Appreciation Climbs

Good morning everyone!

Home appreciation numbers came in this morning showing 1.4% appreciation in the month of October and 8.4% over the last 12 months. This 5^th straight month of appreciation is the fastest appreciation the US housing market has seen in the last 6 years. With home prices at record highs, the stock market at record highs, and mortgage rates near record lows, there’s no market headline that could surprise us at this point.

Mortgage backed securities bounced off their 50 dma yesterday and are now sitting above their 25 dma that they rode for about 2 straight weeks. Now that MBS are above their 25 dma, they have a strong tested ceiling of resistance – a ceiling that has caused multiple large declines after being tested. Because of this, we are holding a locking bias.