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Monday - August 26, 2019  

The New York Federal Reserve reports that total household debt rose to an all-time high in Q2 2019 marking the twentieth consecutive quarter with an increase. Total household debt rose $192 billion to $13.86 trillion. The previous peak was $12.68 trillion in Q3 2008. Within the numbers it showed that mortgage debt also reached a peak of $9.4 trillion. In addition, credit card balances rose to $868 billion while student debt came in at $1.48 trillion.

In economic news, July Durable Orders rose 2.1% versus the 1.2% expected. The ex-transportation number came in light. Overall, the US consumer remains solid though the manufacturing sector is slowing due in part to the US/China trade issues. This week the markets will receive data on the inflation reading Core PCE and personal spending along with the closely watched Consumer Confidence Index, which is just below all-time highs. There will also be a few manufacturing reports. The second read on Q2 Gross Domestic Product will be released this week.

 

Friday - August 23, 2019  

Sales of newly-constructed single-family homes fell in July from June, though the numbers in June were revised sharply higher. Low mortgage rates have been a support mechanism for the housing market while low inventories and a construction slowdown have made purchases less affordable for potential buyers. The Census Bureau reports that new home sales in July fell to an annual rate of 635,000 units, below the 645,000 expected. However, June was revised sharply higher to 728,000 from 646,000. Sales were up 4.3% from July 2018.

Fed Chair Powell spoke this morning at the Fed sponsored Jackson Hole Economic Symposium. Mr. Powell says the Fed will act as appropriate on rates, the Fed is in risk management mode, and sees further evidence of slowing global growth while inflation remains low. Mr. Powell also reiterated that the Fed's challenge now is to sustain the current economic expansion. Mr. Powell went on to say that the US outlook continues to be favorable and job growth and rising wages continues to support consumer spending.

 

Thursday - August 22, 2019  

Americans filing for first-time unemployment benefits remained near 50-year lows in the latest week as the labor market continues to remain a bright light in the US economy. The Bureau of Labor Statistics reports that weekly initial jobless claims fell by 12,000 in the latest week to 209,000. The four-week moving average of initial claims, which irons out seasonal abnormalities, was essentially unchanged at 214,500.

The two-day Jackson Hole Economic Symposium kicks off today and is hosted by the Kansas City Federal Reserve Bank. Participants include prominent central bankers and finance ministers, as well as academic luminaries and leading financial market players from around the world. Fed Chair Powell will be speaking tomorrow morning around 10:00 a.m. ET. This morning, Kansas City Fed's Esther George said she disagreed with the recent fed funds rate cut.

 

Wednesday - August 21, 2019  

US stocks are rebounding this morning after solid earnings from Lowe's and Target signaled strong consumer spending. The headlines quelled fears of slowing economic growth here in the US. Better-than-expected retail sales over the past four months also confirms solid consumer spending. The US economy remains the cleanest shirt in the laundry compared to global economies.

Mortgage rates were essentially unchanged in the latest week and remain near three-year lows. The Mortgage Bankers Association reports that the 30-year fixed-rate mortgage was 3.90% in the latest week with an average 0.35 in points. The Market Composite Index, a measure of total mortgage loan application volume, fell 1%, the Refinance Index rose a meager 0.4% while the Purchase Index fell by 4%.

The minutes from the July 31 Fed meeting will be released this afternoon at 2:00 p.m. ET and could stir things up a bit in a rather quiet week for trading. The August doldrums have set in as the summer comes to a close with many players away on vacation. The minutes could reveal the path of future interest rate policy.

 

Tuesday - August 20, 2019  

Low mortgage rates will continue to boost mortgage originations in 2019, reports the Mortgage Bankers Association (MBA). The MBA is forecasting that the 30-year fixed-rate mortgage will average 3.70% in Q3 and Q4 of 2019, down from its previous forecast of 3.90%. The low rate environment will also boost total originations by 15% in 2019 compared to last year to $1.86 trillion from $1.64 trill in 2018. The MBA went on to forecast that home prices will increase 4.7% in 2019 from the 6% gain seen in 2018. In conclusion, the MBA sees economic growth (GDP) will decrease to 1.7% in Q4 2019 from a 3.1% in the first three quarters of 2019.

