Morning Report: Existing home sales near 10 year record 11/22/16

Vital Statistics:

Last Change
S&P Futures 2197.5 5.0
Eurostoxx Index 341.5 1.3
Oil (WTI) 48.5 1.8
US dollar index 91.3 0.1
10 Year Govt Bond Yield 2.31%
Current Coupon Fannie Mae TBA 103
Current Coupon Ginnie Mae TBA 104
30 Year Fixed Rate Mortgage 3.99

Stocks are up this morning as commodities rise on anticipated economic strength. Bonds and MBS are flat.

Existing home sales rose 2% to a seasonally-adjusted run rate of 5.6 million in October, according to the NAR. September’s numbers were revised upward to 5.49 million. October’s number is 5.9% higher than a year ago, and the highest reading since February 2007. The median home price rose 6% to $232,200. Total housing inventory dipped to 2.02 million units, which represents a 4.3 month supply at current levels. NAR considers 6.5 month’s worth to be a balanced market. Days on market ticked up to 41 days from 39 the month before. The first time homebuyer accounted for 33% of all

sales, which is up a couple percentage points from a year ago. Now, if we could just get housing starts up to catch up with the increase in sales we could have a real recovery on our hands.

The post-election rise in interest rates is beginning to affect home sales. First time homebuyers are being hit particularly hard. One loan officer has great advice however: the increase in rates may appear dramatic, but the difference in monthly payment often is not. “I tell people, interest rates are 80 percent psychological and 20 percent math. I do the math for them and their next reaction is, ‘Oh that’s all?’ Forty dollars a month, $75 a month. They initially think it’s going to be a lot more painful than that,” said Anker, who added he hasn’t lost any deals yet. ” While we have yet to see any effect in the home price indices (that will probably be a few months out) be prepared for a deceleration in home price appreciation, and maybe even flat / declining prices in the hottest markets.

The Richmond Fed Manufacturing index improved last month from -4 to 4.

Speculators in the US Eurodollar market are betting $2.1 trillion that short term rates are going up as economic growth and inflation return. Note that yesterday, all of the major stock market indices hit new highs. We have been seeing the biggest asset allocation change out of bonds and into stocks over the past week.

Donald Trump took to YouTube last night to give an update on the transition. Probably the biggest news in that was essentially a moratorium on regulations – where for every new regulation, two must be removed. Not sure how that is going to work in practice. The Trans Pacific Partnership trade deal is probably dead at this point as well. Separately, he isn’t going to launch any further investigations on Hillary Clinton.

Front-runner for Treasury Secretary Steve Mnuchin was part of a Goldman consortium that bought failed bank IndyMac, renamed it OneWest and sold it to CIT. This was post-crisis, however his confirmation hearing (if he gets the nom) will undoubtedly spend some time on the mortgage industry and past practices.

Impac said that low interest rates hurt demand for non-QM products last quarter.

When the Chinese bet on real estate, they bet big.

73 Responses

  1. Fristies!


    • These people have jumped the shark…

      my son’s friends who are all early teenagers mock this sort of stuff, especially the “I identify as” stuff… They were all joking at Boy Scouts that they identify as turnips, etc… They make fun of the gamergate SJWs who want to social engineer video game culture.

      Difference of the generations…I’m sure all the hippies at the People’s Republic of Madison during the heyday of the early 70s never imagined a bunch of people like me would be walking around with Reagan / Bush ’84 buttons on their backpacks..

      Liked by 1 person

    • “do we want to reverse that progress with a theme that divides us?””


      Liked by 1 person

  2. This has to be a false flag. Surely no one would be so arrogant as to actually go public suggesting this?

    “There’s a federal database of undocumented immigrants like me. Don’t let Trump get it.

    DREAMers can’t afford to wait and see what the next administration does.
    By Julián Gustavo Gómez
    November 22 at 6:00 AM
    Julián Gustavo Gómez is campus engagement manager for Define American.”


    • Dude says he has to document his income, how does he have a job and why does he think he’s entitled to one ahead of an actual citizen?

      Liked by 1 person

    • And they questioned why some of us are opposed to a gun registry.

      Liked by 1 person

    • The Obama administration asked us to trust the government with our information and that of our family, promising it was only a temporary measure until Congress would pass comprehensive immigration reform.

