Morning Report: Home price appreciation is slowing

Vital Statistics:


Last Change
S&P futures 2910.5 -2
Eurostoxx index 389.7 -0.8
Oil (WTI) 65.66 1.29
10 year government bond yield 2.59%
30 year fixed rate mortgage 4.34%


Stocks are flattish this morning as we await earnings from some of the FAANG heavyweights. Bonds and MBS are flat as well.


Existing home sales fell 4.9% in March to a seasonally adjusted annualized level of 5.21 million. A decrease was expected since February’s numbers were stronger than expected. On a year-over-year basis, sales are down 5.4%. The median home price rose 3.8% to $254,400, and it looks like home price appreciation is slowing down here as well. Inventory remains the problem, with 1.68 million homes for sale, representing a 3.9 month supply. A balanced market would be closer to 2.6 million homes for sale. In addition, we have a glut at the luxury price points and a shortage at the entry-level price points. Days on market increased YOY to 36 from 30. First time homebuyers represented a third of all transactions. Historically that number has been closer to 40%.


Home prices rose 0.3% MOM in February and are up 4.9% YOY, according to the FHFA House Price Index. Note the difference in price appreciation versus the NAR numbers (+4.9% versus +3.8%) – this reflects the fact that the FHFA index excludes jumbos, which is where there real slowdown is being seen, especially in high tax states.  Take a look at the YOY price appreciation comparison regionally and check out the difference between this time last year in home price appreciation on the West Coast.


FHFA regional


Herman Cain has withdrawn his name from consideration to the Fed. A handful of Republican senators expressed reservations about his nomination, which was probably enough to make his actual confirmation unlikely. The top Democrat in the U.S. Senate, Chuck Schumer, said Cain’s “failure to garner adequate support should not be used as a pathway by Senate Republicans to approve Stephen Moore, who is equally unqualified, and perhaps more political.”


The Trump Administration is taking a look at downpayment assistance programs – generally government programs that help borrowers put together their 3.5% down payment for a FHA loan. As you would expect, borrowers who need help scraping together 3.5% are riskier, and indeed the default rates on these mortgages are double those of a traditional FHA mortgage (and FHA DQs are much higher than conventional DQs). HUD promulgated new guidance for downpayment assistance programs last week tightening documentation rules. Ballard Spahr summarizes the new guidance here.

21 Responses

  1. “Damning details…”

    after the damning details of special counsel Robert Mueller’s report.

    No collusion is certainly a damning detail for somebody.


    • The only thing that would make it better is if Avenatti was involved somehow.


    • McWing:

      I’m rock hard.

      That story is pretty awesome.


    • Smollet continues to amaze. What did he think these guys he duped into this stunt would do? Roll over while he sent them to jail so his pampered self could continue to live a live of unimpeded luxury?

      I can’t imagine any outcome–other than a complete cease-and-desist to the defamation and lots of money–that would end up even remotely positive for Smollet.

      I know Smollet is kind of black and also kind of homosexual, but the guys he’s trying to frame are also black and immigrants to boot . . . And Smollet’s version of events, the retention of his recently purchased sandwich in a situation where he’d been attacked and doused with bleach, the fact he shows up to the police with a noose still around him because he’s an ACTOR and considers it important set dressing for communicating the theme . . .

      His story is not remotely credible. I get that a lot of people don’t see that, but more than just right-wingers get that Smollet faked the whole thing. Because that’s what the evidence all points to, and it was obviously faked to anybody outside the bubble of Hollywood (and, at this point, even to many of them).

      What strikes me is how much the media dropped the topic–certainly compared to what it would be if it turned out two white, MAGA-hat wearing Chicagoans had done it–and aren’t interest in the context of the huge number of notable “hate crimes” that turn out to be hoaxes, and haven’t observed–not even once–that the hoax hate crimes tend to be weirdly media-friendly and often easy-to-go-viral for the benefit of the “victim” who will eagerly take their 15 minutes of fame, or even start a GoFundMe to help “fight hate” or whatever.

      Of course, hoax hate crimes are also used to coverup for actual real crimes–like personal attacks where making it a “hate crime” should throw suspicion away from the minority perpetrator, or maybe insurance fraud or some other scam. And again it would be interesting to put “hate crimes” in the context of how few of the ones that are interesting to the media or go viral are actually hate crimes, and how often single-victim hate crimes are, in fact, perpetrated by the victim in order that they may play the victim.

      There’s a whole question of what it says about our society when pampered, famous, wealthy people who are already better off than 99.9999% of the world population feel the way to true fulfillment is to make themselves the victim of a fake hate crime they set up themselves.

      That’s a very interesting topic. A great thing for a roundtable of experts to pontificate on. But, mysteriously, the news networks–always busy hemorrhaging viewers–never try it. Weird.


      • you would think that if our society was as irreedeemably racist as they allege, they would have a wealth of actual hate crimes to point to in order to establish their point.

        But in this day and age, no one is more virtuous and worshipped than a victim.

        Liked by 1 person

  2. The media finally figured out how to spin the Sri Lanka bombings as being the fault of white guys:


    • they didn’t blame it on trump? they are starting to show some restraint


      • White shooter from New Zealand works better. They can make the case that Islamic terrorism requires more gun control in the US to stop provoking the terrorists.

        Liked by 1 person

      • Someone will either (a) Blame it on Trump or (b) find a way to make Trump/Trump’s America the real bad guy in this situation.

        The press missed an excellent opportunity to report the Sri Lanka as “Some People Did Some Things in Sri Lanka”. As that is an entirely reasonable and expected way to refer to terrorist attacks that kill a lot of innocent people.


    • Also, not sure how Sri Lanka works as retaliation for Christchurch. Seems to me both are examples of sociopaths looking for any reason to murder people in cold blood and congratulate themselves on their fine principles and piety. If Christchurch hadn’t happened, I’m pretty sure this would have happened any way.


    • Kamala Harris helps make my point from yesterday that whether or not Trump has made things “worse” is a more meaningful question relative to the alternative:


      • So how many Democrats are complaining that Kamala Harris wants to govern like a King or autocratically, like a dictator? Because using executive orders in place of legislation seems pretty monarchical to me.

        That said, she’s gonna have a hard time winning anything with commitments like those.


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