Good Tuesday AM,
A little bit of data out today.
Consumer confidence, which I think is a top tier report, came in higher than expected. People are encouraged. The Richmond Fed report, though, was dismal. Last we had a 7-yr treasury bond auction which flopped. The market should be selling off on the news and for a moment it did, but has since recovered. The 10-yr is down to 3.35% and if it gains some steam, we could push into the next trading channel.
Mortgage bonds are relatively flat on the day.
The bigger picture though is we are in the midst of strong resilience in bonds and a push toward lower yields. It is never going to be a straight line up or down and if we don’t break below 4.35% on the 10yr note, the likelihood is we sell off back to 4.65% before making more progress. I do see us breaking below 4.35% just not sure if it is on this push or the next… It is ok to float for now but know it could turn.
Breaking news from Fannie Mae and Freddie Mac…
For a 1-unit property in most areas in the U.S., the 2024 maximum baseline conforming loan limit value will be $766,550. The maximum loan limit value for a super conforming mortgage secured by a 1-unit property will be $1,149,825. We will be adjusting to this shortly.
File under… Painful
Divorced and separated couples are facing their worst nightmare: sharing a house with the person they want to get away from. Behind the uneasy arrangement is the housing market. Mortgage rates are over 7% and average home prices have hit record highs. This means more couples can’t afford to leave their home with its less than 3% mortgage interest rates and set up two different households. Renting isn’t always an option either given that rents have risen more than 9% over the last two years, Clare Ansberry writes.
But this I did not expect..
U.S. new-home sales fell in October as elevated mortgage rates weighed on the market. Sales slipped to an annual rate of 679,000 last month from 719,000 a month earlier, the Commerce Department said. Even so, new-home sales have proven much more resilient than existing-home sales since the Federal Reserve started lifting interest rates. Homeowners who locked in rock-bottom mortgage rates have been reluctant to sell, pushing more people into the smaller and more expensive new-home market.
But the monthly sales numbers aren’t the most interesting part of Monday’s report. Falling prices are. The median new-home price in October was down almost 18% from a year earlier–the largest annual decline on record. National Association of Home Builders Chief Economist Robert Dietz said builders are making smaller homes and using incentives to keep prices down.
That’s all for today!
Please remain safe and healthy, make today great.
