Free Republic

As we are all aware, The Federal Reserve launched its monetary “stimulypto” in March 2020 to combat the Covid virus. Coupled with the surge in Federal stimulus, we have seen home prices rise over 20% since February 2020. Specifically, New York City home prices are up 26.3% since February 2020, Chicago home prices are up 21.7%, and Los Angeles home prices are up 32.5%. Fed monetary stimulypto is up 113% since February 2020. Of course, this has resulted in soaring PROPERTY TAXES as well. According to Attom Data Services, “Among 1,481 U.S. counties with at least 10,000 single-family homes in...

The book and movie “The Big Short” revolved around the 2005-2007 housing bubble driven by lending to borrowers with subprime credit (and little or no underwriting). As we know, Bear Stearns, Lehman Brothers and other investment banks too large positions in subprime asset-backed securities (SABS) that became highly toxic once the demand for high-yield subprime ABS dried up. Fast forward to today. Mortgage originations by credit scores of 620 or less have shriveled while home price growth YoY is even higher than the subprime mortgage crisis of 2005-2007. So, is the US facing another “Big Short” scenario? Yes and no....

Long-term U.S. mortgage rates continued to climb this week as the key 30-year loan rate reached 5% for the first time in more than a decade amid persistent high inflation. The average 5% rate on the 30-year mortgage was up from 4.72% last week, mortgage buyer Freddie Mac reported Thursday. The average rates in recent months have been showing the fastest pace of increases since 1994. By contrast, a year ago the 30-year rate stood at 3.04%. The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, jumped to 4.17% from 3.91% last week. Yet The Federal...

LAS VEGAS (KLAS) — Governor Steve Sisolak launched the “Home Means Nevada” initiative Thursday morning by announcing a $500 million program for affordable housing in Nevada. It will be the single largest investment in affordable housing in the state’s history and will complement the $300.7 million earmarked by the Nevada Housing Division earmarked for affordable housing projects through its tax-exempt bonding authority.

Today, the US Treasury 10-year yield exploded upwards by over 12 basis points. With it, the 30-year mortgage yield is above 5%. And MBA Mortgage Purchase Applications are actually increasing. Today’s bond market summary shows the 10-year Treasury yield up 12.7 basis points. Its the same all over the western world. Asia? Not so much. Fear of further Fed fireballs coming from removal of the monetary punchbowl.

Mortgage interest rates continue their meteoric rise (along with home prices), the result of which is a tanking of consumer confidence in home buying. The University of Michigan survey of consumers about buying conditions for housing remains depressed due to rising mortgage rates and surging home prices. Bankrate’s 30Y mortgage rate is down slightly today to 5.06% as the 2-year Treasury yield declines and the anticipated rate hikes have fallen to 9.19. As I mentioned earlier, mortgage credit availability hasn’t recovered from the “China Covid Correction.”

Even in the face of rising mortgage rates and stagnating construction numbers, the housing market is still scorching hot. Because of this, it may be difficult to believe that more than 16 million homes across the U.S. are sitting vacant. But this doesn’t mean millions of abandoned and dilapidated homes are withering away in the suburbs. Vacant homes can be unoccupied for many reasons beyond being uninhabitable. For example, a house can be vacant because it’s still on the market to be sold or rented or it’s a vacation home not currently in use. Regardless of why homes are vacant,...

The housing and mortgage markets are addicted to gov. MarketWatch had an interesting piece on mortgages entitled “Here’s how much a 40-year mortgage would save you each month vs. a 30-year loan. And the ultimate cost.” To make a long story short, a 40-year mortgage, by stretching the payment out from 30 to 40 years, means that the mortgage mortgage payment declines from $1,687 to $1,504. But with The Fed planning on taking away the monetary punchbowl, mortgage rates are rising making housing even more unaffordable. But most things are not equal. The 40-year mortgage results in a slower paydown...

2022 has been a tough year for bond investors and the mortgage industry. Doubleline’s Jeff Gundlach observed that the 2 Year Treasury yield is up 125 bp over the past month or so. I commented that the 2 Year Treasury Yield is up 179 bp since December 31, 2021 and the 30-year mortgage rate is also up 179 bp since the end of 2021. Yes, 2022 has been a dismal year for bonds and the mortgage market. The ICE BofA MOVE index, a yield curve weighted index of the normalized implied volatility on 1-month Treasury options, has risen in 2022...

Applications for mortgages are dropping as mortgage interest rates keep rising while home sellers are lowering their prices as additional supply hits the market, according to multiple reports.The interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) was 4.90 percent in the week ending April 1, up from 4.80 percent a week ago, an April 6 news release by the Mortgage Bankers Association (MBA) stated.Rates for those with loan balances greater than $647,200 rose to 4.51 percent from 4.40 percent while 30-year fixed mortgages backed by the FHA saw interest rates rise from 4.66 percent to...

