Good Monday AM,

Again, the economic surprises keep coming and most of them have been bad for the economy. This morning we learned that Manufacturing missed expectations and construction spending was hammered! We simply cannot grow without construction leading the charge. Bonds have room to run. If the 10-yr Treasury can close with a yield below 1.20 for two days (and we are now down to 1.16%), the next stop on the ten year will be a test of 1% (YES!!!).  That said, remember that even an upward trending market has pullbacks. They are necessary for price increases to be sustained. The end of this week we will see the Non-Farm Payroll numbers. These can move markets so as we near Friday we need to consider locking.

Of no surprise, the Federal Housing Finance Agency and the Federal Housing Administration extended their eviction moratoria which was to expire yesterday, through Sept. 30 for foreclosed borrowers and other occupants. Kicking the can further down the road. There will need to be equal support for landlords as well as to prevent defaults. That is the challenge with stimulus. It is the stone rolling down the hill, picking up speed and no way to stop it until it hits the bottom. 

Here are some fantastic slides on demographics, cheap money, and affordability courtesy of Dan Rawitch. I would love to discuss them anytime you like.

The first shows (and I know this first hand) that kids are staying put in their parents homes longer and longer. When that pendulum switches, think about how much more housing supply we will need.

I do not know how anyone can calculate the cost of money from 5k years ago, so lets just focus on the last 50 yrs… this is unbelievable.

Yes, we do know that prices are going up faster than wages… but they are, as the last slide shows, still very affordable.

Bingo… let’s talk affordability.

Last, just as a comment on the state of the state, Portland, Ore., can’t find police for a unit to fight its rising murder rate. The city’s leaders are looking to combat an increasing homicide rate by resurrecting a police unit focused on gun violence. But after a year of growing tension within the department, they can’t find enough officers to join. 

Please remain safe and healthy, make today great!