Happy Friday, Brian Manning here with your snowy Friday update. My gosh, I’ve never been more ready for bathing suits and flip flops, but spring is relentless in Colorado and here we go.
Let’s see… Monday this week looking at some inflationary news. We got the CPI, that’s the consumer price index. We’ve talked about this a bunch in the past and specifically looking at the core rate. So the core rate strips out volatile items such as food and energy on a month over month basis, which is up 3/10%. And on a year over year basis, it went from 1.3% to 1.6%. So kind of like we talked about in the past, moving into May, June, July, August, we are going to see some inflationary pressures here and the reason why is when we’re looking at a comparison on a year basis, we’re going to start removing data that we had last year, and this time last year was in full COVID lockdown, not a lot of spending taken place, so we’re definitely going to see some inflationary data. It’s going to put some pressure here, but we’ll likely ease towards the end of the year. Usually the CPI report would have really crushed interest rates, but on Monday, we also had Johnson and Johnson, with the CDC and the FDA suggesting a pause, so that definitely very much overshadowed the CPI news because investors were nervous that potentially this pause in this third vaccine would hold… or not hold but really slow down economic recovery as we go forward. So not as impactful as the CPI could have been.
Thursday of this week., we got initial jobless claims. Initial jobless claims down 200,000. So really great to see less people filing for new employment claims. We also got retail sales. On a month-over-month basis, retail sales were up 10%. So just a really strong report. In that, a couple components of it, restaurants were up 13%. So great to see restaurants really starting to come back, God knows we really need it. And we also had clothing. Clothing was up 18%. So people just kind of getting back out and shopping again.
Today we get some news on… let’s see… First time home buyer tax credit. So there’s some info floating around to the Biden administration, that would be a $25,000 first time home buyer tax credit. I can’t say I’m the biggest fan of it, we’ll have to wait and see what happens. Just to clarify, I’m a huge fan of first time home buyers. We’ve helped tons of first time home buyers over my time of being a mortgage lender. Whether it’s FHA loan money down, down payment assistance, etc. The challenge that we have is that inventory is already extremely low. So if you throw another pool of additional first time home buyers on top, it’s just going to create even more of a bidding war, which is going to be more of a struggle in the housing market.
If we look at some of the details of the tax credit, and we would have to wait and see what happens because, of course, nothing is formal right now. The interesting part is that it would be for what’s called a first generation home buyer. So that would mean someone who is a first time home buyer but also their parents didn’t own a home as well. So I’m not really sure how many people would qualify for this, we’ll have to wait and see. We also got some new construction data for housing starts, this was new home starts. That was up 20% on a month-over-month basis. So new construction is on fire. And also home buyer traffic into new construction housing divisions is at the highest level since November. So new construction doing really well and just really looking forward to seeing a strong housing market there. Now, let’s take a look at the charts really quickly because we have a little bit of movement in the 10-year treasury. And what I want to look at is, you know, we kind of had this really strong increase in the yield on the 10-year treasury and like we’ve talked about in the past, you know, this is not exactly what mortgage rates do, mortgage rates kind of go on the same general path at what they’re doing and it was nice to see a little bit of a reprieve in the 10-year treasury. So what’s interesting right now is today, we’re now right kind of in the middle of these two, this ceiling of support and this floor of support. So, you know, we have to wait and see what happens with the 10-year treasury but it has been nice to see a little bit of a reprieve here, which means we’ve seen a little bit of reprieve and interest rates coming back down here as well. So we’ll keep an eye on this and next week, we’ll give you another update here as well.
I’m around all weekend. If you have any questions, let me know. I’d love to help you any way I can. Happy Friday. Have a great day.