Morning Report: Homebuilder sentiment improves

Vital Statistics:


Last Change
S&P futures 2783.25 -3
Eurostoxx index 370.68 -0.04
Oil (WTI) 56.9 0.81
10 year government bond yield 2.67%
30 year fixed rate mortgage 4.43%


Stocks are flattish on no major news. Bonds and MBS are flat as well.


Homebuilder sentiment improved markedly in February according to the NAHB / Wells Fargo Homebuilder Sentiment Index. Expectations for future sales drove the increase. The index touched a 3 year low in late 2018, so things are still disappointing compared to 2016-2017, but well above historical numbers. Challenges remain for the building industry however. “The five-point jump on the six-month sales expectation for the HMI is due to mortgage interest rates dropping from about 5% in November to 4.4% this week,” Dietz continued. “However, affordability remains a critical issue. Rising costs stemming from excessive regulations, a dearth of buildable lots, a persistent labor shortage and tariffs on lumber and other key building materials continue to make it increasingly difficult to produce housing at affordable price points.”


The FOMC minutes didn’t really contain much in the way of new information. They see the balance sheet reduction ending sooner than anticipated, which means the Fed will no longer have a $800 billion balance sheet like it had pre-crisis – it will now probably be in the $3 – $4 trillion range. Second, there is uncertainty whether there will be more hikes in 2019. The Fed Funds futures have been predicting no further hikes this year for several months now, so perhaps this is simply the members catching up with what the markets are saying. Note Cleveland Fed President Loretta Mester thinks we may need to still hike rates this year and end tapering.


MBA mortgage applications increased 3.6% from the previous week as refis increased 6% and purchases increased 2%.  Rates actually increased by 8 basis points to 4.56%. While refi activity has been increasing from the dismal levels at the end of 2018, they are still well below historically anemic. A combination of prepayment burnout and rising rates are driving the decrease. Going forward, home price appreciation, not interest rates will be the impetus for refinance activity as cash-outs will inevitably rise to pay off credit card debt and FHA borrowers with sufficient equity will want to refinance into conventional loans with no MI.


Chart: MBA Refinance index 1998 = Present

MBA refinance index


Move over Rocket Mortgage, here comes mello smartloan, which is loanDepot’s new 100% digital mortgage loan experience. They claim this loan can reduce time to close by 75%.

40 Responses

  1. This gets better and better:

    “Johnson said police have a check that Smollett used to pay the two men.”

    Liked by 1 person

  2. Reading the Wikipedia on Smollet:

    Smollett came out as gay during a televised interview with Ellen DeGeneres in March 2015.[35][36]

    In a 2016 interview with Out magazine, Smollett clarified his sexual orientation by stating “If I had to label myself, I would label myself as a gay man.” However, he stated his belief that openness to love is more important than gender, revealing that “If I fall in love down the road with a woman, I’m going to love that woman.”[37] As a boy, Smollett had some romantic interest in girls

    Huh. I gotta admit, that doesn’t sound right. I mean, I guess he’s gay, but I’m not seeing a spouse. He said he’s in a relationship at one point, but not with who, and there’s zero evidence of the relationship as far as I can see. Eh, there seems to be some history. Just he’s not an easy guy to trust on this kind of stuff at this point. 😉

    Anyway, back to Wikipedia: “He began his career as a child actor in 1987 starring in commercials and films, including The Mighty Ducks (1992) and Rob Reiner’s North (1994).”

    He’s always lived in that fantasy world. I expect he believed it would all just “work out”.


  3. Miley Cyrus is a queer person in a hetero relationship. Okay.

    Once being something becomes chic and cool and desirable, I think the real oppression involved is minimal.


  4. The guy is an even bigger idiot than previously thought:

    “Another detail from the story is that Smollett had planned out the attack so it would all be caught on a surveillance camera — but it turns out that the camera was facing another direction during the allegedly staged incident. “You’ve got to be shitting me,” Noah said. “He wanted to be caught, but he didn’t get caught on camera because he didn’t know which way the camera was pointing? You’re an actor — that’s your only job!””

    And they’ve got the text messages.


  5. Doesn’t homie know that there’s free porn on the internet?

    You can’t give yourself an STD.


  6. Trump caves again:

    “Trump’s Syria reversal is a significant win for good sense

    By David Ignatius
    February 22 at 2:00 PM

    President Trump, in a rare reversal of a decision, has decided to keep “hundreds” of U.S. troops in northeast Syria to provide “campaign continuity” and stability there as the fight against the Islamic State winds down, senior defense officials told me Friday.”


