Stocks are higher this morning as earnings season kicks off. Bonds and MBS are flat.
The Spring Selling Season got off to a rough start as existing home sales fell 3.6% in March. This was a 1% decline compared to last year. “March home sales remained sluggish and below last year’s pace,” said NAR Chief Economist Dr. Lawrence Yun. “Lower consumer confidence and softer job growth continue to hold back buyers.”
The median home price hit a record for the month of March, rising to $408,800. That said, wages are rising faster and mortgage rates are holding steady which means that affordability is improving. Days on market fell from 47 to 41. Again, it is a tale of two markets, with the hot markets from the COVID years experiencing a slowdown while the Northeast and Midwest seeing increased demand.
“Inventory remains a major constraint on the market,” Yun said. “The inventory-to-sales ratio, or supply-to-demand ratio, is below historical norms. An additional 300,000 to 500,000 homes for sale would help bring the market closer to normal conditions and allow consumers to make purchase decisions without feeling rushed.”
“Because inventory remains limited, the median home price rose to a new record high for the month of March,” Yun added. “That price growth has helped the typical homeowner accumulate $128,100 in housing wealth over the past six years.”
Small Business Optimism fell 3 points in March, according to the NFIB. Rising uncertainty drove the decline. Employment and compensation fell as did sales. Prices rose.
“The government reported 178,000 new jobs in March, but February and January were collectively down by almost as many jobs, and will likely be revised lower as have prior months. Federal government employment continued to fall but private job creation was a real positive, with 26,000 jobs in construction and 22,000 in transportation. Small business owners have plenty of job openings but are not optimistic about filling them with qualified workers, and some continue to struggle with finding applicants.
Inflation will become even more of a problem as oil prices respond to developments in the Iran conflict. Only a few ships are getting through Hormuz each day compared to well over 100 pre-war, slowing not only the supply of oil, but many other important products as well. The Federal Reserve is likely to stay steady now, but a rate hike becomes more likely if the current elevated inflation environment persists. The share of small business owners raising average selling prices has stabilized at rates that prevailed at the end of the last administration (CPI up 20% over 4 years). Lower oil prices will benefit all concerned, but that may take a while even after the Strait is reopen.”
JP Morgan reported a 17% increase in earnings per share on a YOY basis as we begin the first quarter earnings season. Revenues rose 10% while provisions for credit losses declined 24%. For all the fears about software exposure, it is interesting to see such a decline in loss provisions.
“The U.S. economy remained resilient in the quarter, with consumers still earning and spending and businesses still healthy. Several tailwinds are supporting this resiliency, including increased fiscal stimulus, the benefits of deregulation, AI-driven capital investment and the Fed’s asset purchases. At the same time, there is an increasingly complex set of risks— such as geopolitical tensions and wars, energy price volatility, trade uncertainty, large global fiscal deficits and elevated asset prices. While we cannot predict how these risks and uncertainties will ultimately play out, they are significant and they reinforce why we prepare the Firm for a wide range of environments.”
Mortgage origination volume rose 46% on a YOY basis to $13.7 billion. The servicing book was flat at $9.1 billion.
Loan Officers Wanted
SO YOU THINK YOU CAN SELL?
Put your talents to work at Ark Mortgage, a regional mortgage lender with an unmatched product line and excellent brand presence. Ark is looking for new Loan Officers for their existing branches and Sales Managers for new offices. Ark is licensed in NY, NJ, AZ, CA, CO, CT, FL, and TX.
Already licensed — Take it to the next level with a boutique lender that rewards ambitious professionals with hands-on operations support, artful marketing, and the industry’s highest commissions. The perfect place for motivated loan officers to grow their impact and their income.
Not licensed but ready to learn — Ark offers free, zero-to-sixty loan officer training for motivated individuals with a proven aptitude for outbound sales. This could be the start of a highly lucrative career with that pays top commissions, with premium operations support and powerful marketing tools.
