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Wednesday - September 21, 2022  

Existing Home Sales fell slightly in August from July and was the seventh straight monthly decline. Sales fell 0.4% to an annual rate of 4.80 million units versus 4.70 million expected. Sales were down 19.9% from a year ago. Sales rose slightly in the Northeast and West, flat in South and fell in the Midwest. The median sales price rose 7.7% from a year ago to $389,500. Unsold inventory is at 3.2 months, below the normal 6 months. All cash sales accounted for 24% of transactions in August, matching July and up from 22% in August 2021.

The Federal Open Market Committee meeting takes place today in D.C. where it is expected the members will hike the short-term Fed Funds Rate by 75bp, lifting the Fed Funds Rate in a range of 3.00 to 3.25%. Buckle up this afternoon. At 2:00 p.m. ET, the monetary policy statement will be released and is followed by Fed Chair Powell's press conference at 2:30. The Fed is walking a tightrope where it needs battle inflation with aggressive rate hikes but not so much as to push the U.S. into a recession.


Tuesday - September 20, 2022  

August Housing Starts unexpectedly jumped 12.2% from July to an annual rate of 1.575 million units versus 1.445 million expected. Total starts were nearly unchanged from a year ago. Single family starts were up 3.4% and were down 14.6% from a year ago. The big driver behind the gains was a near 29% monthly rise in multi-family dwellings. Building Permits, a sign of future construction, fell 10% monthly to an annual rate of 1.517 million units.

The recent spike in home borrowing costs in the past year that saw the 30-year fixed-rate mortgage to rise from 3% to 6% has seen many mortgage holders with rates below current levels. Redfin reports that 85% of homeowners with mortgages have a rate far below today’s level, a factor prompting many to stay put. "The plunge in new listings is hindering growth in housing supply, which is keeping home prices relatively high even though the market is slowing down,” said Redfin Deputy Chief Economist Taylor Marr. "Housing supply fell 1% in August from the month before; normally, it would rise during a downturn."


Monday - September 19, 2022 

The housing market is coming down to more normal levels of price gains with demand easing after the big rush to purchase homes soon after the pandemic appeared. The NAHB Housing Market Index fell to 46 this month, the ninth straight monthly loss. The three main components with the report, current sales conditions, sales expectations in the next six months and the traffic of prospective buyers all saw declines. "Buyer traffic is weak in many markets as more consumers remain on the sidelines due to high mortgage rates and home prices that are putting a new home purchase out of financial reach for many households," said NAHB Chairman Jerry Konter, a home builder and developer from Savannah, Ga.

The two-day Federal Open Market Committee meeting kicks off tomorrow and ends Wednesday with the release of the monetary policy statement at 2:00 p.m. ET. A 75bp rate hike is expected with a possibility of 100bp as the central bank tries to battle sustained high inflation. The Fed controls the short term Fed Funds Rate (FFR) which is the rate that financial institutions lend money to one another on an overnight basis. The current FFR is 2.50% and when adding three points, the Prime Rate is currently 5.50%.


Thursday - September 15, 2022  

Freddie Mac reports that home borrowing costs rose for the fourth straight week due in part to fears of aggressive rate hikes and sustained high inflation. The 30-year fixed rate mortgage rose to 6.02% this week from 5.89% last week with 0.8 in points and fees. A year ago the rate was 2.86%. The 30-year is above 6% for the first time since late 2008. The 15-year rose to 5.21% from 5.16% with 0.9 in points and fees. A year ago the rate was 2.21%. Sam Khater, Freddie Mac’s Chief Economist said, "Although the increase in rates will continue to dampen demand and put downward pressure on home prices, inventory remains inadequate. This indicates that while home price declines will likely continue, they should not be large."

In economic news, August Retail Sales were up 0.3% versus 0.2% expected and up from -0.4% in July, x-autos -0.3% vs 0.1% expected and down from 0.4%. Weekly Claims fell to 213,000 versus 226,000 expected. The September Philly Fed fell 9.9 versus a gain of 2.8 expected and down from 6.2 in August. The September New York State Empire Index came in -1.50 versus -13 expected and up from the dismal -31.30 in August.

