Morning Report: Adverse Market fee delayed until December

Vital Statistics:

 

Last Change
S&P futures 3446 2.6
Oil (WTI) 43.54 0.87
10 year government bond yield 0.71%
30 year fixed rate mortgage 2.94%

 

Stocks are flat this morning as Hurricane Laura is expected to make landfall sometime tonight. Bonds and MBS are flat.

 

The FHFA delayed the 50 basis point adverse market fee until December 1. It also carved out refinances below $125,000. From the press release: “The fee is necessary to cover projected COVID-19 losses of at least $6 billion at the Enterprises. Specifically, the actions taken by the Enterprises during the pandemic to protect renters and borrowers are conservatively projected to cost the Enterprises at least $6 billion and could be higher depending on the path of the economic recovery.” Now the big question will be whether the aggregators remove the fee or keep it in their rate sheets. Quicken and PennyMac have already. Here is the MBA’s take on it.

 

Mortgage applications fell by 6.5% last week as purchases increased by 0.4% and refis decreased by 10%. “Mortgage rates were mixed last week, but the rates for 30-year fixed mortgages and 15-year fixed mortgages declined,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Despite the lower rates, conventional refinance applications fell 11 percent and government refinance applications fell 6 percent, which pushed the total refinance index to its lowest weekly level since July.” Rates had been ticking up for a while, with the 10 year bond stuck around 70 basis points.

 

Luxury homebuilder Toll Brothers reported earnings yesterday. Sales revenue fell due to the pandemic, but orders were up 23% in units and 18% in dollar value. The $2.21 billion in new contracts was a record third quarter (they have an October fiscal) for the company.

 

Consumer confidence declined in August as expectations of a quick economic recovery were quashed. “Consumer Confidence declined in August for the second consecutive month,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Present Situation Index decreased sharply, with consumers stating that both business and employment conditions had deteriorated over the past month. Consumers’ optimism about the short-term outlook, and their financial prospects, also declined and continues on a downward path. Consumer spending has rebounded in recent months but increasing concerns amongst consumers about the economic outlook and their financial well-being will likely cause spending to cool in the months ahead.”

 

Durable Goods orders rose 11.2% in July, which was much higher than expectations. Ex-transportation orders rose 2.4% and core capital goods orders (a proxy for capital expenditures) rose 1.9%.

Morning Report: Housing starts jump

Vital Statistics:

 

Last Change
S&P futures 3384 6.6
Oil (WTI) 42.24 0.52
10 year government bond yield 0.68%
30 year fixed rate mortgage 2.93%

 

Stocks are higher this morning on strong numbers out of WalMart and the Home Despot. Bonds and MBS are up small.

 

It looks like we are getting bipartisan push-back against the 50 basis point adverse market fee. Trump criticized the fee, and we have a chorus of Democrats opposed to it as well. It seems like no one is actually supporting this move. This is as just about every industry group lines up against it as well.

 

Housing starts increased to a seasonally-adjusted annual rate of 1.5 million in July, which is a 23% increase from a year ago. Building permits came in at 1.5 million as well, which is a 9% increase from last year. Certainly the COVID-related pause is over, and we are approaching the highs of earlier this year.

housing starts

 

Mortgage delinquencies increased to 8.2% in the second quarter, compared to 4.4% in the first quarter and 4.5% a year ago.

The COVID-19 pandemic’s effects on some homeowners’ ability to make their mortgage payments could not be more apparent,” said Marina Walsh, MBA Vice President of Industry Analysis. “The nearly 4 percentage point jump in the delinquency rate was the biggest quarterly rise in the history of MBA’s survey. The second quarter results also mark the highest overall delinquency rate in nine years, and a survey-high delinquency rate for FHA loans.

The conventional delinquency rate rose to 6.7% while the FHA delinquency rate rose to 15.7%, the highest rate since the survey began in the late 70s. DQs spiked in NY, NJ, FL, NV, and HI.

 

The number of loans in forbearance decreased to 7.2% last week, according to the MBA. Interesting data point on non-QM: big NQM investor MFA Financial said that roughly a third of its non-QM portfolio was in forbearance (though many were still paying). Ginnie remains a rough spot, with 9.5% in forbearance, and that doesn’t include the Ginnie loans which have been bought out of pools.

