The focus lately has been on banks, and the massive amount of liquidity they have drawn from the Fed’s discount window is seen as cause for alarm (see chart below). I think there’s another less worrisome explanation and that is that after 2008, banks learned that it’s...
“We’re all quite mad here, you’ll fit right in.” – Alice in Wonderland If you wonder why the Fed would even consider another rate increase as banks hoard cash and lending standards for everything from autos to credit cards to business loans are tightening rapidly,...
A few weeks ago, I remarked that it was strange that after a 300+ basis point increase in rates, nothing had “broken.” There were no hedge fund blow-ups, no huge trading losses, and no failed banks. I wondered if it was a matter of time, or if the industry and...
Each week, I try find unusual perspectives that are important to our industry but might be a little less obvious or not as well covered by the media. Last week’s observation comes from one of my favorite economists, David Rosenberg, and it’s a doozy. The recent...
Last week’s surprise payroll data gave further support to the Fed’s position that their work isn’t done and won’t be for quite some time. However, the data might not be an accurate reflection of employment conditions, and many economists see large seasonal and other...
For as long as I can remember, “Don’t fight the Fed” has been a universally held axiom which means no matter how right you think you are, the Fed can do the opposite for a lot longer than you can stay solvent. And the Fed has issued many warnings that rates will...
I’ve seen predictions for where home prices will finish in 2023 that range from +5% to -25%. Here’s why I lean toward the upper end of that range, especially in our markets.
In a recent HousingWire article, mortgage M&A experts predicted that as many as 33% of the largest independent mortgage banks would not survive to the end of 2023. The experts expect large numbers of mergers, acquisitions, or outright failures. In the...
I've seen some crazy headlines recently, all breathlessly calling the housing market in some form of collapse. I saw one headline (out of maybe 40) that actually got it right by calling-out the differences between the data and perception in today’s market, so here’s...
Since the start of 2022, the average 30yr fixed mortgage rate (as measured by the Mortgage Bankers Association) has skyrocketed 1.84 percentage points, from 3.52% to 5.36%. On a $250,000 mortgage, that represents an additional annual cost of around $4,600 in...