Gas prices continued to decline this week after hitting record highs back in June. Motor club AAA reports that the national average price for a regular gallon of gasoline is at $3.69 down from $3.75 a week ago, from $3.95 a month, from $5 in June and up from $3.18 a year ago. AAA said although gasoline demand has decreased, fluctuating oil prices have led to smaller pump price decreases. If oil prices continue to rise, the national average will likely reverse as pump prices increase.


Wednesday - September 14, 2022  

After yesterday's hot CPI report that led to a crash in the stock markets, a fall in Mortgage Bond prices and a rise in yields, this morning's lower year-over-year headline and core wholesale inflation data, PPI, have provided a bounce in bond prices. August PPI fell 0.1%, inline and up from -0.4% in July, year over year 8.7% versus 8.8% and down from 9.8% in July. Core 0.4% versus 0.3% expected and from 0.3% in July, year over year 7.3% versus 7.1% down from 7.7% in July. So a bit cooler than expectations which calmed some of the fears.

Home borrowing costs increased in the MBA's latest survey hitting levels not seen since 2008. The 30-year fixed-rate mortgage rose to 6.01% from 5.94% with 0.76 points for the week ended September 9, 2022. Within the data, it showed that the Market Composite Index fell 1.2%, the Refinance Index lost 4% and the Purchase Index was essentially unchanged. Spokesperson Joel Kan said, "The 30-year fixed mortgage rate hit the 56% mark for the first time since 2008 - rising to 6.01% - which is essentially double what it was a year ago."


Tuesday - September 13, 2022  

Consumer prices remained near multi-decade highs which is putting a heavy burden on U.S. households. The August Consumer Price Index (CPI) rose 0.1% from unchanged in July and above the -0.1% expected. The year-over-year number was up 8.3% versus 8.1% expected though down from 8.5% in July. The more closely watched Core CPI, which strips out food and energy, jumped 0.6% versus 0.3% expected and double what was reported in July. Year over year, Core CPI rose 6.3% versus 6.1% expected and above 5.9% in July.

Digging further into the CPI numbers found that the food index increased 11.4% over the last year, the largest 12-month increase since the period ending May 1979. The energy index rose 23.8% over the past 12 months. The index for electricity rose 15.8%, the largest 12-month increase since the period ending August 1981. The CPI measures the change in prices paid by consumers for goods and services.

Mortgage credit availability declined in August according to the MBA. A decline indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The Mortgage Credit Availability Index (MCAI) fell 0.5% to 108.3 in August. The index was benchmarked to 100 in March 2012. “Mortgage credit availability declined slightly in August, as investors reduced their offerings of ARM and non-QM loan programs," said spokesperson Joel Kan.


Thursday - September 8, 2022  

Freddie Mac reports that home borrowing costs rose for the third straight week due in part to fears of aggressive rate hikes and sustained high inflation. The 30-year fixed rate mortgage rose to 5.89% from 5.66% last week with 0.7 in points and fees. A year ago the rate was 2.88%. The 15-year rose to 5.16% from 4.98% with 0.8 in points and fees. A year ago the rate was 2.19%. Sam Khater, Freddie Mac’s Chief Economist said, "Not only are mortgage rates rising but the dispersion of rates has increased, suggesting that borrowers can meaningfully benefit from shopping around for a better rate. Our research indicates that borrowers could save an average of $1,500 over the life of a loan by getting one additional rate quote and an average of about $3,000 if they get five quotes."

Americans filing for first-time unemployment benefits fell in the latest week as the labor market continues on an uneven path. Weekly Initial Jobless Claims fell 6,000 to 222,000, a three-month low, and below the 240,000 expected. The 4-week moving average was 233,000, a decrease of 7,500 from the previous week. Continuing claims came in at 1,473,000, an increase of 36,000 from the previous week. Currently, there are 11 million jobs available across the country with 5.5 people unemployed while the Unemployment Rate is low at 3.7%.