 

 

Morning Report: Builder sentiment close to record highs

Vital Statistics:

 

Last Change
S&P futures 3377 16.6
Oil (WTI) 42.64 0.02
10 year government bond yield 0.69%
30 year fixed rate mortgage 2.95%

 

Stocks are higher this morning on no real news. Bonds and MBS are up small.

 

The MBA is pushing Congress to rescind the “adverse market refinance fee,” which is the 50 basis point increase announced by the GSEs last week.

Requiring Fannie Mae and Freddie Mac to charge a 0.5% fee on refinance mortgages they purchase will raise interest rates on families trying to make ends meet in these challenging times,” Killmer said. “This means the average consumer will be paying $1,400 more than they otherwise would have paid. Even worse, the September 1 effective date means that thousands of borrowers who did not lock in their rates could face unanticipated cost increases just days from closing.

As many have pointed out, the irony of the Fed pushing down mortgage rates by buying mortgage backed securities in the market versus FHFA trying to raise mortgage rates via the fee is striking.

 

There isn’t a lot of market-moving data this week, although we have a good amount of housing data with the NAHB Housing Market Index, Existing Homes Sales, and Housing starts.

 

Homebuilder Sentiment is close to record highs, according to the NAHB. The index rose to 78 in August from 72. 50 is considered neutral. Take a look at the chart below, it looks like we are pretty much at the record highs of the late 90s. Those highs were then followed by a 50% jump in housing starts.

NAHB HMI

 

Home prices are rising across the board, but rural properties are seeing the biggest increases, rising 11%.

We’ve been speculating about increasing interest in the suburbs and rural areas since the start of the pandemic,” said Redfin economist Taylor Marr. “Now we’re seeing concrete evidence that rural and suburban neighborhoods are more attractive to homebuyers than the city, partly because working from home means commute times are no longer a major factor for some people. And due to historically low mortgage rates, interest is turning into action. There will always be buyers who choose the city because their jobs don’t allow for remote work or they place a premium on cultural amenities like restaurants and bars—which will eventually come back—but right now the pendulum is swinging toward farther-flung places.

Redfin rural prices

 

New Home purchase applications are up 39% YOY, according to the MBA. That said, the COVID-19 pandemic has wreaked havoc with seasonal adjustments, so that number could be overstated.

Morning Report: The FOMC meets

Vital Statistics:

 

Last Change
S&P futures 322 -10.6
Oil (WTI) 41.45 -0.12
10 year government bond yield 0.6%
30 year fixed rate mortgage 2.98%

 

Stocks are lower this morning as the FOMC meeting begins. Bonds and MBS are flat.

 

The FOMC meeting begins today, and we will get the announcement tomorrow. The Fed is considering the idea of basically controlling the entire yield curve, which means it essentially sets interest rates by diktat. The Fed is reaching into its historical toolbox and returning to the Truman Administration, where the Fed pushed down rates to limit the government’s borrowing costs. Japan has experimented with the same policy. Note that the rest of the world more or less relies on the 10 year US bond yield to determine the correct price of risk, and taking that number out of the hands of the market is playing with fire. IMO, we have a sovereign debt bubble of epic proportions, with negative yields all over the globe. Like all bubbles, this one will probably blow up too, once inflation returns. I have no idea what it will look like, but I can almost assure you that politicians, the media, and academia will blame the free market and not a bunch of academics sitting in a room trying to manipulate the price of money the way the Soviets manipulated the price of corn, tractors or gasoline.

 

Durable Goods orders rose 7.3% last month, which was higher than expectations. Core Capital Goods orders (kind of a proxy for business capital expenditures) rose 3.3%.

 

The MBA reported that the share of loans in forbearance fell for the 6th straight week. Reported loans in forbearance decreased by 6 basis points to 7.74%, or about 3.9 million homeowners. Ginnie loans ticked up, while Fannie / Freddie loans fell.

 

The Senate GOP has released their $1 trillion coronavirus relief proposal, which will include another $1,200 payment to individuals, more payroll protection money, but a reduction in the additional unemployment benefits from $600 a week to $200 a week. Democrats are complaining about the drop in unemployment benefits. The increased benefits will probably get get reinstated to get enough support to get it through the House. Both parties realize that as we approach the election, it will get harder to pass anything.

 

New COVID cases are slowing in Arizona, Texas and Florida.

