|10 year government bond yield||0.71%|
|30 year fixed rate mortgage||2.91%|
Stocks are higher as we begin the fourth quarter of 2020. Bonds and MBS are down.
Initial Jobless claims remain elevated at 840,000. Smaller businesses like restaurants and retailers are struggling to remain open. Separately, 118,800 job cuts were announced in September. Aside from the airlines, the other notable one was Disney.
Personal incomes fell 2.7% in August, which was a touch below expectations. Personal spending rose 1%. Inflation remains below the Fed’s target of 2%, which means rates are going nowhere.
Pending Home Sales rose 8.8% in August, and the index hit a record. “Tremendously low mortgage rates – below 3% – have again helped pending home sales climb in August,” said Lawrence Yun, NAR’s chief economist. “Additionally, the Fed intends to hold short-term fed funds rates near 0% for the foreseeable future, which should in the absence of inflationary pressure keep mortgage rates low, and that will undoubtedly aid homebuyers continuing to enter the marketplace. While I did very much expect the housing sector to be stable during the pandemic-induced economic shutdowns, I am pleasantly surprised to see the industry bounce back so strongly and so quickly.” Take a look at the chart below, the rebound in sales has been nothing short of remarkable.