Wednesday - September 7, 2022  

Fannie Mae reports that high home prices and mortgage rates weighed on housing sentiment in its August Home Purchase Sentiment Index (HPSI). The HPSI decreased 0.8 points in August to 62.0, its sixth consecutive monthly decline. Housing will struggle with rates near current levels. Fannie Mae went on to say that the year-over-year jump in interest rates has amplified perceptions of unaffordability for buyers and ‘Lock-in Effect’ for sellers.

Mortgage rates rose again in the MBA's latest survey rising three weeks in a row. The 30-year fixed-rate mortgage rose to 5.94% from 5.80% with 0.79 points for the week ended September 2, 2022. Within the data, it showed that the Market Composite Index fell 0.8%, the Purchase Index was down 0.7% and the Refinance Index saw a 1.1% decline. Spokesperson Joel Kan said, "There is no sign of a rebound in purchase applications yet, but the robust job market and an increase in housing inventories should lead to an eventual increase in purchase activity."

Prices at the pump have been declining since the all-time high motorists saw in mid-June. Motor club AAA reports that the national average price for a regular gallon of gasoline fell to $3.76 this week due in part to lower oil prices, modest domestic gasoline demand and a quiet hurricane season. The price is down from $4.06 a month ago though up from $3.18 a year ago.


Tuesday - September 6, 2022  

Home price gains are beginning to cool off after the frothy increases seen in the past two years. CoreLogic reports that home prices, including distressed sales, rose 15.8% from July 2021 to July 2022, down from the 18.1% gain seen in June. Monthly, prices fell 0.3%. Looking ahead, prices are expected to rise by 0.3% from July 2022 to August 2022 and on a year-over-year basis by 3.8% from July 2022 to July 2023. "The higher cost of homeownership has clearly eroded affordability, as inflation-adjusted monthly mortgage expenses are now even higher than they were at their former peak in 2006," said Selma Hepp
Interim Lead, Deputy Chief Economist for CoreLogic. reports that for the first time days on the market grows for the first time in over two years. The company went on to report that in August, the typical U.S. home spent five more days on the market than last year, but still moved 22 days faster than the typical 2017-2019 pace. "For many of today's buyers, the uptick in for-sale home options is taking away the sense of urgency that they felt during the past two years, when inventory was scarce. As a result of this shift coupled with higher mortgage rates, competition continued to cool in August, with listing price trends indicating that home sellers are noticing shoppers tightening their purse strings," said Danielle Hale, Chief Economist for®.


Wednesday - August 31, 2022  

Mortgage rates surged in the MBA's latest survey and have been in a range the past few months. The 30-year fixed-rate mortgage rose to 5.80% from 5.65% with 0.71 points for the week ended August 19, 2022. Within the data, it showed that the Market Composite Index fell 3.7%, the Refinance Index lost 8% and the Purchase Index was down 2%. Spokesperson Joel Kan said, "Mortgage rates have been volatile over the past month, bouncing between 5.4% and 5.8%."

Job growth in the private sector rose in August but came in below expectations. The August ADP Private Payrolls Report came in at 132,000 versus the 288,000 expected. Year-over-year change in annual pay was 7.6% in August, in line with monthly readings since Spring 2022. “Our data suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy's conflicting signals,” said Nela Richardson, chief economist, ADP. “We could be at
an inflection point, from super-charged job gains to something more normal.

The U.S. economy contracted by 0.9% in the Q2 2022 (i.e., quarter-over-quarter performance expressed as an annualized result) on the heels of a 1.6% contraction in the Q1 2022. That's the 8th time the United States has suffered two or more consecutive down quarters since 1960, meeting one often-used definition of a recession. Officially, the United States has experienced nine recessions since 1960.


Monday - August 29, 2022  

Fed Chair Powell spoke on Friday and sent a chill over the stocks markets with the Dow falling over 1,000 points. "While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses," in Fed Chair Powell's prepared remarks. "These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain." The Dow, S&P and NASDAQ are lower as the week kicks off.

