Good Friday AM,
UGH! Just what we didn’t want as bonds were rallying.
Non Farm payrolls 263K vs 200K
Unemployment Rate 3.7 vs 3.7
Avg Hourly Earnings Month Over Month 0.6 vs 0.3
News like today has a way of snapping traders out of their buying spell and begin to rethink their strategy. On the technical side, we should not be too surprised that the ten year touched the psychological 3.5% yield before bouncing back to 3.60% and currently settling back at 3.55%. Mortgage Bonds also bounced hard from their resistance level and were down 51bps but have since halved those losses. It is too soon to write this rally off entirely. There is still some bullish pressure on the price.
It is always a tale of two cities (economies). Strong jobs report (I have to think these gains are from people working two jobs) and then the other side of equation where it doesn’t look rosy at all. I am still bullish on rates!
First:
Recent job cuts at large U.S. companies mark a departure from the usual pattern of layoffs heading into a potential downturn: This time, white-collar workers have been among the first and hardest hit. Demand has fallen sharply for professionals in technology, legal, scientific and finance fields. Typically, in previous economic downturns, companies in capital-intensive industries—including mining, manufacturing and construction—were among the first to lay off workers.
And…
One sign rising prices are squeezing household budgets: The personal saving rate, a measure of how much money people have left over after spending and taxes, hit its lowest level since 2005.
Last, FHA released their new loan amounts for 2023.
Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2022-20, 2023 Nationwide Forward Mortgage Limits, which provides the maximum mortgage limits for FHA-insured Title II forward mortgages. These new loan limits are effective for case numbers assigned on or after January 1, 2023, through December 31, 2023.
FHA’s “floor” and “ceiling” loan limits will increase from $420,680 and $970,800 in Calendar Year (CY) 2022 to $472,030 and $1,089,300 [1] in CY 2023, respectively, for a one-unit property.
The following table lists the CY 2023 FHA loan limit thresholds for low-cost and high-cost areas:
| Property Size | Low-Cost Area “Floor” | High-Cost Area “Ceiling” |
| One Unit | $472,030 | $1,089,300 |
| Two Units | $604,400 | $1,394,775 |
| Three Units | $730,525 | $1,685,850 |
| Four Units | $907,900 | $2,095,200 |
Mortgagees may view the list of areas at the “ceiling” and areas with limits between the “floor” and “ceiling” — along with lists that can be sorted by state, county, or Metropolitan Statistical Area (MSA) or by calendar year — on the Maximum Mortgage Limits web page.
Please remain safe and stay healthy, enjoy the weekend and first, make today great!
