Morning Report: Home Prices holding up

Vital Statistics:


Last Change
S&P futures 2863 30.1
Oil (WTI) 23.15 2.79
10 year government bond yield 0.66%
30 year fixed rate mortgage 3.43%


Stocks are higher this morning as earnings continue to come in. Bonds and MBS are down.


Despite the COVID-19 crisis, home price appreciation is holding up. Prices rose 1.3% MOM in March and are up 4.5% YOY. April might be a better read, but still… D.R. Horton mentioned on its earnings call that pricing is holding up, and while they are offering some incentives (free fridge friday), they aren’t cutting prices to move inventory.


Here are the cities with the biggest drop in new listings. Allentown PA, Milwaukee WI, Scranton, PA, Detroit MI, and Buffalo NY. The Northeast and Upper Midwest seem to have been hit the hardest.


If you look at the CoreLogic map, most of these areas are on the undervalued side.


CoreLogic overvalued metros


Ex-MBA President Dave Stevens weighs in on how the CARES Act drove a massive tightening of mortgage credit. Comments from Mark Calabria about letting servicers fail and musing that borrowers might be better off with a bank servicer were unhelpful to say the least. The added LLPAs on first payment forbearance requests basically killed the cash-out market. He makes a point that Fannie has the liquidity (between its own net worth and the Treasury facility) to extend lines of credit. He makes a great point as well – Fannie was created during the New Deal to smooth the mortgage market during disruptions, and this one is probably the biggest since the New Deal days.

10 Responses

  1. Great map. Thanks, Brent.

    Joe, Treasury says while the forgivable loans won’t be taxable, the O&N business deductions WON’T BE DEDUCTIBLE!

    This is awful, better to have the forgiven loans taxed for employers who become insolvent. As Joe knows, insolvency wipes the forgiveness income – but lost deductions mean the crippled employer is in hock to IRS, perhaps with some relief in bankruptcy, but not outright forgiveness of the taxes.


  2. Brent:


    • yeah, that would be a no-win conversation..

      Liked by 1 person

      • Why? Taibbi *seems* receptive to expertise. Or because you don’t want your name attached to Taibbi in any way?


        • Upside from speaking to him? Zero.
          Downside? Massive.

          Edit: Upside would be being able to pick his brain about getting into writing, who to talk to, etc. So “writer Brent” could see a benefit. But “mortgage Brent” could not.


        • I’d read the Twitter thread. He actually pushes back against the people wanting to demonize servicers this time and seemed to be doing research for a piece on the issue you identified earlier this month.

          Plus I think he’s an honest guy who would leave your name out if you didn’t give him permission to quote you.


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

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: