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REIT Dividend Hike • Fed Speak • Week Ahead Real Estate Daily Recap: https://lnkd.in/egpFx8RR Following a busy slate of inflation data last week, the state of the housing market will be the primary focus in the week ahead. The most "Fed sensitive" major economic segment, the outlook for the long-sluggish housing sector has brightened in recent weeks as mortgage rates appear set to moderate just in time for the critical peak selling season. Consistent with the downbeat starts and sentiment data this past week, however, home sales data this week is expected to show the negative effects of the rate resurgence in April. On Wednesday, Existing Home Sales data is expected to show an annualized sales velocity of 4.2M in April - up from the three-decade low of below 4M in late 2023, but still considerably below the typical 5.0-5.5M range seen in the pre-pandemic period from 2015-2019. On Thursday, we'll see New Home Sales data, which is expected to show a 680k annualized sales pace in April - a pace that is within the "normal" pre-pandemic range of 600-700k. Results from homebuilders have demonstrated that there exists a base level of "nondiscretionary" demand for new homes - particularly as supply levels across the single-family sector remain historically tight. On Thursday, Jobless Claims data will be in focus following two straight weeks of negative surprises, and we'll also see a flurry of business survey data via S&P's PMI metrics for May and regional reports from the Chicago Fed and Kansas City Fed.

Shutdown Warning • Yields Jump • Week Ahead https://lnkd.in/eqpMdmVD U.S. equity markets rebounded Monday following their worst week since March, but bond markets remained under pressure amid a continued surge in benchmark interest rates, worsened today by a warning from Moody's that a government shutdown would be "negative" for the US' credit rating. The state of the U.S. housing market remains in focus in the week ahead. We'll see New Home Sales data on Tuesday, which is expected to show an annualized sales rate of 700k in August - up from the 2022 lows of around 550k but well below the peak velocity of over a million units in late 2020. The largest single-family homebuilders have, so far, been able to cope with multi-decade-high mortgage rates by leveraging their platform's scale to offer more attractive financing options than what's currently available for prospective homebuyers in the traditional existing home sales market. We'll also see home price data on Tuesday via the Case Shiller Home Price Index and Pending Home Sales data on Thursday. Historically low inventory levels have kept a floor on home values this year despite the surge in mortgage rates, and, while national home prices have been flat since last May, several markets have seen double-digit price declines in that time. The most closely-watched report of the week comes on Friday with the PCE Price Index - the Fed's preferred gauge of inflation - which is expected to show a year-over-year increase of 3.5% - up from last month but down sharply from the 7.0% rate seen a year ago. Seeking Alpha | The Daily REIT Beat Newsletter | REIT Academy & The Executive REIT Masterclass | #REITs #Dividends #Investing #Income #Yield #RealEstate #Housing #Stocks #Bonds #HighYield #DividendInvesting #IncomeInvesting #Diversification #Inflation #realassets #investment

Rally Continues • REITs Lead • Week Ahead https://lnkd.in/darqEERD The economic calendar slows down in the holiday-shortened week ahead. U.S. markets will be closed on Thursday for the Thanksgiving holiday and will close at 1 pm ET on Friday. On Tuesday, we'll see Existing Home Sales data, which is expected to show a slowdown in sales velocity in October to a 3.93M annualized rate, which would be the second slowest month for home sales since 1995, eclipsed only by one month - August 2010 - at the depths of the GFC-induced slowdown. Despite the sales slowdown, housing inventory levels have remained near historically low levels this year due, in part, to the "lock-in" effect on existing mortgages and from the counterproductive slowdown in home building, which has kept a floor on home values and rental rates despite the stiff affordability headwinds. We'll also be watching Jobless Claims data on Wednesday to see if recent signs of labor market softness persist after Continuing Claims rose this past week to the highest in nearly two years. We'll also be watching the second look at November Michigan Consumer Sentiment data on Wednesday and PMI data from S&P Global on Friday. REIT Academy & The Executive REIT Masterclass | The Daily REIT Beat Newsletter | #REITs #Dividends #Investing #Income #Yield #RealEstate #Housing #Stocks #Bonds #HighYield #DividendInvesting #IncomeInvesting #Diversification #Inflation #realassets #investment

