Morning Report: Home equity rises 3/9/17

Posted on March 9, 2017 by Brent Nyitray

Vital Statistics:

Last Change
S&P Futures 2363.0 -1.0
Eurostoxx Index 372.1 -0.5
Oil (WTI) 49.6 -0.7
US dollar index 92.0  
10 Year Govt Bond Yield 2.58%
Current Coupon Fannie Mae TBA 101.438
Current Coupon Ginnie Mae TBA 102.784
30 Year Fixed Rate Mortgage 4.19

Stocks are lower this morning as oil continues to fall. Bonds and MBS are down small.

Initial Jobless Claims ticked up to 243k last week. The 4 week moving average is 237k. Consumer Comfort improved.

There were 37,000 announced job cuts in February, according to outplacement firm Challenger, Gray and Christmas. This is a decline of 19% from January and a decrease of 40% from February last year. The job cuts are dominated by the retail sector as department stores had a lousy holiday season. In fact, the job cuts in retail are almost 6x the next biggest sector (energy). Of course some of this is seasonal, but there continue to be problems with the shopping mall sector or retail. The financial sector also reported about 3,300 job cuts as higher interest rates hurt some in the mortgage space and automation / falling fees reduce headcount in banking and asset management. On the other side of the coin, companies announced they were hiring over 162k – and 100k of them were by Amazon.com. It seems strange to think that for every job lost in bricks and mortar retail, 3 were created for online shopping, but there you go.

Import prices rose 0.2% in February and are up 4.6% YOY, however when you strip out petroleum, they fell 0.1% and are up 0.5% YOY. While the Fed is concerned about potential inflation, we have yet to see any hard evidence of it yet.

Rising home prices helped reduce negative equity by over $2 billion in the fourth quarter, according to CoreLogic. About 3.2 million homes (or 6.2%) have negative equity. A total of 7.7 million have under 20% equity. These loans become refi candidates as home price rise. Cashout refis driven by increasing home prices will undoubtedly become a larger component of the refi universe as rates continue to rise.

Under Donald Trump’s proposed budget HUD will get about 14% less than last year. It looks like most of the cuts will fall on community devlopment block grants and public housing maintenance. It doesn’t appear (at least initially) that the mortgage side of things is affected at all.

Filed under: Economy, Morning Report |

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13 Responses

  1. jnc4p, on March 9, 2017 at 9:38 am said:

    Someone has been paying attention to Brent.

    “President Donald Trump revealed his plan in the event the GOP effort fails: Allow Obamcare to fail and let Democrats take the blame, sources at the gathering told CNN.”

    http://www.cnn.com/2017/03/08/politics/donald-trump-conservative-leaders/index.html

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  2. Brent Nyitray, on March 9, 2017 at 9:42 am said:

    Any sort of change to obamacare is going to take most of the year. In the meantime, the obamacare exchanges twist in the wind, and we will get to see their planned increases, plus any planned exits.

    I wonder what the health insurers are thinking here. If they like the R deal better, why not pull out of the obamacare exchanges en masse to force the issue?

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    • novahockey, on March 9, 2017 at 12:28 pm said:

      they’re trying to “fly causal” keep their distance. but don’t look like they’re keeping their distance.

      regardless of how this shakes out, who is going to have to work with an R congress they just cheezed off: the AMA

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  4. Let the mutherfuker burn!, on March 9, 2017 at 3:03 pm said:

    Left discovers Federalism (“real federalism) and a newfound hatred of the 16th Amendment.

    https://newrepublic.com/article/140948/bluexit-blue-states-exit-trump-red-america

    It’s a start.

    Bonus: there are A LOT of inadvertently revealing presumptions in the piece.

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    • ScottC, on March 9, 2017 at 3:27 pm said:

      MCWing:

      That article is hilarious. Gobsmacking lack of self-awareness.

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    • jnc4p, on March 9, 2017 at 4:19 pm said:

      “For starters, we now endorse cutting the federal income tax to the bone—maybe even doing the full Wesley Snipes and abolishing it altogether. We will raise our state and local taxes accordingly to pay for anything we might need or want. We ask nothing more from you and your federal government. Nothing for infrastructure, or housing, or the care of the poor and sick—not that you gave us much, anyway. All we want is our money, and you can keep yours, dollar for dollar.”

      Please throw us into that briar patch.

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      • ScottC, on March 9, 2017 at 4:56 pm said:

        jnc:

        Please throw us into that briar patch.

        Ha. I just saw someone else use exactly that metaphor in regards to that same article on the Federalist comments.

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    • Brent Nyitray, on March 9, 2017 at 7:22 pm said:

      It will take 50 years to get that high speed rail line approved in Westchester…

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    • Brent Nyitray, on March 10, 2017 at 10:38 am said:

      Guarantee you they still want to own the legal system to bend red state America to its social will.

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