Morning Report: New Home Sales rise

Vital Statistics:

 

Last Change
S&P futures 3212 -15.1
Oil (WTI) 41.34 -0.22
10 year government bond yield 0.59%
30 year fixed rate mortgage 3.02%

 

Stocks are lower this morning on weakness in overseas markets. Bonds and MBS are flat.

 

New Home Sales rose to a seasonally-adjusted annual rate of 776k, an increase of 14% from March and 7% from a year ago. Despite the big increase, we are still way below historical levels, which are insufficient to keep up with population growth and incremental demand.

 

new home sales

 

The index of leading economic indicators improved in June, but still exhibited weakness for the economy overall.

“The June increase in the LEI reflects improvements brought about by the incremental reopening of the economy, with labor market conditions and stock prices in particular contributing positively,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “However, broader financial conditions and the consumers’ outlook on business conditions still point to a weak economic outlook. Together with a resurgence of new COVID-19 cases across much of the nation, the LEI suggests that the US economy will remain in recession territory in the near term.”

Wells Fargo supposedly put people into forbearance who were merely interested in getting information about it. This prevents borrowers from refinancing their mortgages. Apparently, it is hard for borrowers to get out of forbearance, even if they want to. Note that Elizabeth Warren is on the shortlist for Joe Biden VP candidates, which means the financial sector will get plenty of vitriol out of DC heading into the election. Wells has already cut its dividend 80%, and may have to suspend it in order to keep the politicians and activists happy.

 

Home asking prices are up 13% from last year, according to Redfin. The ratio of sales price to asking price hit a record of 99% in early July, while the number with a price drop hit an all-time low at 34.4%. Not only that, the late summer slowdown doesn’t look like it is going to happen either: “The housing market usually slows down in July and August when people take time off for vacations,” said Washington, D.C. area Redfin agent Kris Paolini. “This year though, a lot of vacations have been cancelled, and buyers who had previously given up their search are being lured back by low mortgage rates. The market has stayed hot through the summer and it doesn’t look like we’ll see the typical slowdown in August, either.” If schools are closed this fall, the whole seasonal dynamic of moving kind of disappears.

asking prices

6 Responses

  1. Brent, I assume the real estate pros are lobbying for an extension of the bonus on unemployment comp. What do you hear?

    s/LandlordinTexas

    Like

  2. Good read, allowing for the bias of the writer:

    “What You Need To Know About The Battle of Portland
    Robert Evans
    July 20, 2020”

    https://www.bellingcat.com/news/americas/2020/07/20/what-you-need-to-know-about-the-battle-of-portland/

    The observation about the split between peaceful protesters marching during the day and trying to avoid conflict with the police vs the rioters who come out after dark matches my experience. Minus the peaceful protesters blocking the highways.

    Like

    • People speaking out, chanting, marching, being peaceful; that’s helping us achieve our goal, by showing that we can stand out and speak out and be together as a race, the human race that I spoke of.

      I find the chanting cult-like and creepy. But I may not be who they are trying to win over.

      I hope so. What I love about America, and specifically Portland, is every voice is heard here.

      Are they, though?

      I mean, we were treated like terrorists today, with the tear gas; I got hit in the face with rubber bullets.

      I don’t think we use tear gas and rubber bullets on terrorists, generally.

      But I’m against a fascist police state, which is what I’ve witnessed the last week or so.

      I’m curious as to what kind of enforcement of the law and putting down of riots and looting would be considered not-fascist by these folks?

      here are so many that have said, “Nobody loves me, it’s OK if I die.”

      That’s . . . I mean, doesn’t sound like this is about police brutality, really.

      Like

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