Morning Report: Home prices soar

Vital Statistics:


  Last Change
S&P futures 3859 10.3
Oil (WTI) 52.90 0.14
10 year government bond yield   1.04%
30 year fixed rate mortgage   2.83%

Stocks are slightly higher on no real news. Bonds and MBS are up small.


The FOMC begins its two-day meeting today. The announcement is scheduled for 2:00 pm tomorrow.


Chuck Schumer said that negotiations for the stimulus may take a while. He is aiming for mid-March, when extended unemployment begins to run out. Meanwhile, the priority seems to be impeaching a guy who is no longer in office.


With stimulus looking further away, and Schumer signaling that negotiations should be tough, I wouldn’t be surprised to see bond yields drift lower. Bond markets are a global phenomenon, and while the US bond yield has been drifting upward, the German Bund (which is a proxy for Europe) has been stuck in a very narrow band around -0.54%.


Home prices rose 11% in November, according to the FHFA House Price Index. “House prices have risen by at least one percent for six consecutive months,” said Dr. Lynn Fisher, FHFA’s Deputy Director of the Division of Research and Statistics. “The acceleration has been slowing but annual gains now outpace the prior housing boom. Current conditions can be explained by fundamentals, including low rates and tight housing supply, which have been intensified by the pandemic.”


The Case-Shiller Home price index reported a smaller nationwide gain of about 9%. The difference is explained by the indices. FHFA only looks at loans which are guaranteed by the US government, so it excludes jumbos and distressed. Affordable homes are in the most demand, and that is where we are seeing the biggest price increases.


The FHFA announced that it will limit cash window purchases for mortgage banks to $1.5 billion per year in order to ensure that smaller banks continue to get access.

The letter agreements codify FHFA conservatorship directives that require the GSEs to purchase loans for cash consideration, and to operate this cash window with non-discriminatory pricing. Additionally, to ensure that the cash window is for the benefit of community lenders, each GSE will limit volume purchased through the cash window to $1.5 billion per lender during any period comprising four calendar quarters.


36 Responses

  1. Honest Joe Biden still up to his old tricks. He’s such a powerful example.


  2. Wish she had won:


  3. Mark:

    You may be interested to know that, unsurprisingly, the WaPo has decided not to maintain a tracker of Biden’s lies, the way they did for Trump. Of course, even if they maintained the project, there is every reason to think that they would have used entirely different standards for classifying a Biden claim as a “lie”, but they obviously can’t be bothered to maintain even the pretense of even-handedness.

    Liked by 1 person

    • I mentioned that in almost every response I’ve made to Biden/Trump lying comparison (in addition to pointing out that the lion’s share of Trump’s “falsehoods” are not things that would be called “lies” when Obama or Biden did them).

      Which is not a defense of Trump or an attack on Biden, but an attack on the press. and highly biased, narrative-shaping organizations like WaPo that masquerade as “news” organizations.

      And yes they would have used entirely different metrics. Trump didn’t deliver on a campaign promise? Lie. Trump said something positive about the economy WaPo didn’t agree with because “reasons”? Lie! Trump claims to have made “the biggest” or “the best” of anything? Lie? Hyperbole? Lie! Spin? Lie! Try to reassure the public, something almost every politician does during at least some crises? LIE!

      That’s not a standard they would ever apply to Biden. That would be like expect Fox News doing a hagiographic bio peace about Obama’s miracle presidency in 2005.


  4. Biden unifies the country by questioning the patriotism of anyone who disagrees with him on federal mask mandates, proclaiming that to disagree with him is “not very American”.

    But hey, at least the divisiveness of Trump is a thing of the past.



    • It’s all pretend. Trump was divisive (and crassly so, which is the real problem). Obama was also divisive. Biden is divisive. I can’t imagine a situation in which a president wouldn’t be divisive because taking sides on issues, controversial or not, is divisive.

      And people say all sorts of things “un-American” or “not very American” which is an imaginary metric. You can pull from anything to claim something is “not American”. The Alien and Sedition act seems “not very American” but could also be looked at as an American precedent. Everything is “American” or “Un-American” depending on what part of America and American history you are looking at.

      It’s arguable than being subservient to an unrepresentative colonial power is American–because at one point it clear was! 😉


    • If you think mask wearing is essential to stop or slow the spread of the virus then you might think a pol who dismisses it is unpatriotic.

      If you think that wearing a mask is social justice posturing then you might think a pol who dismisses it is a freedom fighter.


      I am among those who think that selective mask wearing [e.g., indoors in crowded areas, closer than two meter personal contact for several minutes] is appropriate for my health and for the health of those around me. So I don’t understand Chip Roy to be a freedom fighter. I see him as making it more difficult to live in America other than in isolation and more difficult to start up the recovery of small biz that relies on personal contact. I would only accuse him of being tone deaf, not unamerican, but I am not unsympathetic to that designation for a pol who should know better. Chip is no dummy and I would bet his own doctor has suggested he wear a mask more often.


      • Mark:

        I would only accuse him of being tone deaf, not unamerican, but I am not unsympathetic to that designation for a pol who should know better.

        There was a time when you thought that for a president to “…suggest he is more “American” then other specific American citizens is despicable.” I guess the rules are president-specific.


        • I still think that, rationally. I am a bit emotional about COVID. Rosanne’s cousin Diane had been in a ventilator for 13 days, touch and go, until this morning. Still upsetting.


        • You may be atypically immune but I find this to be mostly wired into human nature. We have tribal affiliations and they bias us. It’s how we are wired and it happens primarily subconsciously.

          If it didn’t our government would be way better and our society would be way better except that clearly conferred a survival advantage at one point so now we are stuck with it.

          I try pretty hard to be consistent but I know I’m not always. It’s tough.


        • KW:

          You may be atypically immune but I find this to be mostly wired into human nature.

          I am not immune, for sure, but I do make an effort to be somewhat self-aware about it.



    I don’t watch CNBC or handle my own trades, but this is fascinating.


  6. God this is great.


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