Morning Report: New home purchase applications fall

Vital Statistics:

S&P futures4,379-8.25
Oil (WTI)108.311.59
10 year government bond yield 2.83%
30 year fixed rate mortgage 5.27%

Stocks are flattish this morning as financials report earnings. Bonds and MBS are up small.

The upcoming week has a lot of housing data, with the NAHB Housing market index, housing starts, and existing home sales. We will also get leading economic indicators. The focus will be earnings.

Mortgage applications for new home purchases fell 5% YOY, according to the MBA Builder Application Survey. “Mortgage applications for new home purchases increased in March, which is consistent with typical seasonal trends and a sign of strong underlying demand for housing,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Potential buyers have increasingly looked to new homes as an option, given the lack of existing homes for sale. The average loan size continued to set record highs and reached $436,151. Growth in applications for larger loans continued to dominate application activity.”

Shortages of materials and labor continue to bedevil home builders. The lead times to get things like garage doors are measured in months. This is slowing the pipeline for new homes, and also helps explain the skew towards more expensive homes. The starter homes are rising in price due to general inflation, and rising mortgage rates are making the payment unaffordable for most first-time homebuyers. Builders will probably compensate by developing more attached townhome style properties instead of single family detached homes.

With a shortage of homes overall, remodeling is an alternative for someone who might be in the market for a move-up property. The NAHB remodeling index was flat YOY and way higher than it was pre-pandemic.

Mortgage origination fell at Wells Fargo during Q1. Volumes were down 27% YOY and revenues fell 33% as lower gain on sale margins were partially offset by rising servicing income.

14 Responses

  1. This will be funny if it happens:

    “We have some news for you this morning. If House Republicans take the majority, they are considering imposing term limits for committee chairs and ranking members as part of the chamber’s rules package for the 118th Congress.

    Republicans limit their own members to three consecutive terms atop any committee. Democrats, however, don’t have any term limits. Such a move by Republicans if they take the majority would drastically alter the makeup of the House.”


  2. Good read:

    “People Just Want to Feel Good About War Again

    you can support a war while thinking critically about its public perception

    Freddie deBoer”


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    All men have unlimited funds for child support.


  4. Jesus Christ these people are bug-fucking crazy.


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