Morning Report: Home price appreciation continues

Vital Statistics:

  Last Change
S&P futures 4,520 -4.2
Oil (WTI) 68.44 -0.85
10 year government bond yield   1.29%
30 year fixed rate mortgage   3.05%

Stocks are lower this morning on no real news. Bonds and MBS are up small.

 

Home prices rose 1.6% MOM and 17.4% YOY, according to the FHFA House Price Index. We saw torrid price appreciation in several MSAs including Boise, Austin, and Salt Lake City. As we saw from the latest FOMC minutes, the Fed is focusing on home price appreciation and how its MBS purchases affect it. Separately, the Case-Shiller Home Price Index rose 2.2% MOM and 18.6% YOY.

 

Home Price appreciation is driving up asking rents for single family homes. They are up 13% YOY for SFR, while up only 8.3% for apartments. We have seen all sorts of institutional money flood into the SFR space over the past year, as high cap rates and home price appreciation create returns that are hard to replicate elsewhere. While eviction moratoriums have been an issue, many investors are targeting higher-income renters who have been less affected by COVID job losses.

 

The share of loans in forbearance was unchanged last week at 3.25% or about 1.6 million homeowners. “The share of loans in forbearance changed little once again this week, as both new requests and exits remained at a slow pace,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “We expect a sharp increase in forbearance exits over the next month as many borrowers reach the 18-month mark and see their forbearance plans end. For those borrowers who have exited in August, the majority either enter deferral plans or obtain modifications.”

 

While the Federal Government’s eviction ban was shot down by SCOTUS, several states still have eviction moratoriums in place, including California, New Jersey, and DC.

 

Latest from Fannie Mae regarding homeowners affected by Hurricane Ida. “We urge everyone in the path of the storm to focus on their safety,” said Cyndi Danko, Vice President, Single-Family Risk Management, Fannie Mae. “Fannie Mae is committed to ensuring assistance is available to homeowners and renters in need and we encourage residents impacted by this storm to seek assistance as soon as possible.”  

 

Consumer confidence slipped in July, according to the Conference Board. While the employment situation remains strong, consumers were less optimistic about present and future business conditions.

23 Responses

  1. Long but good read on one progressive’s disillusionment with the left

    https://sashastone.substack.com/p/what-happened-to-you

    Like

  2. It takes a heart of stone, or a level of maturity I don’t possess, not to laugh.

    Like

  3. I can’t decide if this is funnier than the Phil McKraken line.

    Like

    • He is including St. Barack in the last 19 years?

      That is heresy

      Like

    • They still can’t tell the truth:

      Like

    • McWing:

      I can’t decide if this is funnier than the Phil McKraken line.

      NeverTrumpers are even more invested in Biden than the average D. They will never admit his incompetence.

      Like

    • Just NLP. Start with a credible assertion of “honest” that can be subconsciously accepted then hope that leads to accepting “competent” though that is patently false.

      Like

  4. Interesting.

    Gruber and Krause are leaving the agency following criticism of the White House’s decision to leap frog over the agency to recommend COVID-19 booster shots. The move to start boosters next month has been blasted by the World Health Organization, which questions the data to support the need for a third shot—especially as poorer nations continue to struggle with getting first shots to people.

    https://www.fiercepharma.com/pharma/key-vaccine-leaders-departing-fda-covid-19-booster-question-looming

    Like

    • The move to start boosters next month has been blasted by the World Health Organization, which questions the data to support the need for a third shot—especially as poorer nations continue to struggle with getting first shots to people.

      How in the world would data establishing whether or not a third shot is needed be in any way at all dependent upon how many shots people in poorer countries have been able to get?

      But remember…the WHO is all about the science!

      Like

  5. This cannot be true as I’ve been reliably informed that Biden has a lot of foreign policy experience.

    https://www.washingtonpost.com/world/2021/08/31/europe-america-shift-afghanistan/

    Like

    • So maybe travel restrictions (and other restrictions) are not about the science and actual risk at all, but just another negotiating tactic.

      “Moreover, on Monday, the European Union removed the United States from its “safe list” of nations whose residents should not face travel restrictions amid the coronavirus pandemic. The move, which functions as guidance for the bloc’s 27 member states, was a reaction to the worsening state of affairs in the United States, home once more to spiking infections and a coronavirus vaccination rate that now lags behind the E.U.

      It may also reflect widespread European frustration at Biden’s refusal to lift punitive pandemic-related travel bans on citizens of European countries. “The United States got a free pass over the summer, even as the situation in many parts of the country deteriorated dramatically,” Jacob Kirkegaard, a senior fellow at the German Marshall Fund, told my colleague Reis Thebault, adding that “the U.S. exceptions became harder and harder to defend in the face of a lack of reciprocity from the Biden administration.”

      Now that lack of reciprocity is just one ripple in a growing lake of transatlantic discontent. For all the public health reasons to impose restrictions on U.S. travelers, the E.U.’s new ruling, tweeted François Heisbourg, a senior adviser for Europe at the International Institute for Strategic Studies, may also be seen as a “a broader vote of no-confidence in the US administration.””

      Like

  6. Wow

    Reuters reviewed a transcript of the presidential phone call and has listened to the audio to authenticate the conversation.

    https://www.reuters.com/world/exclusive-call-before-afghan-collapse-biden-pressed-ghani-change-perception-2021-08-31/

    Not only did they leak the transcript, they leaked the actual recording.

    Just don’t call it the Deep State.

    Like

  7. Good read. This approach is now being applied against “domestic terrorists” as well.

    Like

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