Morning Report: Homeownership rises in the US

Vital Statistics:

 LastChange
S&P futures383113.3
Oil (WTI)55.370.74
10 year government bond yield 1.13%
30 year fixed rate mortgage 2.84%

Stocks are higher this morning as earnings continue to come in. Bonds and MBS are down.

The ADP Employment Report said that 174,000 jobs were created in January, which was above expectations. While the typical categories of professional services and healthcare added jobs, leisure and hospitality added 35,000 positions as well, which are desperately needed. “The labor market continues its slow recovery amid COVID-19 headwinds,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Although job losses were previously concentrated among small and midsized businesses, we are now seeing signs of the prolonged impact of the pandemic on large companies as well.”

Mortgage applications increased by 8.1% last week, according to the MBA. Refis increased by 10% while purchases were more or less flat. “After increasing for three consecutive weeks, the 30-year fixed mortgage rate dropped 3 basis points to 2.92 percent,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “The one-week reversal in the recent upswing in rates drove an increase in both conventional and government refinance activity, as borrowers continue to lock in these historically low rates.”

The homeownership rate increased 0.7% year-over-year to 65.8%, however it slipped compared to the third quarter of 2020. Rental vacancy rates were more or less unchanged at 6.4%. The huge jump in the homeownership rate during the second and third quarters is strange, and I am not sure what caused that.

Author: Brent Nyitray

In the physical sciences, knowledge is cumulative. In the financial markets, it is cyclical

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