Morning Report: Housing inventory at record lows

Vital Statistics:

  Last Change
S&P futures 3309 9.6
Oil (WTI) 39.97 -0.46
10 year government bond yield   0.68%
30 year fixed rate mortgage   2.94%

Stocks are higher this morning on no real news. Bonds and MBS are flat.

Quicken’s crosstown rival United Wholesale is going public via one of those Special Acquisition Corporations (SPACs). The deal will value the company at $16 billion. When do we get to rebrand The Motor City as the Mortgage City?

Existing home sales rose 2.4% MOM to 6 million, according to NAR. They were up 10% YOY, and the median home price rose 11% to $310,600.

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” said Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

Total housing inventory sits at 1.49 million units, or about 3 month’s worth of inventory. Historically, 6.5 months worth was considered a balanced market. In addition to the dearth of inventory, NAR believes that remote work will be a growing feature of the US economy, even after a COVID vaccine is found. You can see below we are pretty much in record territory as far as housing supply goes.

This image has an empty alt attribute; its file name is housing-supply.jpg

Mortgage Applications rose 7% last week as purchases rose 3% and refis rose 9%. “Mortgage applications activity remained strong last week, even as the 30-year fixed-rate mortgage and 15-year fixed-rate mortgage increased to their highest levels since late August,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Purchase applications were up over 25 percent from a year ago, and the demand for higher-balance loans pushed the average purchase loan size to another record high.”

Rocket’s big announcement (which it has been hyping for weeks now) is the rebranding of its broker business from Quicken Loans Mortgage Services to Rocket Pro TPO. It will allow for e-signature technology, better visibility into loan status and allow borrowers to upload documents electronically.

“We have two pieces of technology that brokers love: One is ‘The Guru,’ and it’s kind of a Google platform for mortgage guidelines – searchable. Brokers love it,” Niemiec said in an interview. “We also have ‘The Answer,’ which is a piece of technology that brokers can interact with to ask questions and it communicates back and forth leading them to the proper answer. We actually partnered with Google over the last few months to create a new piece of technology that merges everything they love about Guru and everything they love about Answer into one tool called Pathfinder by Rocket. We’ll be rolling that out on the day of the announcement.” 

Home prices rose 1% in July and are up 6.5% YOY, according to the FHFA House Price Index.

“U.S. house prices posted a strong increase in July,” said Dr. Lynn Fisher, FHFA’s Deputy Director of the Division of Research and Statistics. “Between May and July 2020, national prices increased by over 2 percent, which represents the largest two-month price increase observed since the start of
the index in 1991. The dramatic increase in prices this summer can be attributed to the historically low interest rate environment and rebounding housing demand even as the supply of homes for sale remains constrained.”

41 Responses

  1. Good read:

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  2. I know most of you here seem to support Trump either because of his hugs to the upper 10% of the country re income or because it would be so nice to stack the court against liberals but I seriously do not understand how anyone can vote for him.

    The President has clearly been laying the groundwork for a legal challenge if the election goes against him, and he’s now confirmed that he expects the Supreme Court to play a key role. In case anybody didn’t get the message from his initial remarks on Tuesday, he repeated it. “So you’re going to need nine Justices up there,” he went on. “I think it’s going to be very important. Because what they’re doing is a hoax, with the ballots. They’re sending out tens of millions of ballots, unsolicited—not where they’re being asked but unsolicited. And that’s a hoax, and you’re going to need to have nine Justices.”

    https://www.newyorker.com/news/our-columnists/donald-trump-is-attacking-american-democracy-at-its-core?utm_source=nl&utm_brand=tny&utm_mailing=TNY_Cassidy_09232020&utm_campaign=aud-dev&utm_medium=email&bxid=5e625c4ecff06b3f6a385c07&user_id=60228433&hasha=a3fcbe9bf7fd03bfbef30ff4dbbfc853&hashb=0acfcedb23b26b12fc23697522a0d40b89366e79&hashc=42cbb700b4c94c455e205b1100f6742a77c925fa520302799fc071e73580eaa5&esrc=Cassidy_NL_page&utm_term=TNY_Cassidy

    Do any of you doubt that he will challenge the election results if it looks like he’s losing or lost?

