jobs report. These minutes give us a feel as to how the Fed is likely to react to the numbers, not only with regard to increasing rates, but also regarding paring off their portfolio of bonds and mortgages. The report was also released after the stock market rally hit a pause in the second half of March, which enabled long-term interest rates to ease back down. A strong report had the potential to refuel the stock market rise and higher rates quite quickly. Thus, when the numbers were released on Friday, the increase of less than 100,000 jobs and the downward revision in the previous months' gains, as well as stable wage growth, all seemed to have signaled that the economy is not running too hot -- despite the drop in the unemployment rate. Weather factors may have affected the extreme variations from month-to-month and, thus, one should not be coming to any conclusions regarding one month of weak employment growth. Additionally, it will be hard to measure the immediate reaction to the news with the escalation of the Syrian conflict going on at the same time as the report was issued. Keith Stewart 773-529-7000