Vital Statistics:
|
Last
|
Change
|
Percent
|
|
|
S&P Futures
|
1807.0
|
2.0
|
0.11%
|
|
Eurostoxx Index
|
2981.6
|
1.6
|
0.05%
|
|
Oil (WTI)
|
97.71
|
0.1
|
0.06%
|
|
LIBOR
|
0.243
|
0.002
|
0.73%
|
|
US Dollar Index (DXY)
|
80.22
|
-0.098
|
-0.12%
|
|
10 Year Govt Bond Yield
|
2.85%
|
-0.01%
|
|
|
Current Coupon Ginnie Mae TBA
|
104.6
|
0.3
|
|
|
Current Coupon Fannie Mae TBA
|
103.8
|
0.4
|
|
|
RPX Composite Real Estate Index
|
200.7
|
-0.2
|
|
|
BankRate 30 Year Fixed Rate Mortgage
|
4.48
|
World markets are
higher this morning after Friday's stronger-than-expected jobs report. Bonds
and MBS are up small as well.
The upcoming week
is relatively data-light, so the markets will be left to fret about the FOMC
meeting next week. The Street seems to be handicapping a December tapering at
50/50. Don't forget, even if the Fed does begin to reduce asset purchases, it
doesn't necessarily follow that MBS purchases will drop. In fact, most
observers think that the Fed will only reduce Treasury purchases and maintain
their current rate of MBS purchases. The only reason why the Fed may want to
reduce MBS purchases would be to reflect that the Fed's current purchase rate
of $40 billion a month is much higher as a percentage of total MBS issuance
than it was a year ago. This is because overall issuance has fallen since the
refi boom ended.
Consumer
sentiment is on the rebound, but is still below what one would call
"normalcy." The chart below is of the University of Michigan Consumer
Sentiment Index. You can see that we are close to post-bubble highs, but are
still mired in that early 90s malaise. Consumer sentiment is a big driver of
real estate activity - in fact the CEO of KB Home said that consumer sentiment
matters more than interest rates, at least to the homebuilders. Things are
improving, albeit slowly.
It
looks like we have some sort of budget deal in Washington, which should at least
take the possibility of another government shutdown off the table. It looks
like some of the sharper edges of the sequester will be sanded down, and it
will be paid for by increased pension contributions from Federal workers and
increased airport security fees. It is a "kick the can down the road"
agreement that will at least prevent some fireworks beginning next year.
The
FHA reduced the
upper limit on FHA mortgages in high cost areas from $729,750 to $625,500. The
jumbo market has been back for quite some time, and FHA is happy to let upper
income borrowers access private capital.
Completed
foreclosures dropped 30% from a year ago, and 26% from last month, according
to CoreLogic. The foreclosure pipeline is 900k homes, which is a big drop,
however we are still far from "normalcy," which would be about a
quarter of that number. The judicial states still have the highest level of
foreclosure inventory, as you can see from this foreclosure heat map.
Brent Nyitray, CFA
Dellacamera Capital Management
National Asset Direct
3 International Drive, Suite 120
Rye Brook, NY 10573
T: 212-808-3556
C: 917-841-4938
AIM bnyitray
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