    Curious minds want to know!

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    • After watching Gore attorneys high-five each other for getting military ballots disqualified in Florida for being late (since they came from overseas), I have to say I have zero sympathy for the left and expect whichever candidate that looks like he is losing will challenge the results.

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      • Since I never saw a President Gore I guess their strategy didn’t work. Does anyone here believe that Trump isn’t setting this election up as illegitimate if he appears to lose? And take it to the courts?

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        • No doubt. And Biden is planning the same thing.

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        • lms:

          Does anyone here believe that Trump isn’t setting this election up as illegitimate if he appears to lose? And take it to the courts?

          I agree with Brent.

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        • And I agree with Lulu. Although as much dirt as DJT verbally casts on the process in order to undermine confidence in it if he loses, I doubt he will change many minds with it, before or after the votes are counted.

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        • Apparently undermining confidence in the process is the new normal. Trump is doing it but so is the Biden camp. And of course those who did not like Trump have tried to undermine the legitimacy of the process since Trump won the electoral vote. It’s just what we do now.

          But even in the 90s there were plenty of folks who asserted every election they lost was “stolen” somehow, whichever side. And saying that, if they lost, it will only be because it was stolen.

          And then there is Stacey Abrams, who apparently considers herself the rightful winner of a election she lost by like 50k votes, if I recall.

          The modern metric for electoral legitimacy is now: did I or my party or preferred candidate win? Then legitimate. Did we lose? Illegitimate.

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        • I honestly cannot remember the last Republican POTUS that was viewed as “legitimate”. I’m thinking you have to go back to Eisenhower.

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        • Yeah. We will see. Although if anybody would actually commit a hate crime and sign it, it would be the BLM/Antifa crowd. Burning down your house and your cars seems a step too far for hoaxing victimhood for attention, though.

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        • I mean the folks saying Reagan was illegitimate were more outliers. Was there a big problem with HW? Clearly, Nixon-post-facto was considered illegitimate. Once Florida 2000 happened, however . . . although even then, the real story was that Dubya “had no mandate”. Which was, I guess, the “illegitimate” of the time.

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        • Reagan has the October Surprise where GHWB flew in a U2 to Paris to tell the Iranians to hold onto the hostages until after the election.

          Also, Iran Contra apparently delegitimized GWHB, plus the fact that he’d formerly ran the CIA. Of course GWB was Selected not Elected and 2004 it was Diebold.

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        • Yeah. I just never felt the Reagan October surprise was ever quite the thing Russian Collusion was. No one actually got impeached for that bit of folderol, for example.

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        • If it’s close, he definitely will. And he’ll have a couple of months to fight it in court, potentially try to get it to SCOTUS. I don’t know how likely this is. I think Trump is less likely to do it than the Biden camp, but even Biden will concede if a Trump electoral victory is significant.

          When it comes to this sort of stuff Trump knows when to cut his losses. If there’s a low chance of him winning a legal argument (which will be the case if it’s clear he lost on election night), he’s not going to dispute it legally or refuse to leave office (although he will call the result illegitimate in public, of course, and forever–but that’s a different thing; Hillary and most of the left have done the same to him since 2016).

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    • I didn’t vote for him and I don’t consider myself a supporter, but I am an anti-anti-Trumper in the sense that I challenge the hysteria and the fact that the threshold for saying anything about Trump is now “It could be true”.

      With regards to the question at hand:

      “Do any of you doubt that he will challenge the election results if it looks like he’s losing or lost?”

      It depends on how he’s losing and other circumstances.

      If he’s ahead in all the results at the end of the election night and over several days that changes then yes. If Biden wins cleanly on election night then probably not.

