Morning Report: Despite rising rates, there are still 11 million refis out there

Vital Statistics:

S&P futures4,611-47.2
Oil (WTI)84.871.03
10 year government bond yield 1.84%
30 year fixed rate mortgage 3.67%

Stocks are lower this morning on fears of inflation and aggressive Fed countermeasures. Bonds and MBS are down.

We won’t have much market-moving data this week, however we will get bunch of housing data with the NAHB Housing Market Index, housing starts, and existing home sales. Earnings season is underway, with a slew of bank earnings this week.

Rising rates have cut the number of high quality refinance candidates to just 7.1 million, the lowest since November 2019. “The latest numbers from Freddie have cut the number of high-quality refinance candidates to just 7.1 million – down from about 11 million at the end of December, and from as high as nearly 20 million earlier in 2020,” Black Knight said. “The last time the population was this small was back at the start of November in 2019, when rates were around 3.75%.”

Black Knight is counting high quality candidates as those with <80 LTV, >720 FICO, and current rates 0.75% above current interest rates. If you relax the LTV and FICO constraints, the number increases to 12 million. Despite these numbers, anyone who has a lot of credit card debt should take a look at a cash-out debt consolidation refi.

Bidding wars are cooling off, however they are still elevated compared to a year ago, according to Redfin. 60% of homes received multiple offers, which was down from 75% in April but up from 54% a year ago. “Buyers should anticipate that they may not win a house until their sixth or seventh bid. If you’re the type of person who falls in love with a house, this is not your market,” said Candace Evans, a Redfin team manager in New York. “If you show a house to 10 buyers, you’ll probably get eight offers. An agent on my team just put a home in the Bronx on the market and started receiving offers even though there hadn’t been a single open house or tour yet. The house ultimately received over 10 offers and went for well above the asking price.”

Given the abject lack of new construction, expect this to continue. Note that lumber is back up near the tops of last summer.

29 Responses

  1. Good read:

    “Perhaps Not Everything is Eugenics
    spoiler: people who never read discovered a word that feels powerful

    Freddie deBoer

    One of the things I discovered early, in my little political niche, was the obsession with magic words. Leftists were forever throwing emotionally loaded terms around, like when the coffeehouse didn’t have raw sugar and they called it fascism. It’s not really hard to understand why: when you have no power, you resort to mysticism. You instill words with powers they can’t really have because you’re desperate to feel in control of something, anything. That’s what “eugenics” has become online; it’s not much different from your average depressed wine mom talking about Mercury being in retrograde. They all just want to feel a little bit of power.”


    • The left’s issue on this is that no one on the right trusts them further than they can throw them.

      I think their opposition to voter ID is evidence that they plan on cheating.


      • They just want their options open.

        They frequently do support (or at least have no objections to) voter ID in solid blue states. Coincidentally.


      • It’s this too:

        “I’ve written about this before: the civil rights era is so venerated in leftist discourse that some people — especially the remarkably bored — gin up civil rights narratives and place themselves at the center. They essentially play Civil Rights Hero the way a kindergartener might play Astronaut.”

        & this:

        “Activist groups are partly to blame for this. Activist fundraising requires that every event be treated as substantially more critical than the asteroid that killed the dinosaurs.”


        • You see Biden do this constantly. Before you know it he’ll start wearing a blood-stained shirt and claim he was with MLK at the scene of the shooting!

          Liked by 1 person

        • Sure you saw these on Ace.

          How Very Dare You


        • Yeah, she and manchin are the Progs hate items now.

          Imagine what they’d say if she didn’t tweet anything?


        • HOW DARE YOU?

          I mean, serious, Takei. How dare someone appreciate MLK day? A politician? Seriously?

          That would be like taking any Democrat who mentioned, say, July 4th in a positive way and saying: “How dare you?”

          That’s one of the big problems with the modern progressive left. You literally can’t agree with them about anything without agreeing with them about EVERYTHING. You are either 100% obedient are you’re basically a white supremacist and domestic terrorist.


        • That’s what you get when the underlying belief is that if you’re not actively “anti-racist” you’re “pro-racism”. A lack of perfect alignment with the favored ideology means you’re actively working for the enemy.


        • McWing:

          That’s what you get when the underlying belief is that if you’re not actively anti-racist your pro-racism.

          You are right, but you should put “anti-racist” in quotes.


        • I was thinking about this the other day, and it seems increasingly clear that Orwell was simply off by a few decades. The parallels are undeniable.

          The one I was thinking about was that in 1984, the Party’s ability to exercise social control over individuals is epitomized by its ability to proclaim an obvious-to-everyone falsehood, that 2+2=5, to be an objective truth, and to get everyone to accept it as such. At the end of the book, we know that the Party has defeated Winston when even he comes to accept that 2+2=5. This is exactly parallel to the current transgender nonsense, most notably in college athletics, trying to force people to accept the obvious-to-everyone falsehood that a male is a woman.


        • There is also a difference in how NewSpeak has been implemented—-rather there is both an expansion of vocabulary and of definitions to remove meaning from words, rather than constraining language and removing words. The effect is the same—it becomes impossible to discuss or communicate ideas because all the terms are in a constant state of redefinition. A modified approach to make NewSpeak happen when lacking a totalitarian government to enforce it by fiat.


