Fed Chair Nominee – current Fed chair Powell’s term expires on May 15 and Kevin Warsh has been nominated to succeed him. The markets didn’t respond super favorably to this nomination as he is considered more ‘hawkish’ than other potential nominees. Warsh has experience serving on the Fed board of Governors (2006-2011) and has been publicly critical of current Fed policy.
Mortgage Rates and the price of Mortgaged-Backed Securities (MBS) moved sideways this week and remain slightly off 3-year lows. Rates are down roughly 0.75% from this time last year
Rents are down 1.4% from this time last year and vacancy is now at 7.3% – the highest since Apartmentlist starting tracking in 2017. These numbers should help inflation reports.
Home Values – Case-Shiller released their Home Price Index, considered the gold standard of appreciation, showed that home prices rose 0.4% in November. This is the 4th consecutive month of gains and prices are up 1.4% year over year.
Inflation – the Bureau of Labor & Statistics released their Producer Price index for December which showed headline inflation increased by 0.5%. Year of year it remains up 3%. If you strip out food and energy, the core rate increased 0.7% bringing the year over year rate up to a 3.3% increase.
Mortgage Applications to purchase homes were flat last week but remain up 18% year over year. Current purchase application volume is at its highest in 3 years. Refinance applications declined 16% last week but are up 156% year over year. Refinance applications make up 56% of total applications.