Newsletters & Vlogs

Market Update as of 1.30.2024

Home Price All-Time High and JOLTS Bounce

Good morning and happy Tuesday.  Rates are about the same as yesterday with MBS down 12bp and the 10-year Treasury up 1bp.  Stocks and Mortgage Bonds are both lower to start the day, pressured by stronger Consumer Confidence and Job Openings.


​Full Update


Consumer Confidence


The Conference Board reported that Consumer Confidence rose from 108 to 114.8 in January, which is the best level we have seen in two years.  The Present situation surged from 147 to 161.  A likely mason why confidence has moved up is the rise in Stocks and inflation rates decelerating. This \l\las a negative for the Bond market.  




This morning the JOLTS report, showing job openings in December, rose from 8.925M to 9.026M, which was stronger than expectations.  It's amazing to see this figure rise when we are seeing most high profile companies announcing layoffs, including UPS today.


As we have covered in the past, this is a flawed figure as there is a ton of double counting because of work from anywhere and multiple postings of the same job in different states, as well as different role titles/salaries for the same job.

In December the number of hires rose, with the hiring rate rising from 3.5% to 3.6%.  The number of quits was similar to November, with the quit rate remaining at 2.2%, signaling that there is less hiring and jess poaching of employees from competitors.


Within the report, the biggest contributor to openings was professional and business services, adding 239k.  Education and health services added 73k.  Leisure and Hospitality lost 131k job openings, which has been a leader of job growth.

Treasury Refunding Announcement  

Yesterday, yields moved lower after the Treasury announced it's Q1 refunding needs.  The Treasury plans to borrow and issue $760b, which was $558 less than estimates of $815b last fall.


I'm  guessing part of the reason for the lesser estimate is that the Treasury General Account is near its recent highs and Yellen will tap this rather than via more borrowing. There is also political maneuvering on the part of Janet Yellen in wanting not to spook the Treasury market.  We'll hear in coming days the complexion of the issuance in terms of maturities and I'm sure again Yellen will tilt to the short end.


Case Shiller Home Price Index

The Case Shiller Home Price Index, which is the "gold standard" for appreciation, showed that home prices rose 0.2% in November.  Home prices have been on the rise since January and are now up 5.2% from last year.  Case Shiller is continuing to set new all-time highs in home prices as of July.  This index is on pace for 6% appreciation this year, but remember we only have the data through November so far, so the final December reading could influence the pace slightly.

Six cities registered a new all-time high in November, including Miami, Tampa, Atlanta, Charlotte, New York, and Cleveland.  But all of the areas around the county are participating - This month's report revealed the narrowest spread of performance across the nation since the first quarter of 2021.


FHFA House Price Index

The FHFA (Federal Housing Finance Agency) released their House Price Index, which measures home price appreciation on single-family homes with conforming loan amounts. Different than Case Shiller, it docs not include cash buyers or jumbo loans.  The FHFA reported that prices rose 0.3% in November and are up 6.6% year over year.  FHFA has continued to set new record highs in home prices every month since February of this year.


FHFA is showing that homes are on pace to appreciate at 7% through in 2023 through the first eleven months.


Apartment List Rental Report


Apartment List released its January Rental Report, showing hat new rents fell 0.3% during the month and are down 1% year over year.  This is the sixth monthly drop in a row and should translate to lower shelter costs in the inflation reports we receive from CPI and PCE, which would be a big benefit for lower inflation.  We have not seen that yet, as the latest CPI data showed rental costs rise by 0.5% in December.  CPI also includes renewal rents, but CoreLogic is reporting that blended rents are only going up 2.7%.  The lag is due to how the CPI and PCE pull the data, but we are expecting them to update
these figures in the March/April reports.


Eurozone GDP


Recessions are often synchronized around the globe, so it's important to check in on how other nations are growing across the globe.  The Eurozone is clearly slowing down and nearing a recession - In Q4 growth was flat and follows a slight decline in Q3.  This is something to follow, as it can influence the US because often times recessions around the globe are synchronized.  And remember that if we do see recession like conditions here in the us, they typically lead to lower rates.


This Week

Wednesday: Mortgage Apps, ADP Employment Report, Treasury Refunding Announcement, Fed Meeting
Thursday: Initial Jobless Claims, S&P Global Manufacturing, ISM Manufacturing
Friday: BLS Jobs Report 

​Please let me know if you have any questions. Have a blessed day!




Credit:  Josh Sun

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