Stocks and Mortgage Bonds are both higher to start the day.
Lending Tree Survey
A recent Lending Tree survey showed consumer’s main reasons to buy a home:
What’s interesting is that appreciation/building wealth is much lower than some of the other reasons, and we believe it’s because they don’t understand how life changing it can be. If they did, it may push them to buy a home now rather than later.
Albert Einstein famously said that the 8th wonder of the world is compound interest, and those that understand it earn it, and those that don’t pay it.
Make sure you are educating your potential customers and using the tools within MBS highway to quantify the financial opportunity in buying a home.
Durable Goods Orders
Durable Goods Orders fell 0.8% in September and the previous report for August was revised lower from 0% to -0.8%.
While that looks very weak, it was all due to transportation. When stripping that out, orders rose 0.4%. Core Durable Goods Orders rose 0.5% and were stronger than estimates of 0.1%.
While Core orders were up, they have been largely flat over the past two years and are almost unchanged from the level we saws in 2022.
Core good shipments, however, fell 0.3% and showed some weakness and was below the 0% reading expected. This could cause the Q3 GDP estimates to be revised lower.
News Next Week
Tuesday: Case Shiller HPI, FHFA HPI, JOLTS
Wednesday: ADP Employment Report, GDP (Q3 First Reading), Pending Home Sales
Thursday: Personal Consumption Expenditures (PCE), Initial Jobless Claims
Friday: BLS Jobs Report
Technical Analysis
Mortgage Bonds are continuing to attempt a rebound, but are now right up against the 200-day Moving Average. If Bonds can get back above this level, there is a lot of room to the upside. If they are rejected, they could retest the 99.18 support level.
The 10-year is down 3bp so far today and is making a run at the 200-day Moving Average support level. If yields can get under this level, they will likely test the 4.126 Fibonacci floor. If yields are pushed higher, there is a lot of room for things to get worse until reaching the 4.33% Fibonacci level.
We must keep a close eye on MBS and yields as they are trying to improve, but are testing key technical levels at their respective 200-day Moving Averages. The news next week will be critical and will determine the near term direction of the Bond market and rates.
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Show clients how they can take advantage of a cash-out refinance or restructure their debt to save them years of mortgage payments, or demonstrate how debt consolidation can bridge the gap in payment differential on a more expensive home. With personal debt balances at an all-time high, use Debt Consolidation to help your clients achieve their financial goals and gain a better position to build wealth for their family.
Demonstrate how delaying a purchase for even a year or two could cost buyers thousands in appreciation, amortization, equity and more. Increase deal flow by showing clients how delaying their purchase could have more of an impact on their long-term wealth than they realize.
