Morning Report: Mark Calabria will run FHFA

Posted on December 13, 2018 by Brent Nyitray

Vital Statistics:

 

Last Change
S&P futures 2648.75 -3.5
Eurostoxx index 348.48 -1.12
Oil (WTI) 50.5 -0.64
10 year government bond yield 2.90%
30 year fixed rate mortgage 4.72%

 

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

 

The consumer price index was flat month-over-month in November, and was up 2.2% on a YOY basis. Ex-food and energy, it was up 0.2% MOM and 2.2% YOY. Inflation remains under control, which gives the Fed an excuse to stand pat next week. The Fed Funds futures are handicapping an 80% chance of another 25 basis point hike.

 

Mortgage applications increased 1.6% last week as both purchases and refis rose. “Mortgage rates fell across the board last week, driven by a similar slide in Treasuries. Trade fears dominated investors’ concerns, and this was amplified by data released by the U.S. Commerce Department showing a widening trade deficit,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The 30-year fixed mortgage rate decreased 12 basis points over the week back below 5 percent, representing the largest single week drop since 2017.” Refis are still flat on their back.

 

MBA refi index

 

While the real estate market is cooling overall, the hottest markets like Seattle and Denver are seeing big drops in activity. Denver sales are down 24% and inventory is up 50%. In Seattle, sales are down 20% while inventory is up 135%. I wonder how much of this is Chinese money getting cold feet about the US (and their own) real estate markets.

 

Donald Trump has officially nominated Mark Calabria to run FHFA when Mel Watt’s term expires in January. The NAHB and the MBA support the nomination, while affordable housing advocates are unhappy. In the past, he has been critical of low downpayment loans, which raises the question of what will happen with Fannie and Freddie’s low downpayment / low FICO programs. He has also been skeptical of the GSE’s affordable housing mandates. He is also on record being critical of securitization itself, regarding it as too pro-cyclical, which means there is too much credit in good times, and when the housing market turns down, it disappears. Finally, he has called for ending the 30 year fixed rate mortgage, which is almost an American birthright and would be impossible to get without the government subsidies.

Filed under: Economy, Morning Report |

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14 Responses

  1. jnc4p, on December 13, 2018 at 8:59 am said:

    What’s your opinion of Calabria?

    Like

    Reply
    • Brent Nyitray, on December 13, 2018 at 9:00 am said:

      ‘N’ every gimmick hungry yob digging gold from rock ‘n’ roll
      Grabs the mike to tell us he’ll die before he’s sold
      But I believe in this and it’s been tested by research
      He who fucks nuns will later join the church

      Liked by 1 person

      Reply
    • Brent Nyitray, on December 13, 2018 at 1:07 pm said:

      tho there has been a lot of scaremongering in the liberal media that the 30 year fixed rate mortgage will go away….

      Liked by 1 person

      Reply
    • markinaustin, on December 13, 2018 at 1:34 pm said:

      My in-laws were born there. Some pretty beaches and hills. Good food.I can gain Italian green card status if Rosanne and I go to Calabria and get married by a magistrate.

      Like

      Reply
  2. jnc4p, on December 13, 2018 at 12:24 pm said:

    Sigh. Headline:

    “Trump Moves to Deport Vietnam War Refugees

    The White House again wants to expel certain groups of protected immigrants, a reversal after backing away from the policy months ago.”

    vs reality

    “In essence, the administration has now decided that Vietnamese immigrants who arrived in the country before the establishment of diplomatic ties between the United States and Vietnam are subject to standard immigration law—meaning they are all eligible for deportation.
    …
    Katie Waldman, a spokeswoman for DHS said: “We have 5,000 convicted criminal aliens from Vietnam with final orders of removal—these are non-citizens who during previous administrations were arrested, convicted, and ultimately ordered removed by a federal immigration judge. It’s a priority of this administration to remove criminal aliens to their home country.””

    https://www.theatlantic.com/international/archive/2018/12/donald-trump-deport-vietnam-war-refugees/577993/

    Liked by 1 person

    Reply
  3. markinaustin, on December 14, 2018 at 4:25 pm said:

    RIP, Weekly Standard.

    I don’t know if the online version is dissolving as well, so I am keeping our link to it.

    Like

    Reply

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