Dumplings for a Party, Mortgage Rates Increase, Tepid Inflation

Happy Lunar New Year

Happy Lunar New Year! Hope everyone is enjoying time with family & friends and eating lots of good food. A big thank you to all of our clients, business partners, friends & family for the great year of the Rat. We are sad to cancel our annual dumpling party – instead I made a video so you can have your own party to ring in the Ox!

Rates– worsened for the third consecutive week. Mortgage backed securities dropped below the 200 day moving averages to the lowest level they have been over the last quarter. Rates are down 3/4% from this time last year.

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Jobs – Fed Chair Powell says the jobs market is as ‘cold as ice’ and that they will continue to increase debt to help the economy. He also reiterated that it’s not the time to consider raising the Fed rate as the unemployment rate is nearly 10%. The total number of people claiming ongoing unemployment benefits is approximately 20M.

Inflation – the Consumer Price Index showed tepid inflation. It rose by 0.3% in January and the year over year reading remained stable at 1.4%. If you strip out the more volatile food and energy prices it actually decreased from 1.6% to 1.4% year over year. As a reminder low inflation is good for mortgage rates.

Mortgage Applications – volume decreased by 4.1% over the previous week but year over year purchase are up 17.5% and refinances are up 46% .

Forbearance – the Mortgage Bankers Association latest survey showed that 5.35% of mortgage loans are in forbearance, (down 0.03% from the previous week) and roughly 2.7 million homeowners are in forbearance plans. Roughly 14% of homeowners in forbearance are current on their payments.

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