Market Wrap – 4/6/2021
Tuesday…
Stocks have ended the day lower. The Dow closed -96.95 at 33,430.24 and the S&P 500 closed -3.97 at 4,073.94. Mortgage Bonds ended the day nearly 20bp higher.
Economic Data
CoreLogic released their Home Price Index report for February, showing that Home prices increased 1.2% during the month. Prices rose 10.4% on a year over year basis, which is up from the 10% year over year number reported last month.
CoreLogic forecasts that home prices will rise 0.6% in March…but they have been forecasting minimal gains each month going forward and it seems we have been getting almost 1% gains in each report. They had previously forecasted we would see a 0.5% rise in February, showing how off they are on their forecasts. They see 3.2% appreciation in the year going forward, which lower than the 3.3% forecast in the previous report, and still lower than most forecasts out there. Remember that not that long ago they were expecting a negative 6.6%.
Top Metros:
-Phoenix 16.2%
-San Diego 12.3%
-Denver 10.0%
According to a Redfin Housing Report,41% of homes sold above the original asking price, an all-time high – With 20% being cash, that means over 50% of the deals we can do are going over asking price. Nationwide, nearly 61% of home offers written by Redfin agents faced bidding wars in February.
According to the Real Estate site Clever, 39% of millennials say they would buy a home without viewing it in person beforehand. This just speaks to the demand and mindset that individuals want to own a home and are willing to compromise in order to do so.
Upcoming Events
Tomorrow morning Mortgage Application data will be released from the MBA. Additionally, there will be several Fed members speaking throughout the day and the Fed Minutes from the 3/17 Fed Meeting will be reported at 2:00pm ET.
Technical Picture
Mortgage Bonds have started to break above the 25-day Moving Average ceiling of resistance, but it is not a convincing break just yet. If this level is broken, there is significant room to the upside. But if this level holds, Bonds could be pushed back down to the 102.63 support level.
The 10-year has moved down to 1.65% and could move to the next floor at 1.61%.
Position
Floating