 

Homebuilder D.R. Horton reported a 10% increase in revenues for the quarter ended June 30. Net orders were up 38% in units. Orders were up 50% year-over-year in May and June. Note D.R. Horton has a lot of Texas exposure, which is seeing an increase in COVID cases.

The Company believes the increase in demand since May has been fueled by increased buyer urgency due to lower interest rates on mortgage loans, the limited supply of homes at affordable price points across most of the Company’s markets, and to some extent the lower levels of home sales from mid-March through early April which caused some pent-up demand.

D.R. Horton stock is up 4% pre-open

 

We saw similar order growth for MDC Holdings as well. Orders increased 5% in the June quarter and were up 53% in the month of June.

Our results this quarter reflect the favorable industry dynamics in place today, including a low interest rate environment, a lack of available supply and a highly motivated buyer. They also reflect our continued shift in focus to the more affordable segments of the market and the benefits of our build-to-order strategy, which caters to the wants and needs of a large segment of the buying population. We believe that providing homebuyers with flexibility and choice at an affordable price is a winning strategy for our company. Given the favorable market conditions we are experiencing, we now believe that we may achieve as many as 8,000 home deliveries for the 2020 full year, which would be a 15% increase from the prior year.

MDC stock is trading up 6% pre-open.

Morning Report: Existing Home Sales jump

Vital Statistics:

 

Last Change
S&P futures 3285 5.1
Oil (WTI) 41.84 -0.22
10 year government bond yield 0.59%
30 year fixed rate mortgage 3.02%

 

Stocks are flattish as earnings continue to pile in. Bonds and MBS are flat.

 

Initial Jobless Claims increased last week as we saw a wave of new COVID-10 cases. New claims increased from 1.3MM to 1.4MM

 

Despite the new COVID fears, the housing recovery is in full swing. Existing home sales rose 21% in June, to an annualized pace of 4.72 million. according to NAR. This is still down 11% on a YOY basis, but we are getting a lot of data points that show a meaningful recovery.

“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” said Lawrence Yun, NAR’s chief economist. “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”

The median home price rose 3.5% YOY to $295,300, while inventory is at 4 months’ worth. The first time homebuyer percentage is approaching normalcy, at 35%. Historically it has been closer to 40%.

 

Speaking of housing, homebuilder Meritage Homes reported second quarter numbers yesterday. Orders increased 32% year-over-year. May and June were record selling months for the company, which focuses on entry-level homebuyers.

“Demand for new homes is being driven by historically low mortgage interest rates, a shortage of used homes for sale, and an increased need for homes that can accommodate entire families working from home more than ever before. Many of those families are choosing safe suburban communities rather than crowded urban centers and many often prefer to purchase a home virtually rather than physically,” he explained. “That is exactly what Meritage offers. 100% of our communities are open for both in-person and virtual sales, and our virtual selling capabilities have been very beneficial. More than half of our communities are designed for the entry-level market with a wide selection of affordable homes ready for quick move-in, while our streamlined design selection process in Studio M  allows first move-up customers to move quickly into a new home.”

The company took up guidance for full year earnings to about $9 bucks a share, when the Street was looking for about $6.

 

A record number of people are leaving the expensive urban areas to move to cheaper locations with more outdoor space and better weather. Phoenix, Sacramento, Austin, and Las Vegas are growing, while buyers flee New York City, Los Angeles and Sacramento. The subtext to all of this is remote working, which is a game-changer. From one realtor:

“We’re seeing tons of interest from clients moving to Austin from major cities on both coasts, particularly tech workers,” Vallejo said. “Buyers who have discovered they don’t love being quarantined in an apartment building in San Francisco or New York and can work remotely are looking for a house, and they can afford that here in Austin. I have a client moving from the Bay Area who just closed on a home site unseen, and another client from Portland who is in the process of buying a home here.”

 

Democrats are promoting a bill that would prohibit the GSEs and Ginnie Mae from charging fees for forbearances. Fannie and Fred introduced the idea of adding big LLPAs for loans in forbearance. The unintended consequence of forbearance has been a tightening of credit, particularly for government lending. Part of this is due to low or even negative servicing values for FHA and VA loans.

 

Home sellers are reaping gains of almost $76k according to ATTOM Data Solutions. Taking into account time held, this represents a return of 36% compared to the original purchase price. Of course if you take into account the equity you actually contributed, it is probably much higher.

