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Morning Report: Big week for housing data


Vital Statistics:

Stocks are higher this morning as investors focus on the Middle East. Bonds and MBS are down as investors fret about the hot CPI report last week. Many in the mortgage business will be at the MBA Annual in Philly.

The upcoming week will have a lot of housing data with housing starts, the NAHB Housing Market Index and existing home sales. We will also get industrial production and leading economic indicators. There will be plenty of Fed speakers with Jerome Powell speaking on Thursday.

The Biden Administration is talking about housing. Steps being taken include allowing FHA borrowers to count rental income from accessory units, new support for VA borrowers who become delinquent, expanded USDA loan access and updating 203k loans. The Administration might also want to address the alarming number of buybacks coming from Fannie and Freddie.

In my latest Substack post, I ask if we had a bubble in sovereign debt and compare the carnage in the bond market to the aftermath of the stock and real estate bubbles. Mohammed El-Arian said that this bond market is the worst in 150 years. Indeed, if you bought the 30 year Treasury in April of 2020, you would have lost 50% of your money at this point. Check it out and please consider subscribing.

Housing affordability is at an all-time low in the US. This is driving home sales to their lowest level since the real estate bust of 2008. Redfin forecasts existing home sales to come in at 4.1 million this year, the lowest level since 2008.

Given the rate-lock in effect, the only thing that can square the circle is increased building.

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Housing October 16th Weekly Update: Inventory increased 1.8% Week-over-week; Down 3.5% Year-over-year

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