      Liked by 2 people

    • Comprehensive immigration reform never came, and now we’re facing the most anti-immigrant presidency in recent history. President-elect Trump has already promised to deport at least 2 to 3 million “criminal” undocumented immigrants in his first year. Obama deported about that many in eight years — and that set a record for deportations in one presidency.

      Call me crazy, but since Trump isn’t actually president yet and hasn’t actually deported anyone yet, doesn’t that make Obama’s “the most anti-immigrant presidency in recent history”?


    • Now it’s time for Obama to own up to the fact that his administration failed on his own promise of finally pushing Congress to reform the immigration system, and he owes us a great debt.

      One of the perils of being ignorant of the Constitutional is that you can fall prey to hucksters and charlatans who promise to do things that actually fall outside of the realm of things they are constitutionally empowered to do. Perhaps if Mr. Gomez went through the process of actually becoming an American citizen, he would have studied the constitution and he would have known better.

      Liked by 1 person

    • I love the fact that he still has his Argentinian passport.

      No, he’s not an undocumented immigrant. He’s got plenty of documentation.

      He’s a foreign national.


      • He’s a foreign national.

        that’s what i’ve been saying. and i suggest that every R politician learn that phrase. immigrants do through a process. these are tourists who overstayed their welcome. and we’re flicking the porch lights on an off.

        Liked by 1 person

        • Curious how he got his Argentinian passport if he’s been here since he was 3. Wouldn’t he have had to return to Argentina?


        • McWing:

          Curious how he got his Argentinian passport if he’s been here since he was 3. Wouldn’t he have had to return to Argentina?

          Not sure how it works in Argentina, but all of my kids were born overseas, and each got a US passport in the US embassy/consulate in the place where we were residing at the time, before ever having made a trip to the US.

          Liked by 1 person

        • Ah. Armed with that information ok going full birther on your kids should they ever run for POTUS.


        • McWing;

          Armed with that information ok going full birther on your kids should they ever run for POTUS.

          The middle one’s on our side!

          BTW, far more disqualifying than their place of birth will be their father’s history of internet comments.

          Liked by 3 people

  3. Donald Trump is considering Ben Carson for HUD. What’s next? Sam Zell for Surgeon General?


  4. So now that Trump has disavowed the alt-right is the left still hitting their fainting couches?


    • The scientists, among them J. Alex Halderman, the director of the University of Michigan Center for Computer Security and Society, told the Clinton campaign they believe there is a questionable trend of Clinton performing worse in counties that relied on electronic voting machines compared to paper ballots and optical scanners, according to the source.

      I love how they automatically assume that the alleged discrepancy indicates HRC got cheated rather than did the cheating. It never occurs to them that perhaps Hillary did better in counties that didn’t use electronic ballots because it was harder for her team to hack into electronic ballots than to stuff ballot boxes with fake paper ballots.

      Liked by 1 person

  5. Happy Thanksgiving everyone. Go Steelers!

    Liked by 1 person

  6. Never gets old:

    Liked by 2 people

  7. Just stopping by to wish you all a very happy and safe Thanksgiving! I have much to be thankful for this year so I’m in a very reflective and appreciative mood. One thing I am thankful for is that you’re all still here doing your thing and I can drop by anytime and catch up with y’all!

    We had a big extended family Thanksgiving last Saturday as our CO daughter and new husband were here to run a 5K Turkey Trot with me. Today it’s just our oldest daughter, her husband and his mother and a family friend. Looking forward to a quiet day!

    Have a great one and don’t eat too much pie!

    Liked by 1 person

  8. Looks like Ben Carson will end HUD’s jihad against Westchester County:


  9. Trump’s going to run rings around them:

    “How is Trump spending Thanksgiving? He says he’s trying to save an Indiana factory.
    By Jonathan O’Connell
    November 24 at 12:52 PM

    President-elect Donald Trump tweeted Thanksgiving morning that he was trying to make good on a campaign promise that a Carrier air-conditioning factory in Indiana, and its 1,400 jobs, would not move to Mexico in 2019 as planned.

    “I am working hard, even on Thanksgiving, trying to get Carrier A.C. Company to stay in the U.S. (Indiana). MAKING PROGRESS — Will know soon!” Trump tweeted.

    Carrier, a division of United Technologies of Farmington, Conn., responded with a tweet about an hour later: “Carrier has had discussions with the incoming administration and we look forward to working together. Nothing to announce at this time.”

    Liked by 1 person

    • Well, he took credit for Ford. If I was, say, a large manufacture, I might start making loud noises about onerous regulations and more business friendly environments overseas.

