22 Dec A Historic Year for Housing
We got Existing Home Sales in this morning which showed the continued strength of the housing market. The reading came in 2.5% lower than Octobers, equaling a 26% increase from 12 months ago. While the rest of the economy is far from pre-Covid levels, the Chief Economist of the National Association of Realtors attributes the housing markets future success in 2021 to low mortgage rates, confidence in more stimulus, and a successful rollout of a Covid vaccine.
Consumer confidence came in over 9% below expectations this morning at 88.6, the lowest reading since August. There are many reasons why this could of happened including a new president taking office or increasing Covid cases through the Winter. However, there was one of the most positive pieces of information consumers could receive in 2020 – a rollout of the Covid vaccine. Regardless, it looks like the bad outweighs the good to consumers right now.
Mortgage backed securities are slightly up this morning after breaking below their 25 dma which they had been hovering above for weeks. We are now well below that average and are in the middle of a trading channel. Tomorrow we will be getting the PCE report. While inflation has been more tame the past two months, and increase could drastically increase mortgage rates. We are holding a locking bias.