        • Also, obviously the attempt to suggest there is no such thing as biological sex is insane. But calling virulent racism “anti-racism” is an especially neat trick. Then insisting everybody has to be appropriately racist—because that’s anti-racist—-that’s something else.


        • Yup. Republican fundraising here is just as bad if not sometimes worse than the Democrats. You get a lot more of the existential angst from the left because it gets broad, broad coverage in the media and you only get WinRed’s “we’re all gonna die if you don’t send us $35 dollars, Trump is asking you personally to save the world” stuff directly off their mailing list.


        • “You see Biden do this constantly. Before you know it he’ll start wearing a blood-stained shirt and claim he was with MLK at the scene of the shooting!”

          His actual go to is being arrested trying to see Mandela.


        • The story is tired, having a shirt with MLK blood on it because, no shit, I was there will be the go to at some point.


    • This guy writes like someone who is very smart and aware, so I have a hard time making that gel with his desire for federalization of voter rules.

      To be clear: I wanted voting rights legislation to pass.

      Getting rid of the filibuster I understand. I have no problem with the filibuster, but I understand why you would see that as an obstacle or a negative if you naively believed the government was capable of doing something productive and did not accept the inevitable fact that the government that governs best, governs least. But that I understand.

      But I don’t see why federalizing voting rules with a bill unlikely to pass constitutional muster (unless they pack the supreme court) seems like a good idea to him. Also don’t see what’s wrong with letting states handling voting their way.

      On Friday, the House passed a bill that did a lot of things, including reconstituting the preclearance requirement in the Voting Rights Act and making voting day a national holiday.

      Why don’t they just pick a thing they can get support for? I’m betting if they just had a bill that made voting day a national holiday that would get passed.

      Personally, I think Republican voter suppression tactics are shitty, but not very effective.

      Wouldn’t another way of looking at that be that they aren’t voter suppression tactics, thus why they do no suppress the vote? Demanding an ID is not voter suppression. It’s a disagreement over how tight the rules should be.

      I’m sure that Republicans would like to tilt the playing field in their favor; they’re clearly trying to cheat

      I guess its his audience but … he also says he wanted to voters “rights” act to pass, which is clearly Democrats wanting to cheat. I’m not arguing that both parties have sizable constituencies who are more interested in winning in perpetuity than the fairness and accuracy of elections, but he supports a bill full of “making it easy for people to cheat”.

      I do agree the stakes are low. Ultimately, anything that lets Democrats harvest ballots will let Republicans harvest ballots, and if they don’t, that’s their fault.


      • This guy writes like someone who is very smart and aware, so I have a hard time making that gel with his desire for federalization of voter rules.

        He is a committed leftist who’s only quibble is with the Party’s marketing. He thinks the fealty to Kendi and DeAngelo turns people off. But he doesn’t disagree with them. He believes in this shit.

        Demanding an ID is not voter suppression.

        Step 1 is to stop acknowledging or supporting the left’s linguistic base-stealing. It isn’t voter suppression. That is the left’s characterization. It is election security. Full stop.


        • It is election security. Strong arguments for it (as if a Republican can vote twice and some Democrat only votes once because of no ID requirements, then that Democrat effectively had their vote stolen from them!).

          And also, it just is the thing it is. It’s requiring an ID, like we do for so many things in life.

          That said I think he’s 100% right about the marketing.


  2. Oh the humanity!

    Must be bugging the administration if they had NPR do a story blame shifting inflation.


    • “The Movement to blame Inflation on Biden!”

      Because, you know, presidents have never been blamed for current economic woes before.

      I love how for modern media/pundits its as if history began yesterday, almost all the time.

      Also the argument about global inflation (ignoring how influential America’s inflation might be on other nation’s economies) sounds like an argument that while Biden isn’t specifically to blame. Quasi-socialist European-style expert bureaucratic-style governance is to blame.

      Biden now has a 45% approval rating

      I’m not sure I trust the poll NPR is using.

      The cite the polling of world leaders–including Jair Bolsonaro who has a lot more problems than just COVID–as examples, “see, nobody likes their leaders right now”.

      “If you’re a Democrat, you should hope that sticker sales aren’t a predictor for midterm elections.”

      Yuh-huh. A truck driver who spent like $5k on his campaign ousted the long-time incumbent Democratic senate president in New Jersey. Expect some upsets in 2022.

      They are going to be able to blame-shift inflation. Person at the top always pays a political price, party at the top always pays a political price. Add to the fact the DNC is presently horrible at making their own case and often seems to be actively trying to alienate everyone to the right of Chairman Mao and, sorry, no, they are going to suffer some political setbacks in the next few election cycles.

      The press’s take on Biden in 2020–and that was all we had, since Biden was MIA–was that Biden was a unifying, moderate centrist and a calm and rational person and so if you like rational centrist people, vote for him.

      This is not an argument they can make presently, about Biden or their party.


    • They probably flipped out over Carville:

      “And if inflation is still at 7 percent in November this year, we’ll lose anyway,” Carville added


  3. There’s that Instapundit line: I’ll start believing it’s an emergency when the people telling me it’s an emergency start acting like it’s an emergency.


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