Good Friday AM,
Housing starts and building permits came in a bit hotter than expected.
It is actually good news as we need more housing. There is limited market reaction to the data as we are holding onto the strong gains in bond prices (lower rates). It’s not a bad way to end the week. Next week may start off active but by Tuesday afternoon, trading desks will be abandoned and there is usually some increased volatility (to the downside) when that happens. I am not worried about the bond market but as always it is about timing. With next week being a short week and potentially seeing some leakage, and coming back from thanksgiving leaves only four days to the end of the month, it is not a bad idea to lock anything closing this month, today.
The average price of a home in the US is likely to post an increase of around 3-4% next year, according to House Buyers of America founder and CEO Nick Ron
If you want some insight to why the treasury-mortgage rate spreads are higher than normal, here you go…
Foreigners no longer have an insatiable appetite for U.S. government debt.
That’s bad news for Washington. The U.S. Treasury market is in the midst of major supply and demand changes. The Federal Reserve is shedding its portfolio at a rate of about $60 billion a month. Overseas buyers who were once important sources of demand—China and Japan in particular—have become less reliable lately. Meanwhile, supply has exploded. The U.S. Treasury has sold a net $2 trillion in new debt this year, a record when excluding the pandemic borrowing spree of 2020. “U.S. issuance is way up, and foreign demand hasn’t gone up,” said Brad Setser, senior fellow at the Council on Foreign Relations. “And in some key categories—notably Japan and China—they don’t seem likely to be net buyers going forward.
Gotta love the downward curve…
Mortgage rates have fallen for three straight weeks, after climbing toward 8% earlier this fall, and now stand at 7.44%. The decline offers a possible reprieve for the struggling housing market.
And… maybe some interesting commentary on the continuing evolution of housing.
Congrats, Your House Made You Rich. Now Sell It.
Forget the old slogan about there never being a better time to buy a home. For baby boomers, there might never be a better time to sell. The kids are gone, the stairs aren’t going to get easier to climb, and downsizing with home prices up so sharply since the pandemic could pad out those retirement savings. As an added bonus, it is easy to find ready buyers with so few homes on the market. The key? That boomers will need to beat the crowd.
Please remain safe and healthy, enjoy the weekend, first, make today great!