Shipping delays, especially for smaller retails who use the more affordable USPS, are worse than ever this year as online retail volume increased nearly double the expected 20% increase. The retailer in this story experienced 20% of orders delayed up to 4 days (in addition to loss of packages) and had to eat the cost of switching to UPS.
Rates improved marginally this week as the pricing on Mortgage Backed Securities (MBS) held steady after a bond coupon rollover. I’ve switched to showing a MBS graph as the rates have diverged from the 10 Year Treasury. As a reminder when the price of MBS increases rates get better. A MBS is simply a package of mortgages sold on Wall Street to investors and the public. Rates remain approximately 1% lower than this time last year, languishing at historic lows.
Jobs – the number of people filing for unemployment for the first time increased by 137,000 last week. The number of people filing for unemployment claims on a continuing basis also increased by 230K. While the number of people claiming Pandemic Unemployment Assistance dropped – it dropped because benefits ran out.
Panic/Euphoria – Citi’s Panic/Euphoria index, regarded as a contrarian indicator, increased from 1.1 to 1.51 – the highest level since early 2000. This could indicate we are due for a stock market correction – if this occurs it could be good for MBS and mortgage rates.
Equity – CoreLogic reported that homeowners with mortgages (63% of all properties) saw an increase in equity of 10.8% over the last year. Nationwide this combined for an increase of $1T or roughly $17,000 per homeowner andthe largest equity gain in 6 years.
Mortgage Applications – overall volume decreased marginally last week but is still up significantly on a year over year basis. Refinances are up 89% and purchases are up 22% from this time last year.
Forbearance – The share of mortgage loans in forbearance remained unchanged from the previous week at 5.54%, roughly 2.8 million homeowners are in forbearance.