Which economies have fared well during Covid and do they have anything in common? Japan & Germany’s work sharing programs have performed well – instead of cutting 20% of your workforce cut everyone’s hours by 20% and the government provides assistance as well. Ultimately countries with the best healthcare and aggressive early public health responses have fared the best.

Rates – continue to hang tight at historic lows as the Fed purchases $4B in Mortgage Backed Securities per day. Rates are down approximately 3/4% from this time last year.

Jobs – the number of new people filing for unemployment for the first time didn’t change from last week after dropping steadily for 10 straight weeks. It is still well over a 7X pre-covid levels. Currently there are approximately 23.5M people receiving unemployment insurance. The estimated unemployment rate is 16%.

 housing starts

Supply – nationwide housing supply remains at historically low levels. Between January and May this year 42% of home buyers were in bidding wars. The number of new housing starts is down 23% year-over-year and new permits (forward indicator of new starts) are down 9% year-over-year which point to tight supply levels for the foreseeable future. Tight supply and strong demand from Millennials will continue to prop up home values.

Forbearance – 4.6 million homeowners are in forbearance which is approximately 8.7% of all mortgages down 0.1% from last week.

Applications – remain strong! Purchase application recorded their 9th straight week of gains, increasing by 4% reaching 11-year highs. They are up 21% from this time last year.

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