Morning Report: Home prices increase at fastest pace in 4 years 3/15/18

Vital Statistics:

Last Change
S&P Futures 2758.3 4.3
Eurostoxx Index 375.2 0.2
Oil (WTI) 61.3 0.4
US dollar index 83.6 0.1
10 Year Govt Bond Yield 2.81%
Current Coupon Fannie Mae TBA 102.375
Current Coupon Ginnie Mae TBA 102.75
30 Year Fixed Rate Mortgage 4.43

Stocks are higher this morning on no real news. Bonds and MBS are flat.

Initial Jobless Claims fell to 226k last week. We are at levels not seen since the 1960s.

Import prices rose 0.4% MOM and are up 3.5% YOY. Declining oil prices actually pushed the index lower. A weaker dollar is helping bolster exports, however it also makes imports more expensive. It probably won’t make a difference to the Fed, which tends to focus on the Personal Consumption Expenditure metric when formulating monetary policy.

Manufacturing continues to exhibit strength, according to the Empire State Manufacturing Survey and the Philly Fed. We will see if Larry “King Dollar” Kudlow is able to put a floor under the US dollar, which has been weakening to the benefit of exporters. He is already telling the Fed to “let it rip” regarding the economy.

The NAHB Homebuilder Sentiment Index fell to 70 in March.

Homeowner’s equity increased 12% (or just about $900 billion) according to CoreLogic. Negative Equity fell by 21% to 2.5 million homes or about 5% of all homes with a mortgage. For LOs, this represents an opportunity: Anyone who did a FHA loan with 3.5% down a few years ago might have built up enough equity to qualify for a conforming mortgage without MI. With higher rates driving down the refi index, there aren’t many opportunities out there, so review your past production.

Home prices increased 8.8% YOY according to Redfin. This is the fastest pace in 4 years. The median home price is $285,700. Home prices are again ahead of incomes, with the median house to median income ratio back at 4.8x, which is about where it peaked during the bubble years. Low inventory is driving this, and homes are moving quickly. The average time on market fell by a week to 53 days. In Seattle, the average home goes to contract in 8 days.

The House is introducing a bill to rename the CFPB and to have it run by a 5-person board. The new name will be the Financial Product Safety Commission. The bill is bipartisan. Separately, the Senate passed a bill yesterday which eases regulatory requirements for smaller banks.

In the developing world, a lack of affordable housing is a huge problem. One company’s solution: 3D printed houses, which will cost about $4,000 to build. The company will introduce its first community of 3D printed homes next year in El Salvador.

17 Responses

  1. Interesting piece:

    “The Problem of Fake Refugees

    Inside Germany’s high-stakes detective operation to sort people fleeing death from opportunists and pretenders

    Graeme Wood
    April 2018 Issue”


  2. Ace highlighted this NR article. It is long, but worthwhile reading, especially in light of the fact that NR has hardly been a bastion of Trump backers, and is populated by not just a few never-Trumpers.

    Choose your poison: You duped people and thereby abetted a gross abuse of power; or you were yourself badly duped. That is the dilemma that the lofty-minded now face. The choice is excruciating. It requires abandoning satisfying self-images and embracing painful self-truths — while also handing a well-deserved victory to a hated political enemy. As a consequence, the Steele dossier has proved to be as consequential as it is asinine.

    Liked by 1 person

  3. What is wrong with these people?

    And there is no Deep State you wingnuts!

    Liked by 1 person

  4. If Wittes is saying this the IG report must be devastating and he’s still hoping McCabe won’t roll on Comey.

    But on McCabe’s innocence or culpability for some infraction that might justify his dismissal, we will reserve judgment—and we caution others to as well. It is simply not clear at this stage whether or not the record will support his dismissal.

    What’s also interesting is that Wittes ignores the elephant in the room, namely that McCabe said he was authorized to leak on the Clinton scandal and Comey testified that he had not authorized any leaks on the Clinton scandal.

    Why would Wittes leave that our I wonder?


  5. As a HUGE fan of pre Rollins Black Flag, I find this deeply weird.

    Liked by 1 person

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