Policy Errors

New Home Sales Rise in December, But Headwinds Mounting

New home sales were a bit better than expected in December. The Census Bureau reported new home sales at a seasonally adjusted annual rate (SAAR) of 811,000 units. Previous months were revised lower. The median price of new home came in at $377,700. The average price of new construction contracted in December was $457,300. New home sales are still suffering from supply constraints. Completed inventory remains very low while the number of units technically for sale remains very high. Looking at unadjusted numbers out of the 408,000 homes "for sale" at the end of December [...]

Hoisington Quarterly Review: Parallels of Past Fed Mistakes

Hoisington Investment Management has released their latest Quarterly Review, and it's certainly worth a read if you want to understand the Federal Reserve's capitulation on policy normalization and the stagnating global economy. The global economic slowdown should really not be surprising considering the massive amounts of stimulus by global central banks which have resulted in massive amounts of debt and economic bifurcation. The problem with quantitative easing and all of the central bank intervention is that liquidity has not not been used for productive, organic growth. As the debt keeps piling up, the economic benefit [...]

Denton County Real Estate Market Gets Lift From Crashing Yields, Lower Rates

The Denton County real estate market is getting a much-needed lift going into the spring selling season. That lift is coming courtesy of crashing bond yields and a drop in mortgage interest rates. Lower interest rates were desperately needed to stimulate a stagnating housing market. The Freddie Mac Primary Mortgage Market Survey confirmed today what many have been expecting.... a continued drop in mortgage rates. Freddie Mac's index just posted the biggest one-week drop in a decade. If the economy continues to slow, 3 percent mortgage rates could be in play again. That could be [...]

Powell Keeping Federal Reserve’s Waffle House Open For Business

Not more than two weeks after he was touting the strength of the U.S. economy and how we are in such a good place, Fed chairman Jerome Powell, tossed out a slightly dovish speech to the audience at the Economic Club of New York. The title of the event was the 'Federal Reserve's Framework for Monitoring Financial Stability'. They could just as easily called it sticking your finger up in the air to see which way the wind is blowing. While tossing out the typical central banker sound bites, Powell continued the long standing Federal [...]

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