There are no economic reports due for release today but it's all about the jobs data this week with ADP on Wednesday and the Jobs Report on Friday, both for August. The July Jobs Report saw a gain of 528,000 new workers which was well above expectations. and after a two-month hiatus, ADP Private Payrolls will re-debut this week. Other reports will be the S&P Home Price Index, Weekly Claims and manufacturing.


Wednesday - August 24, 2022  

The housing market continues to revert back to more normal levels as rates rise and demand cools. The National Association of REALTORS reports that Pending Home Sales in July fell nearly 20% from a year ago and down 1.8% monthly from June. June saw an 8.9% loss. Sales have fallen 8 out of the nine last months. Sales fell in three of four major regions, with a small increase in the West. The Pending Home Sales Index is a forward-looking indicator of home sales based on contract signings. "In terms of the current housing cycle, we may be at or close to the bottom in contract signings," said NAR Chief Economist Lawrence Yun.

Mortgage rates surged in the MBA's latest survey and borrowing costs seem to be topping out near current levels. The 30-year fixed-rate mortgage rose to 5.65% from 5.45% with 0.68 points for the week ended August 19, 2022. Within the data, it showed that the Market Composite Index fell 1.2%, the Refinance Index lost 3% and the Purchase Index was down 1%. Spokesperson Joel Kan said, “Mortgage applications continued to remain at a 22-year low, held down by significantly reduced refinancing demand and weak home purchase activity."

Consumers continue to see some relief at the pump with gas prices falling after hitting record highs in June. The national average price for a regular gallon of gasoline fell to $3.88 this week from $4.36 a month though up from $3.15 a year ago. AAA finds that drivers are making significant changes to cope with high pump prices. In a recent survey, almost two-thirds of U.S. adults say they are are driving less and combining errands. Andrew Gross, AAA spokesperson said, "Now we need to keep an eye on the weather as hurricane season arrives. These storms can affect prices by disrupting oil production in the Gulf of Mexico and impacting large coastal refineries.”


Monday - August 22, 2022  

The housing market is starting to cool to more normal levels on both price and the huge demand due in part to higher borrowing costs and economic uncertainty. Redfin reports that July home sales fell 19% from July 2021 to lowest level since mid-2020. In addition, new listings were also lower as price growth eased. July home sales slid 4.1% from June, the sixth-straight monthly decline. "The buyers who are still in the game are finally getting a break from bidding wars, which means they can be picky," said Raleigh, NC Redfin agent Pam Lewis.

The Mortgage Bankers Association reports that July mortgage applications for new home purchases fell 16.1% from July 2021 and were down 7% monthly from June. The MBA estimate that new single-family home sales were running at an annual rate of 591,000 units in July 2022. "The slide in purchase applications for new homes – now down for the fourth consecutive month and 16 percent lower than a year ago – is consistent with data on declining homebuilder sentiment and slowing permitting activity for new construction," said spokesperson Joel Kan.

This week is risk event filled with the Fed's Jackson Hole Economic Symposium at the end of the week. And that comes after the report highly watched inflation reading Core PCE report which is the Fed's favorite inflation gauge. The Core PCE measures the cost of goods and services excluding food and energy. Several housing reports will be released along with the consumer Sentiment Index.


Monday - August 8, 2022  

Fannie Mae reports that consumer sentiment toward housing is at the lowest level in a decade. The Fannie Mae Home Purchase Sentiment Index fell 2.0 points in July to 62.8, its lowest level since 2011 and well below the all-time high set in 2019. Surveyed consumers continue to express pessimism about homebuying conditions, with only 17% of respondents reporting it’s a good time to buy a home. Meanwhile, the percentage of consumers believing it’s a good time to sell has begun ticking downward in recent months, falling from 76% in May to 67% in July.

Lower home prices, declining mortgage rates and more homes available on the market have increased demand for housing in July. Redfin reports that its Homebuyer Demand Index, a measure of requests for home tours and other home-buying services, increased seven points during the last week of July, and mortgage purchase applications were up for the first time in five weeks. "Homebuyers may catch a break this month as rates have come down nearly a point from the recent high on fears of a recession," said Redfin Deputy Chief Economist Taylor Marr. “There are deals to be had on some homes that have been sitting on the market with reduced prices. General economic uncertainty may continue to keep a lid on homebuyer demand and keep mortgage rates volatile, but the labor market remains a beacon of strength in the economy and the housing market in particular."

