The stock market opened a little higher this morning despite some somber news releases. Of course the number of COVID cases is surging across the US forcing many states to mandate quarantines when traveling from certain “hot sports”, but stock investors have ignored case growth since the middle of the economy shutdown. What is concerning is that Apple claims that people are starting to ask their phones for less driving directions. The phone company says that requests for directions have decreased by over 6% since the holiday weekend. Indicating that people are going to fewer new restaurants, small businesses and spending less in general. The majority of economic reports are lagging by at least a month. This new metric has the potential to be a more “real time” indicator of consumer confidence and spending trends.
Mortgage bonds took a small dip this morning; however, we have seen a nice steady increase in bond pricing from June 7th. This is of course good for borrowers because an increase in bonds is correlated with a decrease in mortgage interest rates.
With the number of pay cuts and furloughs the US has seen, it is inevitable that once rent forgiveness programs come to an end, landlords and real estate investors will take a large hit. An analysis conducted by Lending Tree with Census Bureau data found that 31% of renters across the nation are not confident they will be able to make next months rent. This is bad news for mortgage interest rates because as defaults go up, rates go up.
We hold a locking bias.