Housing Remains Affordable

Vital Statistics:

	Last	Change	Percent
S&P Futures	1747.3	-1.2	-0.07%
Eurostoxx Index	3037.2	-1.8	-0.06%
Oil (WTI)	97.48	0.4	0.38%
LIBOR	0.237	-0.001	-0.52%
US Dollar Index (DXY)	79.25	0.066	0.08%
10 Year Govt Bond Yield	2.51%	-0.01%
Current Coupon Ginnie Mae TBA	103.6	0.0
Current Coupon Fannie Mae TBA	102.6	0.1
RPX Composite Real Estate Index	200.7	-0.2
BankRate 30 Year Fixed Rate Mortgage	4.28

Markets are flattish on no real news. UPS, which tends to be a broad economic indicator, beat numbers. Durable Goods came in better than expected. Bonds and MBS are flat

The latest CoreLogic Market Pulse is out. They discuss mortgage fraud, negative equity, foreclosures, and home prices. The key metric of affordability - the price to income ratio - has been creeping up, but is still around historical averages, meaning housing in no longer dirt cheap, but is still reasonably priced compared to historical standards, not just the bubble years. 

It is looking like some sort of grand bargain isn't going to happen as we approach the budget negotiations. Democrats want to get rid of the sequester. Republicans are willing to replace the sequestration cuts with other cuts, particularly in Medicare and and other long-term expenses like Federal retirement. Tax hikes are a non-starter. Republicans are probably not anxious to re-live the shutdown either, so we probably get some sort of extension of the CR and the debt ceiling without much in the way of attacking spending. 

The Morning Report will be on hiatus early next week as I will be in DC for the Mortgage Bankers Conference. Hope to see some of you there.

Finally, what if Facebook was around from WWI to WWII?

Brent Nyitray, CFA

Dellacamera Capital Management

iDirect Home Loans

1010 Washington St, 6th floor

Stamford CT 06901

T: 203-817-3614

C: 917-841-4938

bnyitray@dcm-funds.com

AIM bnyitray