One segment of the economy continues its “V” shaped recovery and then some. Can you guess what it is?
If you guessed housing, you’re the winner. New Homes Sales, released on Friday, jumped roughly 14% in June and Existing Home Sales are continuing to make up lost ground from the covid-19 shutdown.
The big story here is the lack of supply and record low interest rates as mortgage applications up nearly 20% from a year ago. This combination continues to support home prices and who would have thought that bidding wars would be common in the midst of a global pandemic with an 11% unemployment rate.
The reason for the record low mortgage rates is due to the actions of the Federal Reserve. This brings us to the week ahead which features a Federal Reserve meeting on Wednesday. No policy change is expected here. Speaking of policy, we need to monitor the progress of the stimulus package being put together in DC. Main areas of focus are the enhanced unemployment benefit, stimulus checks, and the overall size of the package.
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