      Liked by 1 person

    • Lots of pissy liberals commenting about that… I made a few jokes about how it never occurred to the 5-dimensional chess player…

      Liked by 1 person

    • A/C units! Those contribute to climate change!

      /insufferable relative

      Happy thanksgiving all

      Liked by 1 person

    • My father was a VP at Carrier back in the day. He worked here for Bryant, Day & Night & Payne and then was transferred to Indiana and Carrier in the early 70’s and worked there until he retired in the late 80’s. It was a great company!

      Liked by 1 person

      • lms:

        My father worked for Carrier too, in Syracuse, way back in the late ’60s early ’70s. He worked in what was at the time a presumably very primative IT department. We always give him a hard time because he eventually got into sales and subsequently quit Carrier, and was basically a travelling salesman for various companies for the rest of his life. We tease him that he was on the ground floor of the technology boom, and decided it was a passing fad so he got out.

        Liked by 1 person

        • Just saw this……so interesting. My dad accused me of missing the IT boom too, but then he was ahead of his time!


  10. The grief over at the PL over the death of Fidel must be amazing.

    Liked by 1 person

    • I’m sure Obama is pleased to have been able to meet the great man before he kicked the bucket.

      Liked by 1 person

      • The blogosphere of the right is all aflutter over Obama’s anodyne and deliberately opaque comments on the death of Castro.

        At this time of Fidel Castro’s passing, we extend a hand of friendship to the Cuban people. We know that this moment fills Cubans – in Cuba and in the United States – with powerful emotions, recalling the countless ways in which Fidel Castro altered the course of individual lives, families, and of the Cuban nation. History will record and judge the enormous impact of this singular figure on the people and world around him.

        While my initial reaction was to condemn Obama for this obvious whitewash of Castro’s history, I decided to look for how previous presidents have officially responded to the deaths of similar, high profile tyrants. I couldn’t find any official comments from Eisenhower on the death of Stalin, nor could I find anything from Johnson upon the death of Ho Chi Minh. But I did find official comments from Ford on the death of Mao. They sound remarkably similar to Obama’s on Castro.

        Chairman Mao was a giant figure in modern Chinese history. He was a leader whose actions profoundly affected the development of his own country. His influence on history will extend far beyond the borders of China.

        Americans will remember that it was under Chairman Mao that China moved together with the United States to end a generation of hostility and to launch a new and more positive era in relations between our two countries.

        I am confident that the trend of improved relations between the People’s Republic of China and the United States, which Chairman Mao helped to create, will continue to contribute to world peace and stability.
        On behalf of the United States Government and the American people, I offer condolences to the Government and to the people of the People’s Republic of China.

        Personally I would prefer that, if they aren’t going to say anything about the fundamentally evil nature of the regimes these people ran, they shouldn’t say anything at all. But perhaps these vague, non-judgmental statements are just the routine stuff of diplomacy. And we can at least take solace in the fact that our president isn’t Justin Trudeau of Canada:

        “It is with deep sorrow that I learned today of the death of Cuba’s longest serving President.

        “Fidel Castro was a larger than life leader who served his people for almost half a century. A legendary revolutionary and orator, Mr. Castro made significant improvements to the education and healthcare of his island nation.

        “While a controversial figure, both Mr. Castro’s supporters and detractors recognized his tremendous dedication and love for the Cuban people who had a deep and lasting affection for “el Comandante”.

        “I know my father was very proud to call him a friend and I had the opportunity to meet Fidel when my father passed away. It was also a real honour to meet his three sons and his brother President Raúl Castro during my recent visit to Cuba.

        “On behalf of all Canadians, Sophie and I offer our deepest condolences to the family, friends and many, many supporters of Mr. Castro. We join the people of Cuba today in mourning the loss of this remarkable leader.”


        • The anodyne is an attempt to reach out to the Cuban people, at a time when change might be in the air.

          The Canadian response is fawning and makes me want to retch. The guy was a mass murderer.

          Scott, I predicted Fidel’s turn in my HS senior thesis in 1960 – “Communism in Latin America”.


        • mark:

          The anodyne is an attempt to reach out to the Cuban people, at a time when change might be in the air.

          Perhaps, but frankly if I were one of the many Cubans suffering under Castro’s boot heel, it wouldn’t seem like much of an attempt to reach out to me.

          Scott, I predicted Fidel’s turn in my HS senior thesis in 1960 – “Communism in Latin America”.

