Vital Statistics: Stocks are flat this morning on no real news. Bonds and MBS are flat. Only about 2% of homeowners are underwater (i.e. negative equity), according to CoreLogic. âWhile U.S. home equity is now lower than its peak in the second quarter of 2022, owners are in a better position than they were six months ago, when prices bottomed out,â said Selma Hepp, chief economist for CoreLogic. âThe 5% overall increase in home prices since February means that the average U.S. homeowner has gained almost $14,000 compared with the previous quarter, a significant improvement for borrowers who bought when prices peaked in the spring of 2022.â The MBA released a white paper on the profitability of smaller mortgages. Since a lot of the costs to originate are fixed, the margins on these loans are usually smaller, although there is some increase in gain on sale if the originator can sell spec pools. The government would like to see more small loans to increase access to housing, but the cost barrier issue is a major problem. It would follow then than that originators that do the biggest loans make the most money. It turns out that this isnât always the case. In strong markets (like 2021) that is true, however in weak markets (2022), the originators that make the smallest loans performed the best (albeit still losing money). Not mortgage-related, but something to watch: The markets seem to be in a battle over how much the labor market is weakening (or not). An interesting barometer of that will be the negotiation between the United Auto Workers and the automakers. The bid / ask spread is pretty wide, and it will be interesting to see which side prevails. GM is offering a 16% increase in wages over the life of the contract, of which some will be hourly increases and some will be lump sum payments. The union wants a 40% increase in hourly pay, a 32-hour workweek, a return to defined benefit pensions, an elimination of compensation tiers, and a return to annual cost-of-living adjustments. The unionâs demands would increase the cost of each worker to $150 / hour. The current contract expires on September 14. If the union gets most of what it wants, that will be a tell that rising labor costs arenât going anywhere and it will be a justification for a longer period of higher rates. If we have a strike, it will dampen economic growth going into the end of the year, depending on how long the strike lasts. Note that Las Vegas hospitality workers will vote on a strike on September 26. Since the labor market for food and hospitality workers is super-tight, this will be another one to watch. I am accepting ads for this blog if you would like to make an announcement, highlight something your company is offering or want more visibility. I also offer white-label services which give you the ability to use this content for your own daily emails. The blog has over 5,000 followers and an open rate around 50%. Please feel free to reach out to nyitray@hotmail.com if you would like to discuss this further. [Image] Here are Some More Investing Tips and Resources. Enjoy! Sponsored [Morning Report: Negative equity only affects about 2% of homeowners]( Vital Statistics: Stocks are flat this morning on no real news. Bonds and MBS are flat. Only about 2% of homeowners are underwater (i.e. negative equity), according to CoreLogic. âWhile U.S. home equity is now lower than its peak in the second quarter of 2022, owners are in a better position than they were six months ago, when prices bottomed out,â said Selma Hepp, chief economist for CoreLogic. âThe 5% overall increase in home prices since February means that the average U.S. homeowner has gained almost $14,000 compared with the previous quarter, a significant improvement for borrowers who bought when prices peaked in the spring of 2022.â The MBA released a white paper on the profitability of smaller mortgages. Since a lot of the costs to originate are fixed, the margins on these loans are usually smaller, although there is some increase in gain on sale if the originator can sell spec pools. The government would like to see more small loans to increase access to housing, but the cost barrier issue is a major problem. It would follow then than that originators that do the biggest loans make the most money. It turns out that this isnât always the case. In strong markets (like 2021) that is true, however in weak markets (2022), the originators that make the smallest loans performed the best (albeit still losing money). Not mortgage-related, but something to watch: The markets seem to be in a battle over how much the labor market is weakening (or not). An interesting barometer of that will be the negotiation between the United Auto Workers and the automakers. The bid / ask spread is pretty wide, and it will be interesting to see which side prevails. GM is offering a 16% increase in wages over the life of the contract, of which some will be hourly increases and some will be lump sum payments. The union wants a 40% increase in hourly pay, a 32-hour workweek, a return to defined benefit pensions, an elimination of compensation tiers, and a return to annual cost-of-living adjustments. The unionâs demands would increase the cost of each worker to $150 / hour. The current contract expires on September 14. If the union gets most of what it wants, that will be a tell that rising labor costs arenât going anywhere and it will be a justification for a longer period of higher rates. If we have a strike, it will dampen economic growth going into the end of the year, depending on how long the strike lasts. Note that Las Vegas hospitality workers will vote on a strike on September 26. Since the labor market for food and hospitality workers is super-tight, this will be another one to watch. I am accepting ads for this blog if you would like to make an announcement, highlight something your company is offering or want more visibility. I also offer white-label services which give you the ability to use this content for your own daily emails. The blog has over 5,000 followers and an open rate around 50%. Please feel free to reach out to nyitray@hotmail.com if you would like to discuss this further. [Continue Reading...]( [Morning Report: Negative equity only affects about 2% of
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