Friday Market Update: Week of July 10th

Happy Friday!

Brian Manning here with the weekly update, let’s get right to it.

So, Monday this week it was figured out that there’s $6.5 trillion worth of cash-out refinances that can still take place in the US and in the process of going through a cash-out refinance so the consumer could actually still lower their interest rate and make it worthwhile which is unbelievable so there’s still a tremendous amount of refinance businesses out there.

Tuesday this week we get information from CoreLogic and it’s on home appreciation across the United States for the month of May. On a month-over-month basis, homes appreciated up 7/10th of a percent, and on a year-over-year basis, homes appreciated up 4.8%, so still really great to see strong, housing data.

Wednesday of this week, as we do every single Wednesday we get Mortgage Bankers Association telling us about new applications, new purchase applications, so this is people applying for a mortgage to buy a home. On a week-over-week basis was up 5% and get this – on a year-over-year basis purchase applications are up 33%. Unbelievable to see, I know we’re seeing an uptick in purchase applications, all the realtors we’re working with are seeing an increase in buyers as well. You know we have to watch this, kind of wondering right now if it’s like
a spring they got wound up when everyone was in lockdown and now there’s pent up demand, and then, you know, just keeping it careful on it, on what will happen during the next couple of months and if we’ll see a little bit of a change there so we’ll keep an eye on that but 33% year-over-year is a really strong number.

Thursday this week we had a treasury auction so that means that there is an auction of bonds and this was met with really high demand, just goes to show you that overall investors are nervous right now, they’re very concerned about COVID, especially here in the United States with any potential shutdowns that could happen again and when investors are nervous, we talked about this in the past, they’re going to take their money and they’re going to invest it in bonds because a bond is a secure place to invest your money. That’s going to give you a guaranteed rate of return over time, well mortgage rates are the beneficiary of a lot of investing going in the bonds so we’re seeing mortgage rates come down this week as well, which is really great to see.

Also, every Thursday we get unemployment and jobless information. We got initial jobless claims, there’s 1.1, 3-4 million people last week that filed for new unemployment claims and as far as continuing claims, it’s something we talked about a lot lately as well, just under a million people came off of continually filing for unemployment. The thing we have to watch for, though, is that the
continuing claims are what’s called a lagging indicator so it’s slow, it’s behind what’s happening, so the concern is with other states seeing spikes in the virus and businesses shutting down, are they going to have new people filing for unemployment, they will then move into continually filing for unemployment, so you might see an increase of the continual claims here so, we got to watch this and just keep an eye on what’s happening with continuing claims because it is a lagging indicator.

Also this week, got a lot of traction was an article from ApartmentList, ApartmentList said that in July 32% of housing payments were missed you got to watch out what you read in the media, be very careful, it’s definitely a misleading article if you read into it. So one, a large portion of the payments that were missed were rentals, it wasn’t mortgages, and the way that their headline made it read was that on all housing payments. Number two is that they had that report that was pulled in the first of July, well mortgage payment was due from the first to the 15th. You don’t incur a late fee until the 16th of the month and you’re not considered late actually until the 30th of the month, so if you’re pulling a report on the 1st, and you’re considering those people late on their mortgage payments that’s a very inaccurate way to look at it, So you got to watch the media, read carefully between the lines because that report that they put out was just not good.

Friday, today, we still see the federal reserve actively buying bonds, a lot of mortgage back securities and the US treasury still forcing mortgage rates lower and lower and lower, really good to see. I’m around all weekend, if you have any questions, let me know. I’d love to help you in any way I can. Call my cell phone, text me, have a great day. Happy Friday.