Bankruptcies Declined During the Pandemic

In 2021 400K people filed for bankruptcy down from 800K in 2019. Unemployment insurance and stimulus checks definitely helped those numbers. Credit counselors expect an increase in bankruptcies this year as benefits have worn off and the future is slightly more predictable. If the number of bankruptcies doubled in 2022 and hit 800K again they would still be at nearly half the levels of 2010’s high of 1.53M.

Mortgages Rates settled a bit this week (Mortgage Backed Securities respond positively to geopolitical instability) and ended the week where they started. Mortgage rates are up approximately 1.125% from this time last year.

Home Sales – the median home price is now $350K which is up 15.4% from this time last year. Remember that median is easily skewed by lack of inventory of lower priced homes. First time homebuyers accounted for 27% of sales (down from 30%) cash buyers make up 27% of sales and investors purchased 22% of homes (up from 17%). Foreclosures and short sales comprised 1% of transactions.

Jobs – the number of individuals filing for unemployment benefits for the first time increased by 23K but remain at levels similar to pre-covid lows. The labor market remains tight.

Homebuilders – even though construction costs are up 21% year over year builders reamain extremely confident with an overall index reading of 82 (any number of 50 signals expansion). The number of single family new construction starts is down 2.4% year over year and single family permits are down 5% year over year which speaks to continued demand for housing moving forward.

Inventory – the number of existing homes for sales (now less than a million) is at it’s lowest level down roughly 0.5M from a previous low in the 90s when our population was only 250M (90M less than current).

Mortgage Applications – fell 1% last week and are down 7% on a year over year basis. When taking in to account cash buyers purchases are down roughly 4% year over year. Refinances are down 54% year over year.

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