Morning Report: KB Home misses earnings

Vital Statistics:

 

Last Change
S&P futures 3039 -13.1
Oil (WTI) 37.84 -0.49
10 year government bond yield 0.66%
30 year fixed rate mortgage 3.16%

 

Stocks are lower this morning on an increase in COVID cases in states like AZ and TX. Bonds and MBS are up.

 

Initial Jobless Claims were more or less flat at 1.5 million last week.

 

The third estimate for first quarter GDP came in at -5%, more or less in line with estimates. The price index (inflation) came in at 1.4%, which is lower than the Fed’s target.

 

The MBA is urging FHFA to expand access to the Federal Home Loan Banking network, by allowing REITs and independent mortgage banks to borrow from the FHLB. The FHLB provides longer-term financing at competitive rates. The collapse in the jumbo and non-QM market was directly related to mortgage REITs which funded their balance sheets with repurchase agreements and had to sell paper / stop buying when the margin calls came in March and April. It isn’t a panacea (some REITs with FHLB loans still were forced to deleverage) however it would have mitigated the collapse at least somewhat. Giving the independent mortgage banks access would make them more stable as well.

 

Homebuilder KB Home reported earnings yesterday. Earnings per share beat the Street, but revenues and orders disappointed the Street and sent the stock down 13% on the open. “The prolonged stay-at-home public health orders, resulting economic shutdown and our conservative approach to navigating the uncertain environment significantly impacted our orders during the quarter. However, following a low point in April, we are very encouraged by the resilience of housing market demand. We experienced steady and significant improvement in our order trends beginning in May, which was further fueled by welcoming walk-in traffic to our communities. This improvement has accelerated dramatically in the first three weeks of June during which time we have achieved a modestly positive year-over-year comparison, as orders have returned to more normalized levels,” concluded [KB Home CEO] Jeffrey Mezger. Orders fell 4% in March, 59% in April, and 42% in May. For the first 3 weeks of June, orders were up 4%. Still demand for housing remains robust.

 

Treasury is considering delaying Tax Day past July 15. “As of now, we’re not intending on doing that, but it is something that we may consider,” Treasury Secretary Steve Mnuchin said in a June 23 interview at the Bloomberg Invest Global 2020 virtual summit. He said he was considering another delay to Sept. 15.

Morning Report: New Home Sales rise

Vital Statistics:

 

Last Change
S&P futures 3099 -19.1
Oil (WTI) 39.94 -0.49
10 year government bond yield 0.71%
30 year fixed rate mortgage 3.16%

 

Stocks are lower this morning as COVID cases increase. Bonds and MBS are up small.

 

Mortgage Applications decreased 8.7% last week as purchases decreased 3% and refis fell 12%. “Refinance applications dropped to their lowest level in three weeks, but the index remained 76 percent higher than a year ago,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Despite the decline last week, MBA still anticipates refinance originations to increase to $1.35 trillion in 2020 – the highest level since 2012.” There has chatter in the market that originators are backing off on their pricing as they are inundated with files.

 

New Home sales increased 13% compared to a year ago to 676,000. This is up 17% on a month-over-month basis. From what we have been hearing from the homebuilders, demand is robust. Note that KB Home reports after the close today. Note that the builders are not cutting prices either.

 

Home prices rose 0.2% MOM in April, and are up 5.5% YOY, according to the FHFA House Price Index. “U.S. house prices posted another positive monthly increase in April,” according to Dr. Lynn Fisher, Deputy Director of the Division of Research and Statistics at FHFA. “Regionally, results varied. Two of the usually stronger growth areas, the Mountain and Pacific divisions, were flat over the month but other divisions continued to experience strong price appreciation even with all of the COVID-19 challenges. Both the New England and South Atlantic regions saw monthly decreases in prices, but all divisions posted positive year over year growth of at least 5 percent. The number of
transactions used to estimate the HPI were slightly down from March to April but were still a robust sample. We expect the normal spring bump in sales was pushed off by the COVID-19 shutdowns and may extend into the summer months as states reopen and real estate sales pick back up.”

