Weekly Round-Up #7

Weekly Roundup – November 12th, 2021

Urgent, incisive, and actionable insights concerning NorCal CRE. Curated weekly by Sparacino Realty.

A little chaos, a little consistency. Inflation hits a three-decade high of 6.2%, but mortgage rates stay stuck in the mud for the first time, well, ever. Weekly initial unemployment claims continue to decrease along with mortgage delinquencies. Bill McBride brings his crystal ball out to try and sift through the contradictions in the housing market and concludes that inventory will tell the tale. Oh, and the Sierra Nevadas got some snow, but you probably didn’t need me to tell you that.

For the first time ever, mortgage rates plunge as inflation soars

Contradiction? Chaos? Perhaps. Unbounding uncertainty? Without a doubt. 

Freddie Mac’s 30-year fixed plunged 11 basis points this week to 2.98%, even as the nation’s inflation rate spiked to 6.2%. When was the last time this happened? Well, never. Mortgage rates typically move up with inflation; that’s almost a science. So, how did this historic kerfuffle happen? “The world is awash with cash, which is holding down mortgage rates,” said Mark Vitner, senior economist at Wells Fargo Bank. Read more in The East Bay Times.

Rent Payments Slip a Bit for Apartment Residents in November

In a survey of 11.8 million professionally managed apartment units across the country, The National Multifamily Housing Council’s Rent Payment Tracker revealed 78.2% of apartment households made a full or partial rent payment by November 6th. However, be warned that this doesn’t show the whole story, as many factors affect how rent data is distilled. Encouraging publicly traded rental housing REITS show their residents are on firm financial footing. (GlobeSt)

Loan Performance Insights

The CoreLogic Loan Performance Insights report offers an interactive view of their mortgage performance analysis. To monitor mortgage performance, CoreLogic examines all stages of delinquency and transition rates that indicate the percentage of mortgages moving from one stage of delinquency to the next. The main takeaway from this report? Employment growth is slower than anticipated, but mortgage delinquencies are declining. Give it a glance here.

Inventory will Tell the Tale

With so many contradictory stories flooding the news, it’s been challenging to make any predictions about the health of the housing market. Will house prices go south, or is it just price growth at risk of slowing? Does the US actually have a housing shortage? Will the housing market be brought to an unceremonious halt if mortgage rates rise to 4%? Bill McBride believes inventory will tell the tale. Here’s why

Consumer Price Index Summary

For all my readers that love the numbers: I give you the Bureau of Labor Statistics’ Consumer Price Index Summary. 

Here’s the primary sound bite: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9 percent in October on a seasonally adjusted basis after rising 0.4 percent in September. Over the last 12 months, the all items index increased 6.2 percent before seasonal adjustment. If you want the unabridged-extended-dance-mix, view the whole report here.

Weekly Initial Unemployment Claims Decrease to 267,000

Everyone’s favorite weekend read –– the Department of Labor’s Unemployment Insurance Weekly Claims Report –– is out again. Last week’s report was encouraging, and the trend continues this week: the advance figure for seasonally adjusted initial claims was 267,000, a decrease of 4,000 from the previous week’s revised level. This represents the lowest instance of unemployment claims since March 2020. Here’s to hoping we stay on this course.

Bonus: Winter is Coming 

Though it was no blizzard, the Sierra Nevadas caught a healthy amount of snow during this week’s storm. Around 6 inches dropped on Palisades Tahoe, Sugar Bowl, and Bear Valley ski resorts between Monday and Tuesday mornings –– who’s ready for ski season? (The Sacramento Bee)

Past Insights

Taking a break from Commercial Real Estate Brokerage

Hi All, I dislike it when people don’t keep up on blogs.  I am an offender in my own eyes and I apologize to you, the reader if you feel the same way.  The truth is that I’ve decided to..

Read More

US Housing Affordability Worsens to New Record Low on High Rates

Interesting article from Bloomberg about housing affordability in the US. See the link here.

Read More

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