A report out by Capital Economics shows that home prices will increase by 3% in 2019, up from a 2% rise that was forecasted in the beginning of the year. Mortgage rates are hovering near a three-year low and are down from last year's average of 4.53%. In addition, low housing inventory will also help to boost prices. The report went on to reveal that given the upcoming slowdown that will weigh on job creation and earnings, potential buyers may be less willing to bid aggressively for a home.

US stocks continued their rebound higher yesterday on easing concerns surrounding trade, currency, and yield curve issues. Though with little data today and in the absence of any glaring headlines along with summer trading desks below normal capacity and lower volumes, trading should be on the quiet side. There were reports that the White House is exploring a temporary payroll tax cut to boost consumption but that was later denied by the administration. The markets may begin to heat up tomorrow with the Fed minutes being released and the Jackson Hole Economic Symposium on Thursday.

 

Monday - August 19, 2019  

The National Association of REALTORS reports that housing affordability rose in June from a year ago due in part to three-year low mortgage rates. The Housing Affordability Index rose to 151.9 in June from June 2018, a 10% rise. A higher reading means that homes are getting more affordable that measures prices, incomes, and financing costs. The median price for single-family homes across the US was $288,900 in June, up 4.5% from $276,500 in June 2018. Freddie Mac reported last week that the 30-year mortgage rate was 3.60% compared to 4.53% a year ago.

US stocks begin the week considerably higher as global recession fears ease a bit while President Trump said over the weekend that he doesn't see a recession here in the US. And after several global central banks announced additional stimulus plans late last week, stocks are surging with Dow futures +300 points. The week is light on economic data. The highlight this week will be the two-day Jackson Hole Economic Symposium hosted by the Fed that begins on Thursday. The Fed minutes from the July 31 meeting will be released Wednesday afternoon and could offer some clues as the future path of interest rates.

 

Friday - August 16, 2019  

New home construction across the US in July declined from June falling for the third straight month, due in part to a drop in multi-family dwellings. US housing starts fell nearly 4% in July from May to an annual rate of 1.191 million units. From a year ago, starts were up 0.6%. Multi-dwelling units plunged 17% month-over-month and were down 4.7% annually. Single-family starts, which make up the bulk of the housing market, rose 1.3% from June and up almost 2% year-over-year.

Rental prices edged higher in July due to household numbers rising while apartment development has not kept up with demand. RentCafe reports that the nation's average rent rose $48 from a year ago to $1,469, up 0.2% from June and higher by 3.4% from a year ago. “A slow recovery in construction has led to a nationwide housing shortage,” said Doug Ressier at Yardi Matrix. “The number of households is now rising at the same level as in the 1990s and early 2000s, but apartment development is not keeping up with demand, leading to rising prices.”

 

Thursday - August 15, 2019  

The consumer is alive and kicking due to a strong labor market. July retail sales rose 0.7%, well above the +0.3% expected, the biggest gain in four months. When stripping out autos, sales jumped 1% versus a gain of 0.3%. Within the report, the control group number rose 1% well above expectations. The control group is all sales, excluding receipts from auto dealers, building-materials retailers, gas stations, office supply stores, mobile homes and tobacco stores. This filtered number is a more precise method of gauging consumer spending, and consumer spending makes up nearly 70% of US GDP.

After declining since the year began, mortgage rates held steady in the latest week and remain at multi-year lows. Freddie Mac reports that the 30-year fixed-rate mortgage was unchanged this week at 3.60% with an average point of 0.50. A year ago this time, the rate averaged 4.53%. Sam Khater, Freddie Mac’s chief economist, says, "The decline in mortgage rates over the last month is causing a spike in refinancing activity – as homeowners currently have $2 trillion in conventional mortgage loans that are in the money – which will help support consumer balance sheets and increase household cash flow. On top of that, purchase demand is up seven percent from a year ago.”

