Morning Report: New home sales jump in February

Vital Statistics:


Last Change
S&P futures 2786.75 -4
Eurostoxx index 376.51 0.03
Oil (WTI) 56.07 0.4
10 year government bond yield 2.70%
30 year fixed rate mortgage 4.43%


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


The economy added 183,000 jobs in February, according to the ADP Employment Survey. The Street is looking for about 180,000 additions in Friday’s employment situation report, so the ADP numbers seem to be in line.


Mortgage applications decreased 2.5% last week as purchases fell by 2.6% and refis fell 2%. The typical mortgage rate rose by 2 basis point to 4.67%.


The ISM non-manufacturing index expanded in February, which means that the services sector is picking up momentum.  The biggest issues seem to be potential trade issues, labor shortages and trucking costs.


New Home Sales rose by 621,000 in December. This is up 3.7% from the downward-revised November number, but down 1.5% from a year ago. For the full year, 622,000 homes were sold, which is slightly higher than the 613,000 sold in 2017. The median price was $318,000, while the average price was $377,000. The median sales price has been declining over the past year after peaking in November 2017 at $343,400. This demonstrates the shift from luxury to entry-level home construction to meet demand. This is a reversal of the early years of the crisis, when the luxury end of the market was the only part that was working.


Note that new home sales are about where they were during the 60s – 80s. Pretty amazing when you take into account that the US population has increased by close to 60% since 1970.


new home sales


Here is a copy of the letter that NAR, MBA, and a host of other housing advocates sent to Joseph Otting, Acting Director of the FHFA regarding GSE reform. It urges FHFA to go slow, work to maintain the 30 year fixed rate mortgage, and allow the GSE’s to act as a counter-cyclical buffer.


The Fed is catching up to the markets. Boston Fed President Eric Rosengren said it could be “several meetings” before the Fed gets enough clarity on the economy to make a move in interest rates. In many ways, he is acknowledging what the Fed Funds futures have been saying for a while now – that the Fed is going to wait and see how the 2018 hikes affect the economy before making any further moves. Since monetary policy generally acts with a 9 – 15 month lag, it means that the economy still hasn’t factored in the Sep and Dec hikes from last year.

20 Responses

  1. “The median price was $318,000, while the average price was $377,000”


    Liked by 1 person

  2. Regardless of whether or not it’s a good thing, it’s the reality. Trump and the Republicans ignored this at their peril.

    Ironically, they may well have gotten more political credit if people had higher withholding and a higher tax refund.

    “How much do Americans depend on their tax refunds? Quite a lot, it turns out.
    By Taylor Telford
    March 5 at 2:52 PM

    Tax refunds sustain American families for months after their initial boost on bank accounts, a recent study shows, which might make 2019 a tough year for some taxpayers.

    The average refund, which amounts to nearly six weeks’ take-home pay for the typical household, is crucial to a family’s financial stability, the JPMorgan Chase Institute study found. But in mid-February, the IRS said Americans could see their refunds diminish by as much as 9 percent this year because changes in the tax code have made it so less is withheld from paychecks. The change could have a ripple effect, as families depend on the tax season windfall to pay down debt, make major purchases or cover big outlays like out-of-pocket health care expenses.

    “For about 30 percent of families, this ends up being the single largest cashflow infusion of the year,” said Fiona Grieg, director of consumer research for the JP Morgan Chase Institute, who worked on the study. “This is really a moment that resets their spending levels . . . it does play a key role in creating a savings buffer that families rely on for the better part of a year.”


    • I don’t see a good argument for requiring tax payers to foot the bill for church repairs.


      • KW:

        I don’t see a good argument for requiring tax payers to foot the bill for church repairs.

        I don’t either, just as I don’t see a good argument for requiring tax payers to foot the bill for most of what the government does. But even more difficult to come up with is an argument defending the notion that such expenditures violate the first amendment. The first amendment prohibits the establishment of a state religion. It does not prohibit any tax money from ever being associated with any religious institution in any way whatsoever.


    • Today, Madison’s strict no-aid principle does not characterise America’s church-state relationship: tax exemptions for churches, textbooks for religious schools and renovations for church day-care playgrounds are just three examples of faith-based organisations drawing on the public purse.

