Home purchase mortgage applications continue to rebound
Trust me, the economic data is still terrible, don’t let 4 weeks of positive purchase application data say otherwise.
These are dark times. But even in dark times, we are preternaturally prepared to see the end of the tunnel. We learned in the human physiology class that the photoreceptors of the human eye can detect a single photon of light. While it may not be until nine or more photos hit the retina that we perceived light, we detect before we can perceive. Likewise, if we are diligent, we will be able to identify the return of hope and light coming back into the American economy before it is perceived by all those poor masked souls around us.
5 indicators that will show when the housing market is rebounding from COVID-19
A lot people don’t understand how we can have 4 straight weeks of positive data on a week to week basis with the worst economic charts of our lifetime. I tried my best to explain that here for HousingWire yesterday.
Remember, economics is demographics and producutivity, the rest is stamp collecting. Housing economics is primarly moved by demographics and mortgage rates.
Can we still have a “normal” year in housing?
The next existing home sales report is going to be terrible as it is for the month of April. The May’s report coming out in June won’t be as bad due to the decline we will see in April. The June’s report is interesting to me because I believe that is where we should start to look at housing data again in a more normal way.
Make no mistake, we are in the fight of our lifetime with this virus and 33.5 million Americans have filed for jobless claims, the last jobs report we lost 20.5 Americans. These massive job losses matter, many companies aren’t coming back and we can’t let up on more fiscal and monteary aid.
From Fred: Weekley Economic Index https://fred.stlouisfed.org/series/WEI
However, there is a economic equilbrium with supply and demand for housing that is a much more sophicated discussion that just trolling America on social media sites. Be patient here with housing data. Like most things with this virus, scale has been reached , now duration is the question.
Be the detetive not the troll.
Feb 3rd Housing Wire:
“In chaos theory, the butterfly effect refers to the idea that due to the interconnectedness of all things, a small event can result in large effects on a nonlinear, dynamic system.
The butterfly effect gets its name from the metaphor that even small swirls of air caused by the flapping of a butterfly’s wings can change the path of a tornado, even though the system is far removed in space and time from the initial event.
In many ways, we see this theory manifest in the U.S. bond and stock market – a dynamic system that is prone to the influences of distant perturbations.
Case in point, a virus outbreak among an urban population of a distant country may lead to a lower rate of growth in the economy in 2020. But it could also lead to a lower 10-year yield and thus lower mortgage rates for the housing market.”
Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his Facebook page https://www.facebook.com/Logan.Mohtashami and is a contributor for HousingWire.