The Mortgage Bankers Association reports that its Builder Application Survey for July showed that mortgage applications to purchase new homes surged 31% from last year. On a month-over-month basis, applications rose 11%. The new home sales estimate is derived using mortgage application information from the BAS, as well as assumptions regarding market coverage and other factors. "July's strong new home sales increase on a monthly and annual basis was driven by the ongoing decline in mortgage rates, combined with steady housing demand and a still-healthy job market," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting.

 

Wednesday - August 14, 2019  

Mortgage application activity surged in the latest week as mortgage rates fell again and remain at multi-year lows. The Mortgage Bankers Association reports that the Market Composite Index, a measure of total mortgage loan application volume, rose 22% in the latest week. The Refinance Index soared by 37% while the Purchase Index rose 2%. The 30-year fixed-rate mortgage fell eight basis points to 3.93%, the lowest since November 2016, with 0.35 in points. The jumbo 30-year fell to 3.88% from 3.96% with 0.24 in points.

Sale prices for newly built homes fell in Q2 2019 while supplies of new homes declined in the latest report from real estate brokerage Redfin. The company reported that supply of new homes was down 1%, which the largest annual decline since the first quarter of 2013. In the same time, the sales price for newly built homes dropped 0.5% year over year to a median price of $372,900. "I expect to see new-home inventory stay low overall. But low mortgage rates and more affordable prices for new homes mean sales could strengthen a bit in the coming months," said Redfin chief economist Daryl Fairweather.

US stocks are plunging today after weak economic data from Germany and China stoked global recession fears. The Dow Jones Industrial Average was down over 600 points this morning at its worst level. Global economies continue to weaken but here in the US, the economy is still solid and as consumer confidence remains near all-time highs. In addition the US labor market is the strongest it's been in 50 years, as evidenced by the 3.7% unemployment rate.

 

Tuesday - August 13. 2019  

From the positive news department, the NFIB Small Business Optimism Index rose to 104.7 in July, just below all-time highs as expectations for business conditions, real sales, and expansion made solid gains. "While many are talking about a slowing economy and possible signs of a recession, the 3rd largest economy in the world continues to defy expectations, generating output, creating value, and expanding the economy," said NFIB President and CEO Juanita D. Duggan. "Small business owners want to grow their operations, and the only thing stopping them is finding qualified workers." Small businesses are the lifeblood of the US economy and from all signs, it is generating a solid working environment.

Consumer inflation edged higher in July due in part to rising gasoline and housing costs. A bit warmer-than-expected Core Consumer Price Index (CPI) for July was reported as it rose 0.3% from June versus the 0.2% expected while year-over-year it increased 2.2% from 2.1%. Headline CPI rose 1.8% from 1.6% in the 12 months ended in July. Not a big surge higher but above the July numbers. Inflation remains on the cool side which has helped to keep interest rates historically low.

Many pundits continue to talk of a recession indicator in the closely watched 2- and 10-year yield spread, as it narrowed to three basis points yesterday. If an inversion were to occur, where long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality, a recession comes in about 22 months on average after the curve inverts. That would be almost two-years from now, where in that time span anything can take place. The Federal Reserve Bank of the US has said it will use all of its power to avoid an economic slowdown.

 

Monday - August 12, 2019  

There are no economic reports due for release today, but the rest of the week the markets will receive data from CPI, housing, manufacturing, retail sales and consumer sentiment. Earnings season will be coming to an end with 90% of the S&P 500 companies having reported their numbers. Of those companies that have reported, 73% have beaten analyst estimates. 
The markets will continue to ebb and flow with the trade and currency issues this week while economic data could also impact trading.

Mortgage credit availability decreased in July led by declines in conforming and government indices, reports the Mortgage Bankers Association. The Mortgage Credit Availability Index (MCAI) fell by 0.4% to 189.0 last month. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012.

 

Friday - August 9, 2019  

Fannie Mae reports that due to improving job and mortgage rate expectations, its housing sentiment survey hit a fresh high in July. The Home Purchase Sentiment Index rose 2.2 points in July to 93.7, a new survey high. Five of the six components increased in July with a big jump in the "Confidence about not losing a job" category. The net share of Americans who say it is a good time to buy a home increased 3 percentage points to 26%. “Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category," said Doug Duncan, Senior Vice President and Chief Economist of Fannie Mae.

