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Market Matters – October 25, 2020 Edition


 

Stimulus talks dominated the market move this week, as both sides appear to want to get a stimulus done before the election. This has sent bond yields higher, specifically the 10-year as it is now above 0.80%. Momentum is carrying the 10-year yields higher, although the technicals are showing that we are getting to be a bit oversold. Looking to next week, we are getting close to the election so traders will be getting positioned for the election results if they haven’t already. The second round of stimulus is still not agreed upon so the markets will be watching to see what progress is made. Of course, the path of the virus is always a concern. It is unclear what reaction the market will have if we see a spike in cases as it is assumed that there will not be a second lockdown; however, we would expect a strong market response if there is progress made towards a vaccine.

 

Initial Jobless Claims
Initial Jobless Claims for the week ending October 17th fell to 787k, which is down -55k from the previous week’s revised level of 842k (orig. 898k). The last time the weekly claims data was lower was back on March 14th at 282k. Continuing claims, which lag by a week, also saw a significant decline for the October 10th week by -1.024mln to 8.373mln. We also saw a downward revision to the prior week as well, down another -621k to 9.397mln vs. the originally reported 10.018mln. This now means that continued claims have fallen by more than 1mln per week over the past 3 weeks.
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Existing Home Sales

Existing Home Sales for September rose by +9.5% to a seasonally adjusted rate of 6.54mln units. Looking YoY, existing home sales are now up +20.9%. Within the September data, the inventory of homes for sale fell -19.2% annually to just 1.47mln at the end of the month. At the current sales pace, that represents only a 2.7-monthly supply. That is now the lowest since the tracking of the data back in 1982. As we know, with supply tighter, prices have continued to rise. The median price sold in September was $311,800, which is a +14.8% gain vs. a year ago. This is also an all-time high dating back to 1968. Regionally, sales in the Northeast rose +16.2% at an annual rate of 860k and a +22.9% increase from a year ago. The median price in the Northeast was $354, 600, which is up +17.8% YoY. In the Midwest, sales rose +7.1% to an annual rate of 1.51mln and up +19.8% from a year ago. The median price in the Midwest was $243,100, which is a +14.8% increase YoY. Sales in the South increased by +8.5% to an annual rate of 2.8mln and up +22.3% from the same time a year ago. The median price in the South was $266,900, which is a +13% increase YoY. Finally, sales in the West rose by +9.6% to an annual rate of 1.37mln in September, an +18.1% increase from a year ago. The media price in the West was $470,800, up +17.1% from September 2019.

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NAHB Housing Market Index
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Building Permits

 



We feel neutral on the market as the 10-year is at 0.8396%. We have resistance at 0.78%, then 0.67%, while we have support at 0.875%, then at 0.95%. With the rise in the 10-year this past week, best to take any price improvements to get your loans locked in.

 

Call today to discuss this week’s market trends.

 

 

Pam Jamison
Loan Originator
NMLS# 277012
8310-1 N. Capital of Texas Highway, Suite 195, Austin, TX 78731
512-775-1001 | 512-582-8778
pam.jamison@primelending.com | 
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