Happy Friday, Brian Manning here with the weekly update. Let’s get right to it. Monday this week we had Atlanta Fed president Raphael Bostic on CNBC, and they were interviewing him and he was just saying he’s not really worried about anything. Kind of seemingly out of touch, but it’s kind of interesting to see of a Fed voting member that’s not really too concerned about what’s going on the US economy. I don’t really know. Not many comments there.
Tuesday this week, we got housing starts. So this is measuring new construction homes being started, housing starts were down 10%. Expectation was that housing starts would be down 2%. And with looking at builder feedback, housing starts are down because they’re having significant problems with finding labor. And also 15% of homes across the country have had cement poured, but builders have had to stop there because they cannot find labor to continue in the construction process. So this is definitely curtailing supply.
Wednesday this week, and every Wednesday we get new unemployment claim filings. So we get to learn about how many new people file for unemployment for the first time and we had a number of 444,000, which is kind of a crazy number, because pre-pandemic we were averaging about 200,000 people per week. Right now, we have 8 million jobs available in the United States. So with 8 million jobs available in the US, why do we have 444,000 people filing for unemployment for the first time? I’m not really sure. You know, one of my guesses would be that the additional unemployment that people are receiving is maybe incentivizing people to stay at home and not go back to work, we certainly are seeing more and more states opting out of this additional kicker in unemployment and taking away the additional $300 per week, so kind of remains to be seen what the impact is going to be there from the states that are opting out, but something we definitely want to watch closely.
Also, Thursday this week, we got the Fed minutes. So anytime the Federal Reserve wraps up a two day meeting, they release their minutes, and we’re able to kind of dissect and see what the Federal Reserve talked about what’s shocking to see right now is that the Federal Reserve is just kind of confused, you know, one of their primary jobs and focus is to maintain and keep inflation under control. We’re starting to see inflation go up, we’ve talked about this in a lot of our videos in the past, but the Fed’s kind of been a pickle because, you know, the Fed raises rates, which they very clearly said they’re not going to do for quite a while, which I don’t think we’re going to do as well, that probably would positively impact mortgage rates as counter intuitive as it sounds. The other thing though, is the Federal Reserve is in the process of buying, every single weekend of every month, US treasuries and mortgage-backed securities. So they’re artificially keeping rates low. So when they’re the largest supplier of bonds going into the market, they’re now also the largest buyer of bonds flooding into the market as well. So at some point in time, and they are very much avoiding this conversation right now, the Federal Reserve starts to taper and that’s going to have an impact on rates as well. So we’ll have to wait and see what happens.
Today, we get existing home sales. Existing home sales were down 2.5%, this is really because inventory is so low. But what’s interesting is when we look at existing home sales in the year of 2021 to the year 2020 that’s really a very tough comparison because at this time in 2020, you know, there’s some serious lockdown taking place but if we did a comparison of existing home sales in the year of 2019 to the year 2021, existing home sales are actually up 11%. So we’re still seeing really positive movement in the housing market.
I’m around all weekend, if you have any questions let me know. I’d love to help you any way I can, call me on my cell phone, text me, 7 days a week, I’m available to help you out. Happy Friday, have a great day.