In the news, the currency manipulation issues with China's yuan have eased a bit with no fresh news from the trade front. This morning, the July Producer Price Index, or wholesale inflation data, confirmed what the markets have been seeing for a decade: muted inflation and as a result, little market reaction. The yield on the 10-year Treasury note is near unchanged at 1.71% up a bit from Wednesday's low of 1.59%. US stocks are lower after yesterday's big gains. The Dow gained back nearly 1,000 points from the 25,440-low seen on Wednesday to yesterday's close of 26,007. Next week, the economic calendar heats up as the markets may continue to deal with both currency and trade issues with China.

 

Thursday - August 8, 2019  

Continued uncertainty surrounding the US/China trade and currency issues sent bond prices higher late last week and early this week which pushed mortgage rates to lows seen in November 2016. Freddie Mac reports that the 30-year fixed-rate mortgage fell to 3.60% early this week from 3.75% last week. That rate does carry an average 0.6 in points and fees. Sam Khater, Freddie Mac’s chief economist, says, "Consumer sentiment remains buoyed by a strong labor market and low rates that will continue to drive home sales into the fall.”

ATTOM Data Solutions released its Midyear 2019 US Foreclousre Market Report showing that foreclosure filings in the first six months of 2019 are down nearly 18% from a year ago. In the first half of 2019 there were 296,458 US properties with foreclosure filings, and as mentioned, this number was down 18% from the same period last year and down a whopping 82% from the peak of 1,654,634 in the first six months of 2010. “Our midyear 2019 foreclosure activity helps to show an overall view on how foreclosure activity is trending downward,” said Todd Teta, chief product officer at ATTOM Data Solutions.

Americans filing for first-time unemployment benefits declined in the latest week and remain near 50-year lows. Weekly Initial Jobless Claims fell by 8,000 in the latest week to 209,000 as the labor market continues to run at strong levels. The four-week moving average, which irons out seasonal abnormalities, rose moderately from 211,500 to 212,250. A strong labor market coupoed with solid consumer spending will keep recesssion fears on the shelf for the foreseeable future.

 

Wednesday - August 7, 2019  

Mortgage rates continued to edge lower in the latest week due in part to slowing global growth along with trade fears. The Mortgage Bankers Association reports that the 30-year fixed-rate mortgage fell seven basis points to 4.01% in the latest week with an average 0.37 in points. It is the lowest rate since November 2016. Within the report it showed that the Market Composite Index, a measure of total mortgage loan application volume, rose 5.3%. The Refinance Index increased 12% while the Purchase Index fell 2%.

The US bond market is trading higher once again as global yields continue to decline and drag US yields lower. The 10-year Note price is soaring to the tune of 103 basis points while Mortgage Bonds are up, though the gains are far less. Weak economic data out of Germany, slowing growth fears coupled with three more global central banks cutting interest rates today has sparked this flight-to-safety trade into the US dollar and US bond market. The German 10-yr Bund has fallen to an all-time low of -0.60% while the US 10-yr yield has fallen to 1.62%, a near three-year low. Investors are looking for positive yielding "safe" assets, like here in the US.

 

Monday - August 5, 2019  

News that China has devalued or let its yuan slip below a key level has sent global stock markets lower while US Treasury prices soar. The yield on the 10-year T Note has fallen to a three-year low of 1.77%, though above earlier levels, as global investors seek the ultra-safe haven of the US dollar and the higher yields of US Treasury markets. The Dow Jones Industrial Average was down over 500 points in early trading.

The only economic report released today was the July ISM Service Index which came in at 53.7, down from 55.1 in June. This is the index’s lowest reading since August 2016, when it registered 51.8. Within the data it showed that employment component increased. A reading above 50% indicates the non-manufacturing sector economy is generally expanding; below 50% indicates the non-manufacturing sector is generally contracting.