UMBS opened the day down 15 bps. S&P futures down 34.5 points. Bonds got hammered yesterday after a lousy bond auction of 5-year notes, which sent the 10 year yield back above 4.5% to end at 4.55%. Bonds and MBS are weaker again today. Despite opening flat and briefly moving into positive territory, it's been a bad morning for bonds with the longer end of the yield curve quickly slipping to even weaker levels. There are no individual, overt motivations in terms of data, news, or events. There was a comment about stagflation risk from JPM's Dimon, but that's about it. Minneapolis Fed President Neel Kashkari isn't ready to start thinking about rate cuts yet, and warned about the possibility of another rate hike in an interview with CNBC yesterday. “Many more months of positive inflation data, I think, to give me confidence that it’s appropriate to dial back…" Home prices rose 6.6% in the first quarter of 2024 compared to the first quarter of 2023. “U.S. house prices continued to grow at a steady pace in the first quarter,” said Dr. Anju Vajja, Deputy Director for FHFA’s Division of Research and Statistics. Home prices hit a new all-time high, according to the Case-Shiller Home Price Index. Regionally, the Northeast remains the top performer with an 8.3% annual gain, showcasing robust growth compared to other metro markets. Conversely, cities like Tampa, Phoenix, and Dallas, which saw top-tier performance in 2020 and 2021, are now growing at a slower pace. COVID was a boom for Sunbelt markets, but the bigger gains the last couple of years have been the northern metro cities. Consumer confidence improved in May, according to the Conference Board. “Confidence improved in May after three consecutive months of decline,” said Dana M. Peterson, Chief Economist at The Conference Board. The present situation index remains well above the expectations index. Fewer people thought jobs were hard to get and expectations improved slightly. That said, the expectations index remains firmly mired in recessionary territory, with inflation expectations increasing from 5.3% to 5.4%. Note that inflationary expectations are a key input to Fed decision-making since there are all sorts of ancillary behavioral effects that go along with it. If Float, cautiously

Don’t you hate people who use big words just to make themselves look perspicacious? Yes, last week’s FOMC meeting was the highlight of an otherwise quiet economic calendar. As expected, the Committee left the fed funds rate unchanged, and the policy statement was nearly the same word-for-word as the prior one. At his press conference, Fed Chairman Powell struck a dovish tone and markets reacted favorably. The FOMC’s Summary of Economic Projections (dot plot) showed the median expected fed funds rate at the end of the year remained at 4.6 percent, or three rate cuts. However, the distribution did change as half the members predicted only two cuts or less. The committee also saw little chance of a recession this year, as the GDP projection increased to 2.1 percent from 1.4 percent in the previous forecast. Fed funds futures now see the first 25 basis point cut coming in June as the most likely outcome, while pricing in longer dated contracts suggest that three 25 basis point cuts are likely this year, in-line with the Fed’s revised dot plot. Economist Larry Summers last week criticized the Fed for having “itchy fingers” to cut rates, but this current period is now the second-longest tightening cycle in the Fed’s history. The Fed historically begins cutting rates on average eight months after that last rate hike, only having left rates elevated for longer in 2007 in order to address the real estate bubble. The problem this time around is that (already unaffordable) shelter is driving the inflation issue. If and when the Fed cuts rates, it risks re-igniting house price growth. Conversely, if and when the Fed cuts rates, it should stimulate homebuilding which would help to alleviate the affordability issue. Shifting to lending and home buying, more supply is clearly needed to satiate demand, help stabilize home prices, and get more Americans moving to their next residences. We learned last week that existing home sales jumped 9.5 percent during February to a seasonally adjusted annual rate of 4.38 million, the fastest pace in a year, as lower mortgage rates brought buyers off the sidelines. (Barely) This was down 3.3 percent compared to a year ago. Available inventory increased 5.9 percent. Permits for new single-family construction increased 1.0 percent in February and have been steadily rising over the last year, suggesting builders are looking to increase production in light of favorable sales prospects. The median home price rose 5.7 percent year-over-year to $384,500. First-time home buyers accounted for only 26 percent of sales, which is down from their historical level of 40 percent or so. It is clear the first-time home buyer is priced out of the market. Investors and second home buyers increased their share to 21 percent. Source Rob Chrisman.

