All Things in Moderation

Vital Statistics:

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

Existing home sales rose 3% in January, according to NAR. They came in at a seasonally-adjusted annual rate of 4.0 million units. This was down about 1.7% on a year-over-year basis. “While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” said NAR Chief Economist Lawrence Yun. “Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year. The median home price reached an all-time high for the month of January,” Yun added. “Multiple offers are common on mid-priced homes, and many homes were still sold within a month. The elevated share of cash deals – 32% – indicated a market full of multiple offers and propelled by record-high housing wealth.”

Inventory was up marginally to 1.01 million units, while the median home price rose 5.1% YOY to $379,100. The South and the West saw the most activity, while the Northeast and Midwest were flat.

Philly Fed President Patrick Harker warned against betting on early rate cuts. “I would caution anyone from looking for [a rate cut] right now and right away,” Harker said in a speech at the University of Delaware … I will signal my belief that we’re ready for a rate decrease when all the data – both the hard and the soft – give me that signal,” he said.

Separately, Goldman has moved their first cut forecast from May to June.

The economy expanded in February, albeit at a slower pace according to the S&P Flash PMI. While services slowed, manufacturing hit the highest level in 10 months. Manufacturing was weak most of last year. Importantly, cost pressures continued to ease as input prices rose at the slowest pace since October 2020.

Rocket reported fourth quarter earnings. Volume in the fourth quarter fell 9.3% to $17.3 billion, while gain on sale increased from 217 basis points to 268. For the full year 2023, origination volume fell 41% to $78.7 billion.

It has been brutal out there.

Filed under: Economy |