 

Monday - August 5, 2019  

News that China has devalued or let its yuan slip below a key level has sent global stock markets lower while US Treasury prices soar. The yield on the 10-year T Note has fallen to a three-year low of 1.77%, though above earlier levels, as global investors seek the ultra-safe haven of the US dollar and the higher yields of US Treasury markets. The Dow Jones Industrial Average was down over 500 points in early trading.

The only economic report released today was the July ISM Service Index which came in at 53.7, down from 55.1 in June. This is the index’s lowest reading since August 2016, when it registered 51.8. Within the data it showed that employment component increased. A reading above 50% indicates the non-manufacturing sector economy is generally expanding; below 50% indicates the non-manufacturing sector is generally contracting.

 

Friday - August 2, 2019  

And the survey says: 164K jobs created in July, just above the 160,000 expected, reports the Bureau of labor Statistics. The report showed that revisions for May and June were revised lower by 41,000, the Labor Force Participation Rate ticked up to 63%, and the U6 number, or total unemployed, fell to 7% while average hourly earnings rose 0.3% versus 0.2% expected. The unemployment rate inched higher to 3.7% from 3.6% as more Americans entered the workforce. Overall a solid report.

Yesterday, the White House took the US markets by surprise when it announced it may slap a 10% tariff on an additional $300 billion in Chinese exports entering the US. The headlines pushed bond prices higher, yields lower while US stocks fell. The president did say that he would hold off on the tariffs if certain measures are met and meet in September as scheduled. Stocks are modestly lower after the volatility that took place this week. The markets will now be eagerly awaiting any new trade headlines, which could turn positive rather quickly.

 

Thursday - August 1 , 2019

The Federal Reserve cut the benchmark short-term Fed Funds Rate (FFR) yesterday by 0.25% for the first decrease in that rate since December 2008. The move did not come as a surprise though the Fed signaled that there may just be one more rate cut in 2019, down from three cuts that were expected before yesterday's Fed meeting. The decrease in the short-term rate will impact personal and car loans, credit cards and the like. The FFR is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight, on an uncollateralized basis.

US construction spending fell for the second month in a row in June and was the biggest decline in seven months fueled by a big drop in private construction spending. The Commerce Department said construction spending declined 1.3% from May. In a separate report, the ISM National Manufacturing Index fell to 51.2 in July, the lowest reading since August 2016. The declines were due in part to the lingering effects of the trade issues between the US and China.

Mortgage rates were unchanged this week and remain near multi-year lows and seem to be bottoming out after the steep decline in 2019. Freddie Mac reports that the 30-year fixed-rate mortgage was unchanged this week at 3.75% with an average 0.6 in points and fees. Freddie Mac says going forward, the combination of low mortgage rates, tight labor market and high consumer confidence should set up the housing market for continued improvement in home sales heading into the late summer and early fall.

 

Wednesday - July 31, 2019

Freddie Mac released its Economic & Housing Research Forecast for July showing that the housing market will see increased momentum due to low mortgage rates. Freddie Mac is forecasting that the 30-year fixed-rate mortgage will average 4.1% in 2019 and 4% in 2020. In addition, consistently strong homebuilder confidence and lower mortgage rates support our view that housing starts and sales will recover from their slump in 2018. Home prices are expected to rise 3.4% in 2019 and 2.6% in 2020.

Freddie Mac went to forecast that total mortgage originations to be $1.8 trillion in 2019 and $1.7 trillion in 2020. The refinance share of originations is expected to increase to 34% in 2019, before decreasing slightly to 28% in 2020, as the effect of lower rates on refinance originations tapers over time. As far as economic growth, Gross Domestic Product is expected to average 2.1% in 2019 before decelerating to 1.8% in 2020.

Private payroll growth rebounded in July after a weak reading in June. ADP private payrolls rose 156,000 in July, above the 150,000 expected while June was revised higher to 112,000 from 102,000. “Job growth is healthy, but steadily slowing,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement. "Hampering job growth are labor shortages, layoffs at bricks-and-mortar retailers, and fallout from weaker global trade.”

