National Flood Insurance Underwater? Back in 1965 after growing tired of helping flooded folks with disaster relief the Government decided to provide national flood insurance in the wake of “Billion Dollar Betsy” hammering the Louisiana coastline. Private insurers have never really shown much interest in covering flood damage as it is simply too expensive. In addition to providing insurance the government used flood zones to set development rules and limit construction in flood-prone areas. Some problems are that those flood maps don’t get updated frequently enough and are very expensive to make and developers often build in flood plains and pass on the risk. Over the last 20 years there has been so much flooding that the program is $20B in debt even after Congress forgave $16B. FEMA has been offering buyouts for towns to move folks out of flood plains, but towns have been reluctant to approve these buyouts because they don’t want to lose housing stock.
Mortgage Rates increased again this week as the price of Mortgaged-Backed Securities (MBS) continues to wane. Rates are down approximately 0.5%
Retail Sales rose 0.4% in October. When stripping out autos and gas, sales only rose 0.1%. The Core retail sales, which is factored into GDP, decline 0.1%.
Inflation – the Producer Price Index, which measures wholesale inflation, rose 0.2@ in October and is up 2.4% year over year. This is a modest increase from September’s 1.9% reading.
The Consumer Price Index rose 0.24% in October and is up 2.6% year over year. The Core rate increased 0.28% in October but is flat year over year.
Fed Chair Jerome Powell spoke yesterday and said they might not cut on the Dec. 18th fed meeting and that it will be data dependent.
Mortgage Applications – to purchase homes rose 2% last week and are up 1% year over year. Refinances declined 2% last week and are up 43% from this time last year.