      Sigh. A tax exemption is not an example of “drawing on the public purse”. That is one far too common deceit that I really wish would just die.

      Liked by 1 person

    • But the second matter is more vexed: does the no-aid clause in New Jersey’s constitution violate the federal constitution’s guarantee of religious free exercise?

      It’s not all that vexing. Wholly apart from the fact that the federal constitution talks about what congress cannot do, not what a New Jersey locality can do, allocating money to the renovation of a church has exactly the same effect on the freedom to exercise one’s religion as does allocating money to the renovation of a football stadium or a historical landmark…absolutely no effect at all.

      Liked by 1 person

  3. I believe that it was also a climate of right-wing (Reich-wing?) hate that caused an avowed communist to kill JFK.

    I think we can all agree that there’s no more right-wing a place than Boulder. They don’t call it Reaganville for nothing.

    Liked by 1 person

    • I’m totally sure that’s the whole story, and there isn’t any additional information that would make the police’s actions make more sense.

      Ultimately, if we want a change, we are going to have to vote in politicians willing to take power away from the police.

      Or just get rid of ICE and the police and whatever else. It will be great.

      Sorry, this isn’t his effect. It’s white supremacy since 1619. The police are evil thug overseers. They protect the evil plantation class & are protected by them. They abuse, exterminate & turn us into fodder for the racist felony slave state.

      First comment. Fascinating.

      Now we know who the real enemy is. The evil white racists & their cult have let us know. Don’t trust Rethugs especially white ones. And never trust the cops. They murder 12 yo black boys, legally in my city. We’re good for target practice.

      Fascinating. Also, hawy blue-on-blue action:

      BTW I am a 59 year old white guy in SE Iowa. Most of the people that I know do NOT approve of racism or violence.

      kb0hae March 06 · 04:16:44 PM recommend 1
      Based on the demographics in Iowa, yeah they do. They’re just oblivious to the fact that their state just happens to still be predominantly racially segregated. But make absolutely no mistake about it, it’s NOT just an accident or coincidence.
      It’s 2019. Are we even going to get real about this s**t?

      BTW, I love how everybody on the left announces their race on these threads. “I’m a good whitey!”


  4. If you’ve got that kind of money the smart play is to make the women you’re going to bang get vaginal tightening surgery.

    As The Man wisely asks and answers, how do you bring a woman to orgasm?

    Who cares!


  5. How does this serve The Resistance?


  6. Thinking about Cohen suing the Trump Org for attorneys’ fees:

    The suit is in NY State Court. It is not a winner for Cohen so I assume there are two possible motives for it. Almost any suit alleging breach of contract can survive summary judgment motions so that depositions are a real possibility. So motive one could be to force a cash settlement on the Trump Organization [TO] to avoid depositions, and motive two could be to be unconcerned about a settlement just in order to get the depositions.

    Depending on NY procedural law, the TO might take either of two different approaches. If NY follows the federal procedure closely, and the TO thinks Cohen cannot credibly prove a big number even totally unopposed, then the Organization can default and permit Cohen to take a judgment, but never have to appear for a deposition.

    That would have been Clinton’s best course in the Jones case; she had no proof of job interference whatsoever and would not have taken more than several thousand dollars for the insult on a default judgment. No attorneys fees for WJC, no embarrassing questions, no deposition.

    But if NY lets wild claims go to default judgment without prima facie evidence [do any of you know default practice in NY?], then the TO should rely on the practice that Plaintiff’s deposition goes first and rip Cohen up on his breach claim but especially on his damage claim. Get him on deposition to detail all of his legal time with actual time records and I would bet he might be in the $50,000-$100,000 range on a lodestar analysis. Offer a judgment at that point based on Cohen’s deposition and cut the case short there and I think the Defendant still never goes to depositions.

    Thinking about the TO’s potential malpractice counterclaim against Cohen is a headache, because it would probably open too many doors into the world of the TO. That counterclaim might rely, in part, on Cohen’s unethical and illegal conduct, which in turn could raise the spectre of the TO as a co-conspirator, as he was not reigned in.


Be kind, show respect, and all will be right with the world.

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