Normally stocks and bonds have an inverse relationship to each other- when the stock market crashes bonds do well and vice versa. Currently the price of stocks & bonds are both down in this market – a rise in interest rates erodes the value of bonds. When rates go up the return on new bonds also increases making older bonds that yield a lower amount harder to sell. Fortunately for bond holders those turtles, er bonds, continue to yield the same return regardless of the price you can sell them for.
Mortgage Rates have continued to climb as the price of Mortgage Backed Securities have consistently degraded for nearly 3 months. Rates are up approximately 3.625% from this time last year.
Jobs – the number of people filing for unemployment claims for the first time increased by 29,000 to 219,000. Overall claims are fairly low but this is a significant increase looking back over the previous 6 weeks. The jobs report for September showed the unemployment rate dropped 0.2% to 3.5%. The U-6 or ‘all in’ unemployment rate – which adds back the individuals who have not actively searched for jobs in the last 4 weeks – is at 6.7%
Manufacturing – the ISM manufacturing index fell from 52.8 to 50.9 in September which is the lowest reading since May 2020. This shows a potential easing of inflation as supply pressures and prices are moderating.
Home Values declined 0.7% during the month of august but remain up 13.5% year over year. This is a step down from last month’s report of 15.8% year over year. Moving forward Corelogic anticipates a modest increase of 3.2% in the next 12 months.
Mortgage Applications to purchase homes fell 13% last week and are down 37% year over year. Refinances are down 86% year over year.