          Was that a difficult thing to predict? I know that Castro himself denied being a communist, but I thought it was still widely recognized where his political ideology lay. Is that not right?


        • It was predicted by the sources for my paper. But not by the mass media.

          You know that he tried out with the Yankees, don’t you?


        • That’s a myth apparently.


        • Absolute myth.


        • Mark:

          You know that he tried out with the Yankees, don’t you?

          I do. If only he was a little bit better….


        • @markinaustin:

          “The Canadian response is fawning and makes me want to retch. The guy was a mass murderer.”

          Forgiveness of mass murder on the part of Communist dictators has always been the process for the dedicated left and even many of the more mainstream liberals.

          What I don’t get is the forgiveness of his very active persecution of the LBGTQ community. Like camps, prison, torture and execution kind of persecution. Forgiving that for self-reported elevated literacy rates and crappy universal healthcare should be a much bigger ask.


        • “But perhaps these vague, non-judgmental statements are just the routine stuff of diplomacy.”

          Yep, it’s this. And of course Trump had to tweet over it.

          Going forward, I don’t think you’ll have to worry about the problems of overly anodyne diplomatic comments coming from the Trump administration.


        • jnc:

          Going forward, I don’t think you’ll have to worry about the problems of overly anodyne diplomatic comments coming from the Trump administration.

          It’s gong to be entertaining, that’s for sure.


  11. Trump’s pretty clever in this exchange, it’s been promoted 180 degrees from what I think actually happened.

    Freidman sounds utterly hysterical in it, like some emotional broad. Jeez dude, get a fucking grip.

    Liked by 1 person

  12. Scott Adams:

    The areas in which Trump hasn’t budged in his opinion seem to be where states’ rights are involved. Trump would leave it to the courts and to the states to decide on abortion, legal marijuana, and gay marriage. You might not like the fact that Trump wants the federal government to stay out of those decisions, but it isn’t very dictator-like to leave big decisions to the states.

    As Trump continues to demonstrate that he was never the incompetent monster his critics believed him to be, the critics will face an identity crisis. They either have to accept that they understand almost nothing about how the world works – because they got everything wrong about Trump – or they need to double-down on their current hallucination. Most of his critics will double-down. That’s how normal brains work.

    And that brings us to our current situation. As Trump continues to defy all predictions from his critics, the critics need to maintain their self-images as the smart ones who saw this new Hitler coming. And that means you will see hallucinations like you have never seen. It will be epic.

    The reason this will be so fun to watch is that we rarely get to see a situation in which the facts so vigorously violate a hallucination. Before Trump won the presidency everyone was free to imagine the future they expected. But as Trump continues to do one reasonable thing after another, his critics have a tough choice. They can either…

    1. Reinterpret their self-images from wise to clueless.


    2. Generate an even stronger hallucination. (Cognitive dissonance.)

    While Adams was clearly wrong about Trump winning in a landslide (and I think primarily for the reason I anticipated he would be wrong about a Trump victory: the persuasion skills he talked about just don’t work when you’re asking people to abandon an ideological self-image that they believes makes them more moral and superior than others) . . . I agree with this prediction completely. For the same reason. Facts and reality also aren’t persuasive when it comes to making people abandon positions very important to their self-image.

    And I think he’s right that it will be beyond anything we’ve previously seen. In my opinion, critics of Obama often filtered out where he was doing a decent job, or legitimately attempting to reach across the aisle, or maintaining a Bush-lite foreign policy, so as to create an image of him, for themselves and fellow travelers, that made him the worst president ever in the history of everything.

    Bush experienced the same thing. The reportage on Bush and stem cell research, just to cite one example, was 180° from what was actually happening. To this day, folks on the left (uniformly, in my experience) savage his SS reform plan (the best thing he had to offer, IMHO) with a completely fictional take on it. The “Mission Accomplished” banner has become the stuff of legend, of course, as an example of presidential hubris, but the backstory is very different. And I could go on. Everywhere Bush defied expectations, his critics either didn’t see it or spun it into him somehow conforming to their expectations.

    I expect Trump will defy expectations to a degree previously unknown to both the MSM and the opinion-press, both left and right in some cases. The cognitive dissonance will be truly epic, and I’m expect a lot of members of the press and sometimes entire press organs to self-combust in their efforts to force what Trump is actually doing and saying to conform to their narrative.


  13. Someday R’s will wake up to the racism cudgel and stop giving a shit.


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