  7. Worth noting:

    “Judge orders feds to list private groups receiving watchlist
    February 22, 2019”


  8. Over at NRO David French takes the opportunity of Zion Williamson’s injury the other night to take up the cause of compensation for college athletes.

    French writes:

    But the athletes who make this possible don’t get meaningful pay from the school (aside from a small stipend), and are affirmatively blocked from profiting from their breathtaking skill even off campus. They cannot earn market-rate wages from endorsements, shoe deals, or even autographs. They’re essentially denied all the money they could otherwise earn from their talents, for as long as they remain in school.

    French is totally wrong that the value that college sports programs generate for their universities is made possible by the athletes. It is the school brand, and the NCAA brand more broadly, that makes it possible. Take Zion Williamson off of Duke’s team and the revenue generation machine that is NCAA and Duke basketball won’t suffer much, if at all. Populate college basketball with real student-athletes rather than fake-student athletes auditioning for the NBA and Cameron Indoor stadium will still be packed every game, and March Madness will continue to produce madness and just as much TV revenue.


    • Sure, but what’s the justification for not paying the one group of people integral to the entire money making enterprise when everyone else is getting paid?


      • jnc:

        Sure, but what’s the justification for not paying the one group of people integral to the entire money making enterprise when everyone else is getting paid?

        They are getting paid, in kind. Expensive education, often one that would never be available to them without the sport; free room and board; and the one thing they want more than anything…an audition for the NFL/NBA and the riches that they promise. Its just not true that these athletes aren’t getting paid. And hey….if they didn’t think it was worth it, why would they do it?


    • McWing:

      Welcome to the party, bitchez.

      AN excellent example of how totally absurd the practice of Constitutional law has become in the era of living constitutionalism.

      A federal judge in Texas has declared that the all-male military draft is unconstitutional, ruling that “the time has passed” for a debate on whether women belong in the military.

      Right, because what is and is not constitutional is obviously a function not of the what the constitution says, but rather of a robed lawyer’s judgment about what should and should not be debated in the current “time”.

      But U.S. District Judge Gray Miller ruled late Friday that while historical restrictions on women serving in combat “may have justified past discrimination,” men and women are now equally able to fight.

      Men and women are equally able to fight? That surely must rank among the top 5 dumbest statements ever made in nearly 250 years of Constitutional law. Women aren’t even “equally able” to compete with men in physical sports, much less are they equally able to fight with men. I mean, that claim is plumbing heretofore unheard of depths of reality-denial.

      The government had argued that the court should delay its ruling until that commission makes its recommendations.

      Right, because what is and is not constitutional is a matter of some government commission’s “recommendations”. Seriously…we have entered an Alice in Wonderland world of constitutional jurisprudence. The practice of constitutional law has become a complete and utter joke.


      • Women aren’t even “equally able” to compete with men in physical sports,

        Tranny broads are.


        • McWing:

          Tranny broads are.

          I have to confess that the language of transgenderism is so incoherent, I don’t know who qualifies as a tranny broad. Is that a woman who pretends to be a man? Or is that a man who pretends to be a woman? Regardless, I would wager any amount of money that the odds favor a man over a tranny broad no matter who qualifies as that!


        • For this exercise it’s dude’s trying to be broads. In that iteration, broads are as physically capable as dudes.


        • McWing:

          For this exercise it’s dude’s trying to be broads. In that iteration, broads are as physically capable as dudes.

          I’d wager against that. Bruce/Caitlyn Jenner is an outlier (not just among men as as trans, obviously, but among men who are trans as a sportsman). A team of random men beat a team of random trans in virtually any sport, any time. I’d put money on it.


        • Here is where this is going…

          Just wait until a mid-tier pro golfer who can crush the ball 280 yards and is making 60k decides he wants to become a millionaire, so he puts on a dress and goes on to completely dominate the LPGA…

          It would be the end of women’s pro sports with women competing.

          Political correctness may dictate that people assert that male and female athletes are equal, but reality says differently… Top female athletes are roughly on par athletically with good high school boys. Female world class Olympic track athletes would not not win a single event in their respective state high school boy’s track meet. I remember some columnist referring to a some female athlete as “one of the fastest humans on the planet” – I was thinking she probably isn’t ever the fastest human in her zip code…


        • I’m going to say something radical here, I’d be much more likely to watch tranny broad sports than all real broad sports.


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