Can The Federal Reserve ACTUALLY tighten monetary policy? Let’s look at the facts. Under Biden, we have seen inflation rise from 1.4% to 7.9% (the latest inflation numbers will be out Monday). And we have seen Treasury public debt rise from $27.8 trillion to $30,346 trillion (actually, $30,371 trillion in real-time). Meanwhile, REAL average hourly earnings are declining. Well done, Washington DC! You deserve the Washington Redskins Commanders. With real GDP growth less than 1%, a war raging in Ukraine, and 20% flexible price growth, the US economy is in a shambles, relying on The Federal government and The Federal...

As the US Treasury 2-year yield hits 2.507% (up from 0.128% when Biden was installed as President) and the number of Fed rate hikes over by February 2023 hits 9.6, Bankrate’s 30-year mortgage rate breached the 5% mark at 5.04%. The most recent data from on existing home sales show YoY sales in negative territory as The Fed begins in monetary fireball tightening. The Fed’s minutes from the most recent meeting indicates that The Fed will shedding $95 billion a month from it swollen balance sheet. At almost $9 trillion mostly populated by Treasuries will be the first asset to...

Mortgage applications are going down as expectations of monetary tightening send mortgage rates soaring. Mortgage applications decreased 6.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 1, 2022. The Refinance Index decreased 10 percent from the previous week and was 62 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 9 percent lower than the same week one year...

Euphoria! CoreLogic’s Home Price Insights revealed that home prices rose 20% YoY in February despite REAL average hourly earnings declining -2.678% YoY. THAT is euphoria! Or Stimulypto, as I like to call it. No, The Federal Reserve still hasn’t removed its staggering monetary stimulus. Notice that M2 Money Stock is still growing at a torrid 11% pace. 20% YoY home price growth in February? CoreLogic has increased their forecast of home price growth to 5%, likely because The Federal Reserve is imitating a sloth in removing its monetary Stimulypto. Of course, there are other assets growing at lightning speeds. US...

Rental prices for single-family homes have skyrocketed to record levels across the U.S., increasing to an average of 7.8 percent in 2021. Apartment rents are up too. “Of the markets in our analysis, 97.7 percent recorded price increases for one-bedrooms and all markets saw increases for two-bedrooms [100 percent],” the report, issued last month, said. “Nationwide rent prices have increased significantly year-over-year. One- and two-bedroom rents were up 24.4 percent and 21.8 percent, respectively.”

Numerous elites like Klaus Schwab of The World Economic Forum (and Davos fame) are calling for a “Great Reset” in global economies. But perhaps “The Great Reset” in taking place in asset markets … and not in a good way. Consider what has happened since President Biden was elected. The S&P 500 total return index (green index) has risen thanks to The Federal Reserve’s balance sheet expansion (orange line) with COVID. Until 2022 when the expectation of Fed rate hikes surged from 3 in late December 2021 to 9.4 expected rate hikes over the next 12 months (yellow line). The...

This clip from the Bruce Willis and Meryl Streep film “Death Becomes Her” perfectly represents the predicament surrounding The Federal Reserve’s loose monetary policies and housing prices: “Now a warning” after Meryl Streep ingests The Fed’s magic monetary elixir. The Dallas Federal Reserve issued a warning recently that a housing bubble is brewing … after the economy drank its magic monetary elixir. We can see the housing bubble clearly (defined as the spread between REAL home price growth and REAL average hourly earnings). Notice that the current housing bubble looks similar to the infamous 2005 housing bubble. And the US...

Homebuyers have faced a tough proposition during the pandemic: Swallow rapid price increases and forgo typical steps like house inspections, or risk getting left out of the real estate market. Those dynamics have caused some observers to question whether the U.S. is repeating the housing bubble of the early 2000s, which led to a painful housing crash in 2006 and the Great Recession the following year. The answer, warns the Federal Reserve Bank of Dallas, is that the market is showing "signs of a brewing U.S. housing bubble."

New RV shipment data from the RV Industry Association’s (RVIA) February 2022 survey of manufacturers revealed demand for this time of year is at some of the highest levels ever. RVIA said total RV shipments last month topped 53,722 units, an increase of 11.3% compared to the 48,286 units shipped during the same month last year. RV shipments jumped 13.6% through February versus the same point last year with 107,012 wholesale shipments. Red hot demand for RVs continues through 1Q22, well above a ten-year average. “Our latest shipment report shows the RV industry is continuing its strong start to 2022,”...

Across the country, corporate landlords are expanding manufactured housing portfolios and driving up rents, pushing longtime residents out. GOLDEN, Colo. — When Sarah Clement moved to the Golden Hills mobile home park two years ago, she felt like she had won the lottery. After years of squeezing into one-bedroom apartments with her, her 7-year-old son finally settled into his own bedroom, his toys splayed out in the yard and his school just at the edge of the park. Ms. Clement loved the friendliness of her neighbors and getting to watch the sun rise over the scrubby mesa to her east...