Iceland – has experienced its share of bubbles. A herring bubble in the 1960’s, in the early 2000’s they bet on becoming a financial hub before that crash and shortly after their country blew up. The 2010 eruption of Eyjafjallajökull caused the largest airspace disruption since WWII. The volcano did, however, ignite a tourism industry and budget airline WOW Air was born. By 2016 tourism was simultaneously Iceland’s largest export and largest private employer. Since WOW went bust in March tourism has declined by 16%. The Icelandic central bank cut interest rates to decade low levels and are forecasting contraction.

Rates – improved slightly this week as the 10 Year US Treasury continues its move lower and is approaching recent lows.


Jobs – the unemployment rate hit a 50 year low. 391,000 jobs were created in September while the labor pool increased by 117,000 which explains why unemployment ticked down 0.2% Weekly earnings (which measures actual take home $$) slowed their inflation on a year-over-year basis by 0.3% to 2.6%. Soft inflation is good for mortgage rates.

Core Logic Report

Appreciation – the Core Logic report showed home values increased 0.4% in the month of August and are at a 3.6% year-over-year pace. Core Logic increased their forecast by 0.4% to a 5.8% increase in prices over the next 12 months (they are often conservative). On a $350,000 home that is an increase of $20,300 in equity.

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