mortgages

Today’s post is a potpourri of events I am seeing from around the world that impinge on macro. Europe. As expected, European consumer price inflation came in at 0.5% following the unexpected dip in German inflation. I believe the ECB will…

Topics for today: Tail risk from Ukraine is increasing, giving rise to investment opportunity Argentina is still a basket case US housing will not add appreciably to a US growth acceleration I think the big news in the markets is…

For years mortgage rates on "jumbo" loans have been higher than for traditional (conforming) mortgages. Since jumbo loans were larger than the upper limit permitted to be packaged and sold to Fannie and Freddie, banks would typically charge…

Fitch, the ratings agency, has reversed itself on Canada. It now believes that the housing market there is poised for only modest declines at worst. Previously, Fitch had said that Canada’s housing market was well overpriced and that a…

The latest flow of funds data from the US Federal Reserve show that the great American household deleveraging may be over. This should add a credit accelerator to the US economy which maintains growth. Meanwhile analysts are increasingly…

At its current pace the Fed is taking about half a trillion of MBS securities out of the market. In fact the Fed is now removing more than 100% of the paper that is being issued.

The recent increase in long-term rates is causing major changes in the mortgage markets. Here are some key trends

While the US housing market remains relatively robust, it is likely to face a couple of headwinds going forward. One is the lower affordability index. The other is the recent slowdown in net household formation.

With wages stagnant, the proportion of income going into rent is on the rise. While homeowners have been able to reduce their monthly payments to the lowest level in decades via mortgage refinancing and cutting back on credit card usage,…

So imagine you are a moderate FOMC member. This is the economic situation you face and the trade-offs in terms of policy tools.