Happy Friday, Brian Manning here with the weekly update. Let’s get right to it.
So, Monday of this week, stocks went crazy because on Sunday, Pfizer came out with some news about a vaccine and stocks just went on a tear and just crushed it on Monday, Tuesday and Wednesday of this week. But kind-of by Thursday, I think stock markets started to realize like, wow, this is not as easy as we thought. Even though you have some great news from Pfizer in regards to a vaccine, you know, we don’t really have good proof of this yet the distribution is going to be difficult so I think, really, it’s all starting to settle in that yes, we all want great news in regards to a vaccine for COVID, but just because Pfizer says they have some good progress here, doesn’t mean that this is going to be released relatively quickly and there’s still some time in front us. So, you saw stocks just take off, they’ve been pretty consistent all week. And it’s just, kind of, irrational to see how they’re reacting but here we are.
Thursday this week, we get CPI. CPI is the consumer price index, this is a gauge of inflation. The CPI was relatively flat and looks like a lot of consumers were you know, fairly nervous in the month of October and spent less money and instead of seeing the CPI increase which we did for 4-5 months in a row, it just went flat, so the core rate was stripped of the volatile cost of food and energy and went from 1.7% to 1.6%. So it was good to see a little bit of calming down of inflation there because we talked about this in the past and inflation is just the enemy of interest rates. Also, rents on a year-over-year basis stayed flat on an annual increase of 2.7%. Overall, landlords are just relatively nervous right now, especially coming into the winter. with a spike in COVID cases and they’re just nervous about collecting their rents so you’re not seeing very strong rental increases there.
Also on Thursday, we got unemployment, so unemployment and new unemployment claims for the month of October where… I’m sorry, this is on a weekly basis. Unemployment claims for last week were at 709,000 people and that’s for new people filing for unemployment and then, continuing claims still sit at 6.8 million people so still, some high numbers, it’s good to see them come down a little but they’re still definitely well above where we were in pre-pandemic numbers. Also, don’t forget that we have the pandemic unemployment assistance so once you have run the course of unemployment, you can then re-apply for pandemic unemployment assistance and those numbers increase by 160,000. So, still seeing everything calm down a little bit but these numbers are still at record highs.
Today, a lot of media today about median home price. So median home price for the third quarter on a year-over-year basis was up 12%. I look at the media and they’re just all out there right now saying, oh my Gosh! Home prices are outpacing income 4 times by 4 times and it’s just not the case. Okay, so the median price of a home in America is $313,000. So what that means is that historically, half the homes sell above $313,000 and half the homes sell below a price of $313,000. Well, and that lower price range across America inventory is at an all time low. So you’re not getting as many sales that would normally take place that would nationally split the 50-50 there. So now what we’re seeing is less sales that took place below $313,000 and more sales that took place above the price range of $313,000 and because those numbers are off due to a lack of inventory it skews the numbers and it makes it look like the median home price is up 12% when really it’s not, it’s just a lack of inventory that’s causing less home sales to take place below $313,000 and more to take place above. I would not say it’s very accurate and be careful of how you interpret it in the media because it’s not really that correct.
Overall, we did see mortgage rates worsen a little bit this week when we got this news from Pfizer on Sunday and stocks took off. There was some impact in the bond market we saw mortgage rates worsen a little bit nothing horrible but we did see a little bit of an increase. We’ll have to wait and see what happens next week as far as rates are concerned, it’s so volatile right now that it’s really tough to predict.
I’m around all weekend, if you have any questions, let me know. I’d love to help you in any way I can if you want a re-approval, you want to run some numbers, call me on my cell-phone, text me. Hope you have a happy Friday the 13th and I’ll talk to you soon.