Good Tuesday AM,

A little data out this AM. New home sales have stalled a bit. That is more about a lack of inventory which is more about a lack of building supplies and labor. The demand is there (why prices continue to go up). The Case Schiller report shared Home prices climbed over 15%, which is the biggest increase in 15 years. Consumer confidence also out today and retreated a bit. I would not be surprised if that number were to drop more over the coming months as stimulus wanes and people have to work AND pay bills. Bonds are up this morning on all of the news (stocks almost flat) and the ten-year is trying to break above a key resistance level. The MBS is nearing resistance so be careful.

The Mortgage Forbearance report showed that Re-Entries have climbed past 5%: Despite being in the 12th consecutive week of overall declines, this week’s forbearance data also includes worrisome trends as re-entries continue to rise (now above 5%) and 52% of borrowers are now beyond 12 months in forbearance, implying strain for certain segments.

Also, Richmond Fed President Tom Barkin had the mic this morning at the NC Chamber of Commerce and one of his comments does a good job of capturing the essence of a very hot topic.  In not so many words, Barkin said lower wage employees have increased aspirations for what they need to go back to work. In other words, we’re all still waiting to see what the labor market looks like when we can no longer lean on enhanced unemployment benefits as an explanation for what is still a very big chasm between pre-covid labor metrics and the current reality.  While we wait, markets seem disinclined to make any big bets. Is the uptick in inflation here to stay? The Fed continues to say no.

Last, if you are wondering where people are moving to, here is a great tool courtesy of Redfin. There won’t be many surprises on the big winners (and losers). Migration Housing Market Data – Redfin

Please remain safe and healthy, make today great!