21 Aug Existing Home Sales Hit
Low housing inventory lead to one of the highest existing home sales reports we have ever seen. Existing home sales are up 25% from last month which was up 21% which has lead to the highest median home price the US has ever seen. This is happening at the same time that FHA loans hit their highest default rate since 2011. However, the housing market seems to have some powerful forces to back it including a 3 month declining unemployment rate, rising home values that provide FHA owners with additional equity, and more expected government stimulus.
Stocks continue to climb this morning approaching all time highs. At the same time, we are seeing businesses with less than 500 employees close their doors at twice the rate that those over 500 are. Kronos executives predicted that this will be the trend for at least the next 18 months. They claim this is due to larger companies having an easier time converting to non-contact business models as well as restricted lending to small businesses and those who are self-employed.
Mortgage backed securities are down a little this morning – sitting right above the 25 day moving average that they broke above yesterday. With the room to fall if they break below their 25 day, we hold a locking bias.