15 Degrees Last Night in Austin, TX
This has nothing to do with mortgages, but I have to share it because I find it so interesting. Austin saw a low last night of 15 degrees – which is amazing given that Austin is hundreds of miles SOUTH of cities like Phoenix and Los Angeles that never see temperatures like that.
But – what is even more interesting is that it will be back up to 70 degrees in Austin in only a few days. As most Texans know, Texas weather varies so much from day to day because of its geographical location, as warm fronts from the Gulf constantly do battle with cold fronts from the North.
This week the North is winning, but next week the South plans a serious comeback.
Inflation Down – As Barry Predicted
A very encouraging inflation report surfaced today, as the PCE (Personal Consumption Expenditures) index showed that the rate of inflation is clearly slowing down – exactly like macro experts Barry Habib and Jeff Snider have been predicting for over a year now.
And, once again, given how right they have been, and given that they both predict a further decrease in rates – it is very likely that rates will fall further.
SO – WHY DIDN’T RATES FALL TODAY WHEN INFLATION NEWS MOVES RATES MORE THAN ANYTHING ELSE?
Never Underestimate the Ability of Our Politicians to Screw Things Up!
One of the reasons rates did not fall today is because investors are seriously concerned about the inflationary impact of the $1.7 TRILLION spending bill currently getting pushed through Congress – at a time when America is flat broke, upside down, insolvent, and living on borrowed money.
Investors know that much of the spending will simply exacerbate inflation issues and that it will also require even more borrowing – resulting in more bonds being sold with more upward pressure on rates.
The economy is still showing numerous signs of a slowdown though that make a recession all but inevitable – and those forces will continue to bring both inflation and rates down, irrespective of the ineptitude of our politicians.
Housing Inventory: 1.7 Month Supply; Not 8.6 Month Supply
I stole this factoid from Barry Habib’s morning update today. There are 461,000 homes for sale in the U.S. – an ostensible 8.6 month supply (something the media will harp on).
BUT, most of those homes are just “holes in the ground.” There are actually only 64,000 completed homes for sale – which is only a 1.7 month supply.
Once again, inventory remains tight.
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