GDP – the headline figure for the worst GDP report on record was -33%, does that mean that 1/3 of our economy evaporated in one quarter? The report showed that we produced 9.5% less in Q2 than Q1. If we continue on this rate for an entire year, then the economy would contract by a staggering 33% (typically the economy expands by approximately 2%). This contraction is mostly caused by pandemic related closures, once businesses open back up we will be able to better measure the actual impact.

Rates – improved slightly this week and remain at historic lows – down approximately 7/8% from this time last year.

Jobs – the number of people filing for unemploymnet benefits for the first time remains at 7X pre-covid levels. Between unemployment insurance and Pandemic Unemployment Assistance claims their are roughly 30M people receiving assistance or an alarming 19% of the work force. the number of people filing for unemployment benefits for the first time remains at 7X pre-covid levels. Between unemployment insurance and Pandemic Unemployment Assistance claims there are roughly 30M people receiving assistance or an alarming 19% of the work force.

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Appreciation – Case Shiller – the gold standard of home value indices – showed home prices increased nationwide by 4.5% from May 2019 to May 2020. Inventory levels are down 18% over the same time period which supports values.

Inflation – the Personal Consumption Expenditure report showed that the core inflation rate (strips out the more volatile energy and food prices) is down from 1% to 0.9% year over year. The Fed’s target for the core rate is 2% which means they will continue quantatitive easing (purchasing MBS and Treasury Bonds) – good news for mortgage rates.

Applications – volume decreased by 0.8% from the the previous week. Purchases are up 21% year over year and refinances are up 121%.

Forbearance – the share of mortgages in forbearance decreased by 0.06% to 7.74%. Roughly 3.9M Americans are in forbearance plans.]

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