      It’s even a higher likelihood if it’s a result of court rulings or changes to the standards from what they were going into the election, as happened in Florida in 2000.

      I also expect Biden to challenge a presumptive Trump victory in the courts. The conventional wisdom on the Democratic side is that he absolutely should not concede on election night no matter what.

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    • I also agree with this:

      And I factor in things like this where editorial writers in the NYT are making a serious argument that Democrats should ignore Supreme Court rulings outright.

      Had Trump considered that everyone would be losing their minds.

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      • The resistance edifice was an act to begin with. The left will be preaching unity and that it is time to let the healing begin if Biden wins.

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        • Democrats will. Some elite establishment pro-riot folks, sure–they’ll want to put all the unpleasantness away. A lot of the antifa and BLM types? Especially at the ground level? Probably not so much.

          But enough that they can probably get a handle on it.

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      • The Twitterati replying to Greenwald are insane. A: they clearly miss what he’s saying and, B: They are talking like Trump is saying he’s going to decalre himself dictator for life and burn ballots to keep his hold on power. They’ve just lost their minds.

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    • lms:

      I know most of you here seem to support Trump either because of his hugs to the upper 10% of the country re income or because it would be so nice to stack the court against liberals…

      I don’t know anyone here who supports him because of the former, and I suspect that I am the only one here who prioritizes the makeup of SCOTUS when it comes to voting. Also, of course, I don’t know exactly what you mean by “stacking the court against liberals”, but I don’t want a court that is “against” liberals. I want a court that applies the Constitution faithfully rather than making it up in order to achieve preferred policy results. Trump is more likely to advance that than Biden/Harris (or any other Dem that I am aware of.)

      but I seriously do not understand how anyone can vote for him.

      I explained my thinking here. If I think that the alternative to Trump is fundamentally opposed to my philosophical and political values, why wouldn’t I vote for him?

      Do any of you doubt that he will challenge the election results if it looks like he’s losing or lost?

      I agree with jnc’s assessment, including the point that Biden is just as likely to challenge a Trump victory.

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      • I would add the left owns the entire legal system already. So there is no “stacking” involved.

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      • I don’t know anyone here who supports him because of the former, and I suspect that I am the only one here who prioritizes the makeup of SCOTUS when it comes to voting.

        I don’t like the way either party hugs the upper 10% (or, upper 2%), although the Republicans at least just do it, while the Democrats pick the pockets of the poor and middle class while pretending to be doing it all “for them”. It’s always “grrr! I hate those 1-percenters!” on their way to legislation that mostly tends to protect them, legitimize monopolies, create monopolies for favored corporate interests, etc. Just ask the banks how hard Obama was on the 1%.

        That being said I like the action take by Trump and the Senate for getting judges populated down the chain more than the appointments to SCOTUS. But the brokering of peace agreements, the hard line with China, the prioritization of increasing American self-sufficiency (that Kodak is making the base components for most medicines now and will be doing so in America–may be something that in the future literally saves millions of lives). There’s lots of things I’d rather have a Trump for than a Biden. Ending the endless wars is a big thing for me now, and I don’t see Biden doing that. Tulsi Gabbard would have, or at least tried to. I could have easily voted for her.

        But given the options I would vote for Trump or write in Tulsi Gabbard–and would probably definitely go Trump if I was in a swing state (I am not). It’s not that I love the guy although frankly I like him better from a policy perspective than pretty much every president since Reagan. But of the options I’ve got, I would not vote for Biden. Honestly I’d be more likely to vote for Sanders than Biden at this point. But probably not. Tulsi, though? Yeah, definitely.

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        • “that Kodak is making the base components for most medicines now and will be doing so in America–may be something that in the future literally saves millions of lives”

          That’s nothing but a scam and fraud to facilitate insider trading.

          https://www.epsilontheory.com/the-grifters-chapter-1-kodak/

          https://www.latimes.com/business/story/2020-09-18/kodak-botched-covid-loan

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        • Really? Well, hell. Now I’m pissed off. Definitely voting Gabbard!

