Who Left The Fridge Open? U.S. Existing Home Sales Fall 8.5% YoY In January, Median EHS Price YoY Declines To 2.8% YoY (Lowest Since Feb 2012 )

The housing market is cooling, both in terms of existing home sales YoY and median price YoY.

(Bloomberg) — Sales of previously owned U.S. homes fell to the weakest pace since November 2015, indicating that the housing market remained in a slowdown despite a drop in mortgage rates.

Contract closings decreased 1.2 percent in January from the prior month to an annual rate of 4.94 million, the National Association of Realtors said Thursday, below economists’ estimates for 5 million. The median sales price rose 2.8 percent from a year ago, the smallest increase since February 2012.

Do I detect a trend in median prices YoY for existing home sales?

medianpriceehsyoy

Existing home sales YoY dropped 8.50% in January, continuing the cooling trend that started in 2017.

ehsyoy

Who left the fridge open?  

 

US Treasury Term Premia Lowest Since 2016 (Hold On, The Fed Minutes Are Coming!)

Hold on. The Fed minutes are coming!

The Federal Reserve’s increasingly clear message that it’s standing pat on rates for now and may also adjust balance-sheet normalization plans has driven the 10-year Treasury term premium even more negative. The measure — a gauge of the extra compensation investors demand to own the maturity compared to rolling over a shorter-dated obligation over the same period — is at its lowest since July 2016, according to Federal Reserve Bank of New York data through Feb. 15. The premium could go lower still, should the central bank’s meeting minutes set for release Wednesday provide any additional confirmation that its policy tightening is on hold.

termprem

Meanwhile, back on the Treasury curve, we await The Fed minutes to see if inversion is coming.

invtradw

Will The Fed soothe us over future tightening?

Gold Rewards Bulls in January as Fed’s Message Wounds Dollar (Gold Vol Remains Subdued)

The Federal Reserve’s “maybe we will, maybe we won’t” regarding further shrinking of its balance sheet coupled with keeping its target rate at 2.50% was celebrated by equity investors … and gold investors (including SPDR Gold Shares).

goldspiders

(Bloomberg) — Gold is poised to close out January with a fourth straight monthly gain after the Federal Reserve signaled it’s done raising interest rates for a while, hurting the dollar, and as investors sought a haven against slowing growth and U.S.-China trade disputes.

Spot bullion traded at $1,321.89 an ounce at 10:33 a.m. in London after hitting $1,323.43 on Wednesday, the highest level since May, according to Bloomberg generic pricing. The precious metal is up about 3 percent this month, while the greenback’s decline in January is the most in a year.

goldbug.png

Gold volatility remains subdued.

goldvol.png

And yes, Powell wounded the dollar.

woundeddollar

Yes, The Fed benefitted equity and gold investors while wounding the US Dollar.

ben-franklin-wearing-bandages-band-aid-black-eye-one-hundred-dollar-bill-photo-illustration-might-32699673

For excellent gold charts and analysis, see Jesse’s Cafe Americain site!

Existing Home Sales Plunge 10.25% In December As Global Economy Is Slips Into Darkness

And no, that was not a seasonal effect. Existing home sales declined 6.4% MoM in December, the largest decline since November 2015.

ehsdec18.png

And on a YoY basis, existing home sales plunge 10.25%.

ehs10

US existing homes are very expensive compared to household income and the surge in mortgage rates during 2018 made housing ever less affordable.

The median price for existing home sales shows a seasonal pattern with June typically being the highest for the calendar year and January being the lowest.

Let’s see how Euro Zone and Japan slipping into darkness impacts the US econony and housing market.

phillip

 

Golden Ticket? China Relief? Fed Tightening Halt? January Effect? S&P 500 Surges In 2019

Central banks are like Willy Wonka to markets offering golden tickets.

We have the People’s Bank of China wildly expanding their repo purchases to stimulate their economy and have just announced massive investments.


pbocrepoinnj

Then we have Trump administration officials \considering measures to roll back tariffs on Chinese products in order to calm financial markets, the Wall Street Journal reported, a report the Treasury Department quickly denied.

Then we have The Fed taking further rate hikes off the table. It sure looks like it!

wirpo.png

Then there is the January effect (not the January Jones effect) where stocks decline at the end of the year only to rise at the beginning of the next year.

eoyjaneffect.png

My bet is on Jerome Powell, The Fed’s own Willy Wonka spreading golden tickets to Wall Street.

theoffice_golden-ticket.jpg

Residential Mortgage Refinancing Applications Spike As Mortgage Interest Rates Decline (Purchase Applications Spike Even More!)

Mortgage applications increased 13.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 11, 2019.

.The Refinance Index increased 19 percent from the previous week to its highest level since March 2018. The seasonally adjusted Purchase Index increased 9 percent from one week earlier to its highest level since April 2010. The unadjusted Purchase Index increased 43 percent compared with the previous week and was 11 percent higher than the same week one year ago.

mbastats011619.png

You can see the spike in refi apps coinciding with a decline in 30-year mortgage rates.

mbarefinsa011619

And you can see an even large spike in mortgage purchase applications with the decline in mortgage interest rates.

mbapnsa011619

Fannie Mae’s 30Y current coupon rate has declined and is lower than it has been for most of 2018.

fnclcc011819