Mortgages have surged to their highest level since October 2008.
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But back then, there was a near-universal optimism about home prices, which made way for unreasonably lax lending practices and high-risk financial innovations that made the towering mortgage market much more fragile than many experts believed.
Things are very different today.
First, lenders have been much more disciplined with their lending practices. According to New York Fed data, the vast majority of new mortgage loans in recent years have gone to prime borrowers with the highest credit scores. |
|  | Image courtesy Sam Ro |
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Second, adjustable rate mortgages are nowhere near as popular as they were during the housing bubble. This means very few new buyers are vulnerable to interest rate volatility. |
|  | Image courtesy Sam Ro |
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Third — and this is related to the chart above — about 99% of outstanding mortgages have a locked-in rate that’s lower than the current market rate, according to Goldman Sachs analysts. In other words, the vast majority of homeowners are not materially affected by rising mortgage rates. |
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| Note: Data is as of the time of opening this email. To view real-time markets data click here. |
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What to Watch Today | Economy - 8:30 a.m. ET: Durable goods orders, August preliminary (-0.3% expected, -0.1% during prior month)
- 8:30 a.m. ET: Durables excluding transportation, August preliminary (0.2% expected, 0.2% during prior month)
- 8:30 a.m. ET: Non-defense capital goods orders excluding aircraft, August preliminary (0.2% expected, 0.3% during prior month)
- 8:30 a.m. ET: Non-defense capital goods shipments excluding aircraft, August preliminary (0.3% expected, 0.5% during prior month)
- 9:00 a.m. ET: FHFA Housing Pricing Index, July (0.0% expected, 0.1% during prior month)
- 9:00 a.m. ET: S&P CoreLogic Case-Shiller 20-City Composite, month-over-month, July (0.20% expected, 0.44% during prior month)
- 9:00 a.m. ET: S&P CoreLogic Case-Shiller 20-City Composite, year-over-year, July (17.10% expected, 18.65% during prior month)
- 9:00 a.m. ET: S&P CoreLogic Case-Shiller U.S. National Home Price Index (17.96% during prior month)
- 10:00 a.m. ET: Conference Board Consumer Confidence, September (104.5 expected, 103.2 during prior month)
- 10:00 a.m. ET: Conference Board Present Situation, September (145.4 during prior month)
- 10:00 a.m. ET: Conference Board Expectations, September (75.1 during prior month)
- 10:00 a.m. ET: Richmond Fed Manufacturing Index, September (-10 expected, -8 during prior month)
- 10:00 a.m. ET: New Home Sales, August (500,000 expected, 500,000 during prior month)
- 10:00 a.m. ET: New Home Sales, month-over-month, August (-2.2% expected, -12.6% during prior
Earnings - Blackberry (BB), Cal-Maine Foods (CALM), Cracker Barrel (CBRL), Jabil (JBL)
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