 

The National Multifamily Housing Council reported that 92.2% of tenants paid their June rent as of 6/20. “With the support of expanded unemployment benefits, stimulus funds and significant efforts by apartment community owners and operators to help residents impacted by the outbreak of COVID-19 and resulting financial hardships, it seem most renters were once again able to meet their obligations,” said Doug Bibby, NMHC President. “The early steps taken by lawmakers have proven critical to keeping many safely and securely housed. As we move forward and the economy begins to recover, it will be vitally important that lawmakers continue to support the nation’s renters and forestall even greater economic harm.”

 

 

Morning Report: Lennar reports a huge turnaround in May

Vital Statistics:

 

Last Change
S&P futures 3126 4.1
Oil (WTI) 37.94 -0.39
10 year government bond yield 0.75%
30 year fixed rate mortgage 3.16%

 

Stocks are flattish this morning on no real news. Bonds and MBS are up.

 

Initial Jobless Claims came in a little higher than expected – 1.5 million versus 1.3 million expected. Meanwhile, the Philly Fed survey was way stronger than expected.

 

The Conference Board Index of Leading Economic Indicators improved 2.8% in May versus the Street expectation of 2.3%. “In May, the US LEI showed a partial recovery from its sharp decline over the previous three months, as economic activity began to pick up again,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “The relative improvement in unemployment insurance claims is responsible for about two-thirds of the gain in the index. The improvements in labor markets, housing permits, and stock prices also buoyed the LEI, but new orders in manufacturing, consumers’ outlook on the economy, and the Leading Credit Index™ still point to weak economic conditions. The breadth and depth of the decline in the LEI between February and April suggest the economy at large will remain in recession territory in the near term.”

 

Homebuyer mortgage demand spiked to an 11-year high. “The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence,” said MBA economist Joel Kan.

 

Homebuilder Lennar reported better than expected earnings and re-introduced its guidance for the year. On the conference call, the company talked about how the markets turned around in May:

In May, our new orders increased each week sequentially and were up 7% over the prior year. Our cancellation rate in May also dropped from 18% — dropped to 18% from the 23% high in April. More importantly, our increase in sales was generally achieved while raising prices and reducing incentives throughout the month of May. We rarely comment on sales activity outside of the quarter we are reporting. However, given these fluid market dynamics, I will give you some insight on June. For the first two weeks of June, our new orders were up 20% over the same period last year. 

Now some of that might be catch-up from the March and April weakness, but it does point to a robust homebuilding market, certainly better than yesterday’s housing starts number would suggest.

 

The FHFA extended the eviction moratorium until August 31.

 

 

Morning Report: MFA Financial describes the chaos in the MBS market in late March

Vital Statistics:

 

Last Change
S&P futures 3126 4.1
Oil (WTI) 37.94 -0.39
10 year government bond yield 0.75%
30 year fixed rate mortgage 3.16%

 

Stocks are higher this morning on no real news. Bonds and MBS are flat.

 

Housing starts rose 4% MOM in May to 974,000. This is still 23% below last year. Building Permits rose 14% MOM but are down 9% YOY. Shelter-in-place orders were still in force for most of the country in May. Despite the drop in May, homebuilder confidence rebounded in June.

 

Jerome Powell heads to Capitol Hill for his second day of Humphrey-Hawkins testimony. Powell was cautious yesterday about how quickly jobs would come back. That said, investors ignored him, pushing stocks higher. Note that the Fed was consistently over-optimistic about the economy during the Obama Administration and has been consistently over-pessimistic about the economy during the Trump Administration. Note the COVID epidemic has swelled the Fed’s balance sheet even more. The Fed now holds $7.2 trillion in assets. Before the Great Recession, it held about $800B.

 

Fed assets

 

Mortgage REIT MFA Financial reported earnings yesterday. On the conference call, the company talked about how bad things got in the MBS market in late March:

January, February and the first two weeks of March were very normal and a good start to the new year. And in only a few days, the financial markets and the mortgage market in particular completely collapsed. With the onset of the COVID-19 pandemic, pricing dislocations for markets and residential mortgage assets was so extreme that liquidity evaporated. Prices of legacy non-agencies, which had not changed by more than 3 points in the last two to three years, were suddenly lower by 20 points. CRT securities dropped as much as 20 points to 50 points and MSR-related asset prices were lower by 20 points to 30 points, all in a few days. MFA received almost $800 million in margin calls during the weeks of March 16 and March 23 and over $600 million of these were on mortgage-backed securities. In contrast, we received $7 million of margin calls on these portfolios during the entire week of March 2 and $37 million during the week of March 9. And during the months of December, January, and February, we received a total of six margin calls, all related to factor changes with a total aggregate amount of $4 million.

