Good Tuesday AM,

Everyone’s hurting right now. Stocks, bonds, crypto. Yuck. The 10-yr is at a pretty substantial yield of 1.52% as it represents a 50% retracement from the previous high yield. If we do not hold in here, we will see rates move another .125-.25%. We  are still searching for a bottom and until traders see a meaningful bounce, they will continue to sell. That will mean a solid morning that opens above the previous day’s high. We are not getting that today for sure.

Bloomberg shared that would-be homebuyers in the U.S. will have to save up for an extra year before taking the plunge, thanks to pandemic-era price gains. For the typical American, it would take eight years of stashing away 10% of monthly income to build up enough for a 20% down payment — up from seven years before Covid-19 ignited a homebuying frenzy, according to a study by Tomo.

Apparently part of the Federal job can come with perks of personal financial benefits. I am really not surprised by the fact, more so that it has come to light. In addition to last week’s bombshell where two Fed presidents were pushed to resign (Kaplan from Dallas and Rosengren from Boston) in the wake of news that they had been trading in securities for their own personal gain, having insight on the Fed monetary policy. The Fed Chairman shared today that these trades are now being reviewed for their legality. Additionally today, the WSJ shared that 131 Federal judges ruled over cases where they had a financial interest..

And something we will hear more of… an unexpected constituency is sounding the alarm on climate change: US mortgage bankers. Their predictions are dire: As climate change worsens and natural disasters wreak havoc on America’s housing stock, homeowners increasingly default on their mortgages. The ballooning financial losses force lenders to ratchet up interest rates. Fannie Mae and Freddie Mac, the massive government-backed companies charged with supporting affordable housing, continue issuing loans in risky areas, subsidizing homes in harm’s way. Private sector investors in the housing market back away from communities facing severe climate risks, like rising sea levels, repeated flooding, and more severe wildfires. The economic losses, which could easily number in the billions of dollars, are shouldered by the federal government — and ultimately taxpayers. 

That’s all according to a new report by the Research Institute for Housing America, a think tank founded by the Mortgage Bankers Association, a trade group representing the real estate finance industry. “Climate change will impact all governments, industries, and individuals,” the report notes. “Housing and housing finance will not be spared.”

Enough!

Please remain safe and healthy, make today great!