 

Tuesday - July 30, 2019 

Inflation continued to remain tame in June, as evidenced by a key inflation indicator. The Core Personal Consumption Expenditure (PCE), which strips out volatile food and energy, rose 1.6% in June, below the 1.7% expected. The Core PCE is the Fed's favorite inflation gauge and it has set a target range of around 2%. The Fed has said that inflation will continue to run low for several years to come. Inflation can be defined as the overall general upward price movement of goods and services in an economy.

Home price gains continued to cool off in May and have come back down to more sustainable levels. The S&P 20-City Home Price Index rose 2.4% annually in May, down from 2.5% in April and well below the 7% gains seen a year ago. On a national level, the Home Price Index rose 3.4%. On a monthly basis, the 20-City Index rose 0.1%. Philip Murphy, Managing Director and Global Head of Index Governance at S&P Dow Jones Indices said, “Among 20 major US city home price indices, the average year-over-year gain has been declining for the past year or so and now stands at the moderate nominal year-over-year rate of 3.1%."

The Conference Board reports that the Consumer Confidence Index in July surged to 135 versus the 125 expected and up from 124 in June. It was the third highest reading since October 2000. Within the report it said that those saying jobs are “plentiful” increased from 44% to 46.2%, while those claiming jobs are “hard to get” declined from 15.8% to 12.8%. “After a sharp decline in June, driven by an escalation in trade and tariff tensions, Consumer Confidence rebounded in July to its highest level this year. These high levels of confidence should continue to support robust spending in the near-term despite slower growth in Gross Domestic Product.”

 

Monday - July 29, 2019

The US capital markets are on hold today in what is shaping up to possibly be a volatile week. The inflation reading and the Fed's favorite inflation gauge, the Core PCE, will be released on Tuesday while the closely watched Jobs Report for July is released on Friday. The two-day Federal Open Market Committee meeting will kick off on Tuesday and ends Wednesday at 2:00 p.m. ET with the release of the monetary policy decision. It is expected that the short-term Fed Funds Rate will be cut by 25 basis points.

Due in part to a strong job market, credit scores rose to a three-year high recently, reports Ellie Mae. The average credit score of borrowers for all types on mortgages rose to 731 in June. Breaking down the numbers showed that, for conventional mortgages backed by Fannie Mae and Freddie Mac, the average FICO score for refinances was 742 and 754 for loans to purchase homes. The current unemployment rate is 3.7%, the lowest in almost 50 years.

 

Friday - July 26, 2019  

Economic growth edged lower in the second quarter of 2019. The Bureau of Economic Analysis reported that Gross Domestic Product (GDP) in the second quarter of 2019 rose 2.1%, down from 3.1% in Q1. However, a surge in consumer and business spending pushed the Personal Consumption Expenditures index higher by 4.5%, the best since Q4 2017, offseting some of the negatives within the report. Recent tariffs and a global economic slowdown stunted growth somewhat in Q2 though a GDP with a 2% handle is still solid.

After a slow week in the markets with little economic data or glaring headlines, next week is shaping up to be volatile given the three risk-filled events in the Core PCE, the Fed meeting, and the jobs report. In addition, the US/China trade talks will be ongoing and the above events could fuel an uptick in volatility and could fuel a disruption in the markets given the outcomes.

The two-day Fed meeting will kick off on Tuesday and ends Wednesday at 2:00 p.m. ET with the release of the monetary policy statement. It is widely expected that the Fed will cut the benchmark short-term Feds Fund Rate by 25 basis points. Fed Chair Jerome Powell will hold a press conference immediately following the statement release at 2:30 p.m. ET. The Fed Funds Rate is currently at 2.50% and is the interest rate in which banks and other depository institutions lend money to each other, usually on an overnight basis.

 

Thursday - July 25, 2019  

Despite slowing economies across the globe, here in the states, economic data remains impressive. This morning, June Durable Orders came in better-then-expected rising 2% versus the 1% expected and up from the -1.3% reported in May. Weekly Initial Jobless Claims remain near 50-year lows falling 10,000 to 206,000 in the latest week.

