|10 year government bond yield||1.70%|
|30 year fixed rate mortgage||3.32%|
Stocks are closed today for Good Friday. Bonds and MBS are flat.
The economy added 916,000 jobs in March, according to BLS. The unemployment rate slipped from 6.2% to 6%. Average hourly earnings were down 0.2% MOM but up 4.2% on a YOY basis. The labor force participation rate ticked up 0.1% to 61.5%.
Looking at the Establishment Survey, 780k payrolls were in the private sector and 136k were in government. Leisure and hospitality added 280k jobs, while education / health added 101k. Construction jobs increased 110k.
On the Household side, the employment-to-population ratio ticked up from 57.6% to 57.8%. A year ago, the ratio was 59.9%. The employment population ratio is still lower than it was during the Great Recession, and the last time it was at this level was mid-1983, as the economy was coming out of the Volcker-driven recession of 1981-1982. In other words, the labor market still has a lot of work to do to get back to even a semblance of normalcy.
The Wall Street Journal has an article on how hard it is to get a mortgage loan if you have low credit scores. It pretty much glosses over the effect that forbearance has on lenders and is completely oblivious to the plight of servicers. FHA insurance reimbursements are particularly miserly, which is why FHA servicing basically became worthless last year. While FHA limited advancements to only four months, the servicer always has to eat the first two payments. So, those first two payments are generally going to be higher than the value of the servicing in the first place.
It also doesn’t mention the new high risk limits for loans going to Fan and Fred. The article postulates that as easy refi activity dries up, lenders will start moving lowering credit score requirements. Perhaps, but as long as forbearance and foreclosure moratoriums are in place, I think lenders will continue to avoid FHA.
Residential real estate brokerage company Compass went public yesterday, albeit in a scaled-back offering. The initial price talk was 36 million shares at a price of $23 to $26, however the company ended up selling 25 million at $18.50.