Fed Ahead • Homebuilder Confidence • REIT Dividend Hike Real Estate Daily Recap: https://lnkd.in/eHg58c99 Central banks will dominate the headlines in the week ahead. While the Fed will surely hold benchmark interest rates steady at the current 5.5% upper bound at the FOMC Policy Decision on Wednesday, investors will be focused on updated "dot plots" and commentary from Fed Chair Powell for indications on when rate cuts will begin - and how many cuts to expect in 2024. We'll also see a busy slate of housing market data - the sector that has borne the brunt of the Fed's policy shifts. On Monday, we saw NAHB Homebuilder Sentiment data for March, which showed a 3-point improvement in March to 51 - its highest-level since last July - with all three sub-components posting sequential increases. On Tuesday, we'll see Housing Starts and Building Permits data for February, which is expected to show a continued moderation in construction activity amid a still-challenging financing environment for both single-family and multi-family development. We'll also see Existing Home Sales data on Thursday, which is expected to show that sales activity remained near three-decade lows in February. We'll also be watching the CB Leading Index - a composite of ten forward-looking economic indicators - which is expected to post a remarkable 23rd consecutive month of declines, underscoring the unique duplicity observed in the economic data over the past two years. #REITs #Dividends #Investing #Income #Yield #RealEstate #Housing #Stocks #Bonds #HighYield #DividendInvesting #IncomeInvesting #Diversification #Inflation #realassets #investment

Random Holiday Week Movement And Mixed Messages From Fed   MBS Morning       Matt Graham | 11:26 AM Bonds are slightly weaker to start the holiday-shortened week (early close on Friday) and the losses happened to coincide with comments from Fed's Goolsbee pushing back on the market's takeaway from last week's comments from Fed's Williams (i.e. "we're not really talking about rate cuts").  Despite the correlation, there's not a good case for causality here. Instead, we're likely witnessing something that we may see several more times before the week is over: random, holiday week movement driven by year-end positioning along with the lack of volume and liquidity commonly seen in the 2nd half of December. If Fed comments were materially impacting bonds, it would tend to show up more noticeably in Fed Funds Futures. Economic Calendar Forecast Prior Monday, Dec 18 10:00AM - Dec NAHB housing market indx   36 34 Morning News Headlines Eye on Housing - 10:09AM Builder Sentiment Rises on Falling Interest Rates CNBC - 10:09AM Chicago Fed President Austan Goolsbee: We've seen significant improvement on the inflaiton front CNBC - 9:49AM Fed's Goolsbee says he was 'confused' by last week's market reaction Calculated Risk Blog - 9:12AM Housing December 18th Weekly Update: Inventory Down 1.4% Week-over-week, Up 3.0% Year-over-year Mortgage News Daily - 3:49PM Mortgage Rates Stick the Landing After Huge Weekly Drop MBS & Treasury Markets MBS 30YR UMBS 5.5 100.17 -0.06 30YR UMBS 6.0 101.31 -0.08 30YR GNMA 5.5 100.28 -0.20 15YR UMBS-15 5.0 100.19 -0.05 US Treasuries 10 YR 3.952% +0.037% 2 YR 4.457% +0.008% 30 YR 4.064% +0.052% 5 YR 3.945% +0.031% Open Dashboard Share This

5/29/24 WRAP UP UMBS 6.0: 99.69 (-13bps) 10yr yield: 4.62 The Fed's Beige Book today showed that the economy is still plugging along and basically supports the Fed holding steady and not cutting rates yet...didn't have any effect on rates today. Unlikely to see rates turn around and start improving so tomorrow AM could be slightly worse. You may want to lock some risk-averse and near-term closings while floating longer term. ### Daily Market Commentary (5/29 OPEN) Rate sheets today are worse than yesterday's AM sheets, although most lenders did reprice worse as bonds steadily lost ground through the day. Reprice risk today is moderate. Mortgage bonds have been moving steadily lower while the 10yr Treasury yield has been moving steadily higher. Pricing may worsen a lot more this week than I anticipated so I'd suggest considering locking the loans closing near-term while floating the rest. Yesterday, the consumer confidence reading came in much stronger than expected. Then we saw a weak demand for the Treasuries being auctioned. Of course I'm sure it didn't help that Minneapolis Fed President Neil Kashkari was out there spreading Fed doom and gloom, but that wasn't the main driver. Markets are losing hope of seeing Fed rate cuts start in September or that we will see more than 2 cuts this year which is chipping away at mortgage pricing right now. For loans closing in less than 15 days, consider locking. If you missed your chance yesterday, you may still want to consider locking because it could get worse before it gets better. Loans closing in 15-30 can cautiously float. It may prove to be overly optimistic, but rates have been trending up and down based on the latest big data. This week's PCE inflation data may help a little bit on Friday, but it's next week's Jobs data that we are really holding out hope for. Loans closing in 30+ days should float. Although rates are creeping higher, we will see them fall again in time for these loans to wait it out. Technicals: The UMBS 6.0 coupon is at 99.77, -4bps on the day and much worse than we saw last week. Yesterday morning started out pretty good with mortgage bonds starting the day with some gains, but that quickly washed away after pricing came out. The 10yr Treasury yield is at 4.57, jumping yesterday and convincingly breaking through technical support...not a good sign.