Mortgage rates edged lower in the latest survey after a slight increase in the previous week. Freddie Mac reports that the 30-year fixed-rate mortgage fell six basis points to 3.75% and is hovering near three-year lows. "While the improvement has yet to impact home sales, there’s a clear firming of purchase demand that should translate into higher home sales in the second half of this year,” said Sam Khater, Freddie Mac's chief economist.

The US Census Bureau reports that the homeownership rate in Q2 2019 slightly declined to 64.1% from 64.2% in Q1 2019. Across the nation, the rate was the highest in the Midwest at 68%, followed by the South at 66Z%, the Northeast at 61.2% while the West saw a 59.3% homeownership rate. The rate has been declining in the past year due in part to rising prices and low inventories of homes for sale on the market.

 

Wednesday - July 24, 2019  

The US Census Bureau reports that new home sales in June jumped 7% from May to an annual rate of 646,000 units. Sales for new single-family homes in three past three months were revised lower. On an annual basis, sales rose 4.5%. Across the nation, New Home Sales surged in the West, were flat in the South with declines seen in the Northeast and Midwest. The median new home price was unchanged at $310,400 from a year ago.

Despite mortgage rates inching lower and at multi-year lows, mortgage application volume declined in the latest week. The Mortgage Bankers Association (MBA) reports that the Market Composite Index, a measure of total mortgage application volume, fell 1.9% in the week ended July 19, 2019. In addition, the Refinance Index decreased 2% while the Purchase Index fell 1.6%. On the rate front, the 30-year fixed-rate mortgage fell four basis points to 4.08% with points at 0.33. The jumbo rate declined to 4.04% from 4.07% with 0.25 points while the FHA fell to 3.98% from 4.01% with 0.31 points. The MBA says the survey covers 75% of all US residential mortgage applications.

 

Tuesday - July 23, 2019  

The National Association of REALTORS® reports that existing home sales in June fell 1.7% from May to an annual rate of 5.27M units versus the 5.30M expected. The decline is due in part to the continued shortage of homes for sale on the market. Sales fell 2.2% from June 2018. Modest gains were seen in the Northeast and Midwest with declines in the South and West. The median existing home-price for all housing types hit an all-time high of $285,700, up 4.3% from June 2018. Inventories are running below the normal 6-month level, currently at 4.4-months.

Due in part to solid US economy, a strong job market and modestly rising wages, the nation’s median home price increased for the third consecutive month, up 3.4% in June from a year earlier, according to Redfin. U.S. home prices hit a median price of $321,200 last month. In addition, only 6 of the 85 largest metro areas saw an annual decline in their median sale price. Redfin chief economist Daryl Fairweather said, "Economic growth is a double-edged sword for the housing market. The increase in demand for low- and moderately priced starter homes is pushing up prices for the most affordable segment of the market."

Strong earnings are lifting US stocks today while weighing on bond with both prices and yields near unchanged. Dow components Coca-Cola and United technologies along with Lockheed Martin, Hasbro and Pulte Homes are pushing stocks higher and capping any price gains for bonds. In the US debt ceiling news, it looks like a two-year deal has been reached in Congress. This morning, the International Monetary Fund cut its global growth forecast but upped the numbers for the US as the economy here in the states continues to be a bright light among world economies.

 

Monday - July 22, 2019  

A lack of affordability has become commonplace for first-time homebuyers in the past few years but builders vow that it is about to change. Builders are now looking to build homes that are smaller with lower square footage to cut costs. In addition, builders are also looking to increase production of townhouses to meet the demand for more affordable housing. The National Association of REALTORS® reports that KB Home says its first-time buyer segment of homes is growing rapidly. Jeff Mezger, CEO of KB Home, told Forbes.com that 55% of KB’s new home deliveries in the second quarter of this year were to first-time home buyers—its highest percentage in a decade.

The closely watched S&P 500 Stock Index is modestly higher to begin the week as the major averages hover near all-time highs. Earnings season is in full bloom this week as S&P 500 company profits are now expected to rise 1%, a reversal from a small decline that was previously forecasted. The US/China trade talks look like they will continue to try and reach a deal, which is also good news for stocks. The S&P hit an all-time closing high of 3,014.30 on July 15.

 

 

 

 

 

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