          Based on yesterday’s closing price of $33.20 for the stock, I figure Jim and George and Philippe have made about $400 million over the past 48 hours.

          Well if they get away with it . . . that’s impressive.

          I’m focused on Jim and George and Philippe, each of whom were granted tens of thousands of shares in Kodak just over the past 60 days

          That seems very suspicious.

          Remember how I said that the DFC – this $60 billion piggy bank that is one (of many) White House conduits for crony capitalism – was established by law, specifically the 2018 BUILD Act, to support projects in developing countries?

          I get there was a specific law indicating projects in developing countries but re-purposing that for American development is perhaps the least objectionable thing about this to me.

          Ah, well. Still, I naively hope Kodak pulls it off but given their history . . . probably not. Very Solyndra-esque.

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    • The President has clearly been laying the groundwork for a legal challenge if the election goes against him, and he’s now confirmed that he expects the Supreme Court to play a key role. I

      Which is what the Biden camp has been doing as well.

      And while I like a lot of what Trump has done, I don’t like how he conducts himself in other arenas, or some of the things he says. Certain EOs I don’t care for and wasn’t a fan of his Bolton pick or lobbing missiles in Syria. I think the original travel ban was very poorly executed.

      But until the Democrats are prepared to repudiate not just the rioting and looting but antifa and even BLM and reject critical race theory–which is just old fashioned racism and bigotry in a new coat of paint, to my mind–I’m not voting for Biden. But will write in Tulsi Gabbard if that’s an option.

      Like

  3. Mark – Best Demand Letter ever:

    Like

  4. This from David Harsanyi (no Trumpkin, he) pretty much sums up my thinking:

    Not a single journalist or politician in hysterics on the social media right now — most of them having spent four straight years delegitimizing the presidency and attacking the constitutional order — actually believes Trump won’t leave office peacefully if he loses the election. It’s all an act. Trump, of course, gives his opposition endless ammunition to engage in these group fantasies with his reckless answers. For four years now every dumb tweet and comment turns from a legitimate opening for criticism of Trump into a hyperbolic Resistance fever dream about HITLER. The asymmetrical reaction is unbearably hypocritical. Democrats have spent weeks — years, really — contending that Trump simply can’t win the election legitimately. They claimed, without any genuine evidence, that he never won it in the first place. Hillary Clinton instructed Biden that he shouldn’t concede “under any circumstance.” In their “war games,” Democrats were happy to let the military decide the election after convincing governors to threaten secession. During the impeachment trial, Democrats argued that if Republicans didn’t remove the president, the 2020 seat was already stolen. So spare us the theatrics.

    https://www.nationalreview.com/corner/

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    • Mine too. One could argue that in many ways Trump is his own worst enemy–but so are the Democrats. There are numerous paths to unambiguous and inevitable victor for the Democrats against Trump–I don’t see them pursuing any of them. Similarly with Trump–he’s got a clear path to victory but it would require calling the Democrats on some of this stuff instead of just feeding into their fever-dreams.

      Well. It will be an interesting election.

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  5. Good article on one of RBG’s more, er, notorious dissents:

    https://www.nationalreview.com/2020/09/ruth-bader-ginsburg-ledbetter-case-dissent-shows-flaws-in-approach-to-law/

    The late Supreme Court justice Ruth Bader Ginsburg firmly believed that the Constitution is an evolving document that should change to meet the times. Ginsburg’s famous dissent in the 2007 case Ledbetter v. Goodyear Tire & Rubber is a good example of her approach to the law — and of why it is flawed. Ideally, the court’s role within our system of government is to determine whether laws are constitutional, not to correct or overwrite them. Ginsburg thought otherwise and said so in her dissent.

    Like

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