One exciting outcome of the pandemic is innovation. This story is a classic example of starting a business out of need for income and demand in the market. According to the census bureau this is happeningaround the country at the fastest pace in a decade.

Rates – recovered some of their losses from the previous week’s sharp decline in mortgage backed securities. A ‘bullish morningstar‘ pattern emerged which, from a technical standpoint, does indicate a move up and hopefully a decrease in mortgage rates. Rates remain at 1% lower than this time last year.


Jobs – the number of people filing of unemployment for the first time spiked up last week approaching the 1M mark (5X pre-covid levels). Continuing claims also moved higher by 200K.

Chart 1_Shipments 2

Freight – the Cass Freight Index showed that shipments are back above pre covid levels, up 6.7% year over year. Expenditure is up 13% year over year and at a record high. This could be an early indicator of inflation, the arch nemesis of mortgage rates.

Stimulus – Biden’s proposed stimulus plan:
– Direct payments of $1,400
– Unemployment Benefits up $400 (currently $300 weekly) thru Sept
– Pandemic Unemployment Assistance extended thru Sept
– Min wage $15
– an additional $25 to help renters
– Eviction and foreclosure moratorium thru Sept
– can apply for forbearance thru Sept
– Child tax credit refund increassed to $3.6K

Inflation – The Producer Price Index (PPI) which measures wholesale inflation rose by 0.3% in December and is up 0.8% year over.

Retirement Funds – a Kiplinger survey showed that 31% of households withdrew money from their 401K and 27% borrowed form plans due to the pandemic. Of those that tapped 80% took over $25,00 and 1/3 took more than $75,000.

Mortgage Application volume increased by 16.7% to their highest level since march. Refinances are up 92.5% year over year while purchases are up 10% Refinance applications now constitute 75% of total volume.

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