The closely watched inflation reading Consumer Price Index (CPI) will be released on Wednesday and the Producer Price Index for July on Thursday and will be closely watched for signs of improvement or even higher numbers. CPI is currently running at a 41-year high of 9.1% as prices for goods and services have surged over the past 12 months. The CPI is a measure of the average change over time in the prices paid by consumers for consumer goods and services.


Thursday - August 4, 2022  

Home borrowing costs fell this week and seem to be stabilizing after the surge in borrowing costs in the past 12 months. Freddie Mac reports that the 30-year fixed-rate mortgage fell to 4.99% from 5.30% last week with an average of 0.8 in points and fees. A year ago the rate was 2.77%. The 15-year declined to 4.26% from 4.58% last week with a 0.6 point. A year ago that 15-year was 2.10%. Sam Khater, Freddie Mac’s Chief Economist said, "Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth. The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment."

In the labor markets, Weekly Initial Jobless Claims rose to 260,000 in the latest week from 254,000 in th previous week. This week, the JOLTS report showed that there are 10.7 million jobs available across the nation, down from the recent number of 11.5 million as the job market is starting to flow. However, there are still 1.8 open jobs per available worker with almost 6 million Americans unemployed. Outplacement firm Challenger, Gray & Christmas reported this week that job cuts in July were up 37% from July 2021. “The job market remains tight, and large-scale layoffs have not begun. There are some indicators that hiring is slowing after months of growth, however,” said Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.


Wednesday - August 3, 2022  

Mortgage rates fell again in the MBA's latest survey though borrowing costs are up 44% from a year ago. The 30-year fixed-rate mortgage fell to 5.43% from 5.74% with 0.65 points for the week ended July 29, 2022. It was the largest one week drop since 2000. Within the data it showed that the Market Composite Index, a measure of total mortgage application volume, rose 1.2%, the Refinance Index increased 1.5% and the Purchase Index was up 1%. Spokesperson Joel Kan said, "Lower mortgage rates, combined with signs of more inventory coming to the market, could lead to a rebound in purchase activity."

The closely watched service sector of the U.S. economy remained positive in July as the sector grew for the 26th month in a row. The ISM Service Index rose to 56.7 last month versus the 53.5 expected and up from 55.3 in June. A reading above 50 indicates the services sector economy is generally expanding; below 50 percent indicates the services sector is generally contracting. 


Tuesday - August 2, 2022  

Home prices nationwide, including distressed sales, rose 18.3% in June 2022 from 2021, up monthly by 0.6% in June 2022 compared with May 2022. Looking ahead, home prices are expected to rise monthly by 0.6% from June 2022 to July 2022 and annually by 4.3% from June 2022 to June 2023. “Signs of a broader slowdown in the housing market are evident, as home price growth decelerated for the second consecutive month. This is in line with our previous expectations and given the notable cooling of buyer demand due to higher mortgage rates and the resulting increased cost of homeownership," said Selma Hepp, Interim Lead, Deputy Chief Economist for CoreLogic.

The New York Federal Reserve Bank reports that total household debt surpassed $16 trillion in Q2 2022. Mortgage balances rose by $207 billion in Q2 2022 and stood at $11.39 trillion at the end of June. Credit card balances also increased by $46 billion. Auto loan balances increased by $33 billion in Q2, while student loan balances were roughly unchanged from the first quarter and stand at $1.59 trillion. Other balances–which includes retail cards and other consumer loans –increased by a robust $25 billion. In total, non-housing balances grew by $103 billion, the largest increase seen since 2016.

Job openings across the country fell at the end of June but still remain well above levels of those Americans that are unemployed. There were 10.7 million open jobs available on the last day of June. The largest decreases in job openings were in retail trade, wholesale trade and in state and local government education (-62,000). There are still about 4.8 million people unemployed. That equals about 1.8 open jobs per available worker.

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