MFA received almost $800 million in margin calls, and entered the year with about $70 million in unrestricted cash. This was the dislocation in the market that caused the Fed to react so aggressively to support the MBS market. Of course they almost killed the smaller originators and TBA brokers in the process….

 

Mortgage Applications increased 8% last week as purchases rose 4% and refis increased 10%. “The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Mortgage rates dropped to another record low in MBA’s survey, leading to a 10 percent surge in refinance applications. Refinancing continues to support households’ finances, as homeowners who refinance are able to gain savings on their monthly mortgage payments in a still-uncertain period of the economic recovery.”

Morning Report: Homebuilding is back

Vital Statistics:

 

Last Change
S&P futures 3141 74.1
Oil (WTI) 38.34 1.39
10 year government bond yield 0.78%
30 year fixed rate mortgage 3.16%

 

Green on the screen this morning as Jerome Powell heads to Capitol Hill for Humprey-Hawkins testimony. Bonds and MBS are down.

 

Retail Sales came in way better than expected, rising 17.7% versus expectations of a 8% gain. Last month was revised from -16.4% to -14.7%. The control group, which excludes gas, autos, and building materials rose 11% versus expectations of a 4.7% increase.

 

Industrial production rose 1.4% in May, a little better than expected. Capacity Utilization rose to 64.8% and manufacturing output rose 3.8%.

 

Lennar reported second quarter earnings yesterday, with a 27% increase in earnings per share. Lennar is on a November fiscal year, so the quarter included both March and April, the worst months of the economic pandemic. That said, everything turned around in May, with CEO Stuart Miller saying this in the press release: “Business rebounded significantly in May, and by quarter’s end, our total new orders declined by only 10%, and deliveries ended flat year-over-year. In sync with the market rebound, we resumed starts and land spend to match the improving market conditions, and this rebound has continued into the first two weeks of June.” He also mentioned the effect COVID has had on demand: “While unemployment increased throughout the quarter due to impacts from the COVID-19 pandemic, customers moved from rental apartments and from densely populated areas to purchase homes, and home sales grew steadily, as record-low interest rates and low inventory levels drove a favorable rebound in the homebuilding industry.” Finally, the company re-instituted its 2020 guidance.

 

The MBA reported that new home purchase applications increased 26% MOM in May and 11% on YOY basis. “The solid increase in new home purchase applications in May is another indication of a recovery in the housing market,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “MBA estimates that new home sales rebounded 26 percent last month – a healthy turnaround after three months of declines. Homebuyer traffic is rising, and homebuilders are continuing to ramp up production following the COVID-19 pandemic-related restrictions. We expect to see additional near-term strength in the coming months from the resumption of delayed sales activity caused by the social distancing and stay-at-home orders during March and April.”

 

The MBA reported that the share of mortgages in forbearance has leveled out at 8.55%. “Results from the first week of June showed a slight uptick in the overall share of loans in forbearance, but this increase was primarily driven by a larger share of portfolio and PLS loans in forbearance,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Half of the servicers in our sample saw the forbearance share decline for at least one investor category. Although there continues to be layoffs, the job market does appear to be improving, and this is likely leading to many borrowers in forbearance deciding to opt out of their plan.” Given the way the CARES Act was drafted, there was almost no penalty for taking forbearance, and it sounds like many took it pre-emptively. Ginnie loans was flat at 11.8%, while GSE loans came in at 6.4% and private label mortgages were 10.2%.

 

The housing market outside New York City is booming. Local builders are getting slammed with inquiries and are selling homes at a rapid pace. “People who are now in the Hudson Valley looking for homes, many of them have never been to the Hudson Valley before,” Mr. Petersheim said. “That’s new to the marketplace, that urgency.” I guess being cooped up for 3 months in an 800 square foot studio that costs 5 grand a month will wear on anyone.

 

Fed Head Robert Kaplan says the economy will experience a historic contraction before rebounding in the second half of the year. From the sound of it, the economy is already bouncing back.

 

I will be doing a podcast for the Information Management Network this morning. I will be discussing economics, housing, and the markets. I will leave a link once I get one.