Market Snapshot October 5, 2017

bright room

Good Thursday A.M.,

 

Bonds are under pressure this morning and we are testing the bottom of our trading range. The 10-yr is at 2.35% and mortgage bonds are -17bps. All of the news released this morning was unfriendly to bonds (Challenger job cuts, Unemployment claims, factory orders). Stocks are making new highs again and the moves in stocks and bonds are as a set up for tomorrow’s all important jobs report. Despite economic growth being limited, today’s move is understandable. Expectations for tomorrow’s jobs report only call for 100k new jobs created. That seems unreasonably low (as I would expect employment to be rebounding shortly with clean up and rehab efforts after the hurricanes) and with the bar set so low, it will not take a lot to beat it. If the print is 140k+, bonds will sell off. Odds favor locking now.

 

Some interesting insight in the Zillow Group Report on Consumer Housing Trends 2017. It shared that more than half of young buyers (53 percent) make multiple offers to buy their first home; only two in five millennials (39 percent) are able to make the recommended 20 percent or more down payment. The report said more than half of millennials (62 percent) shop for a rental while they’re looking to buy a home, indicating they accept the fact that buying a home is not a sure thing. They are more likely to say they struggled to find a home in their price range and on their time frame, and over one-third (37 percent) of millennial buyers say they went over their budget, compared to 29 percent of all buyers.

 

And according to Freddie Mac, the top 5 reasons we buy homes are:

  1. Gain more space – 66%
  2. Build equity – 36%
  3. Give Max or Bella (the most popular dog names in 2016, according to the American Kennel Club) more room and/or a yard – 33%
  4. Got/Getting married – 25%
  5. Had/Having a baby – 19%

 

Make today great!