Morning Report: Apartment financing conditions weaken

Vital Statistics:

S&P futures4,167-8.4
Oil (WTI)63.18-0.04
10 year government bond yield 1.6%
30 year fixed rate mortgage 3.17%

Stocks are flattish this morning as earnings season begins. Bonds and MBS are flat.

We should have a quiet week data-wise, with existing home sales and new home sales the only really important data. We won’t have any Fed speakers since we have a meeting next week.

According to the CDC, at least half of all adults have received at least one COVID-19 shot. Despite this good news, it looks like overseas countries are battling with a resurgence of cases.

The CFPB is taking aim at servicers. “We are very concerned and we’re watching closely…Our supervision team is robustly asking for more data than ever from servicers….We remain very concerned about a potential wave of borrowers seeking assistance after the emergency protections expire later this year, and we will use our regulatory, enforcement, and supervisory authorities to prevent avoidable foreclosures” said the CFPB spokeswoman.

Apartment market conditions appear to be tightening for the first time in a year and a half, according to the National Multifamily Housing Council. Interestingly, the debt financing conditions continued to weaken. I think this refers more to CMBS transactions, not 1-4 unit residential financing which is facing new caps from Fannie Mae. The CMBS market took some lumps last year as COVID-19 negatively affected many commercial real estate tenants. That might explain why Annaly jettisoned its CMBS portfolio recently.


Author: Brent Nyitray

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

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