Morning Report: Washington eyes contract for deed transactions

Vital Statistics:

Last Change
S&P Futures 2393.0 4.3
Eurostoxx Index 395.1 -0.5
Oil (WTI) 49.5 1.7
US dollar index 89.8 -0.3
10 Year Govt Bond Yield 2.33%
Current Coupon Fannie Mae TBA 102.625
Current Coupon Ginnie Mae TBA 103.938
30 Year Fixed Rate Mortgage 4.09

Stocks are up this morning with oil. Bonds and MBS are down.

Russia and Saudi Arabia made a joint statement saying they intend to keep production down through Q118. This is providing a boost. Separately, China said it intends to import more oil and natural gas from the US.

The Empire State Manufacturing Survey contracted in May after a torrid start to the year. Expectations remain strong however.

Several politicians are urging the FHFA to no longer sell foreclosed homes to firms that intend to follow “rent to own” or contract for deed transactions. The objection to these transactions is that the properties are sold as-is and the onus is on the renter to fix any issues like lead paint. This allows the landlord / lender to skirt property maintenance laws. Ultimately, this could be good for the market in that it brings some much-needed supply to the starter home space (and perhaps demand for 203k loans).

Speaking of first time homebuyers, here are the best cities for them. Needless to say, the big coastal cities are generally not the best places as home prices are elevated there. There is more in the Midwest and the South. There is an interactive map that gives good info on the state of individual markets. Wonder how much size 300k gets you? Depends on the state – on one extreme is Indiana, which gets you almost 3500 square feet. The worst? DC, which gets you 600. Note that 300k is just a hair over the median price in the US.

Homebuilder sentiment rose in April, according to the NAHB. The sentiment index rose to 70, higher than expectations. Note we will get housing starts tomorrow.

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