Random Strength Replaced by Random Weakness   MBS Morning       Matt Graham | 12:53 PM Yesterday's trading session saw bonds improve in the afternoon despite a complete absence of overt justifications. That's not to say they don't exist--simply that they're not the sort of cut and dried factors like scheduled economic releases, Fed comments, or viral newswires. Today's session is seeing the opposite move for reasons that are just as mysterious. Neither example has been very big, so they're not worth losing sleep over. More importantly, this is exactly the sort of random volatility we expect to see in the 2nd half of December. For many traders, these two days have been the last two days of the year. The net effect of the past two days is that rates have been coasting along a floor of 3.89% in terms of 10s and haven't moved more than a few bps in either direction. Economic Calendar Forecast Prior Thursday, Dec 21 8:30AM - Q3 GDP deflator (%)   3.5% 1.7% 8:30AM - Dec Philly Fed Business Index   -3 -5.9 8:30AM - Q3 GDP (%)   5.2% 2.1% 8:30AM - Dec Philly Fed Prices Paid   14.8 8:30AM - Q3 GDP Final Sales (%)   3.7% 2.1% 8:30AM - Dec/16 Jobless Claims (k)   215K 202K 10:00AM - Nov CB Leading Index MoM (%)   -0.4% -0.8% Morning News Headlines Eye on Housing - 11:56AM Consumer Confidence Surged in December Calculated Risk Blog - 11:35AM ICE: Mortgage Delinquency Rate Increased Slightly in November Mortgage News Daily - 10:45AM TPO, Anti-Valuation Bias Tools; Retail and Broker News; Interview on Home Equity Levels CNBC - 9:46AM Home prices are up in all major U.S. cities, except one: 'The Austin housing market has whiplash,' says economist Calculated Risk Blog - 8:57AM Q3 GDP Growth Revised down to 4.9% Annual Rate Marketwatch - 8:49AM Jobless claims inch up to 205,000. Layoffs in the U.S. hover near record low. CNBC - 8:09AM 10-year Treasury yield falls as investors continue to assess path ahead for rate cuts MBS & Treasury Markets MBS 30YR UMBS 5.5 100.27 -0.16 30YR UMBS 6.0 101.41 -0.09 30YR GNMA 5.5 100.42 -0.14 15YR UMBS-15 5.0 100.17 -0.16 US Treasuries 10 YR 3.879% +0.026% 2 YR 4.347% +0.009% 30 YR 4.020% +0.031% 5 YR 3.868% +0.017%

21 December 2023 P.M. Source(s) : Bloomberg News/ WSJ US equity rally resumed today rally after pulling back yesterday, with major indexes posting gains of around 1.00%. The Dow Jones was up around 320 points, or 0.9% Friday will be a busy day regarding crucial economic data, particularly due to US reports that include the PCE Inflation data, a closely watched inflation indicator followed by the Fed. Also due are the University of Michigan Consumer Confidence Survey, Durable Goods Orders report, and New Home Sales data. ___________ Markets saw data show : Economic data released today showed that initial jobless claims stood at 205,000 in the week ended December 16, a 2,000 increase from the previous week. A new estimate of Q3 Gross Domestic Product (GDP) showed the economy expanded at a 4.9% annualized rate, below the previous estimate of 5.2%. The Philadelphia Fed Manufacturing Index unexpectedly fell to -10.5 from -5.9 in December. ________________ Fixed Income: U.S. Treasuries mixed at the close: * 3mo T-bill yield rose 1.2bps to 5.369% * 6mo T-bill yield rose 0.9bps to 5.289% __________ * 1-year yield fell 1.5bps to 4.845% * 2-year yield fell 2.4bps to 4.354% * 10-year yield rose 1.5bps to 3.894% * 30-year yield rose 1.7bps to 4.037% * U.S. 5-Year CDS remained unchanged * Euro -US $ - 1.1003 Today's U.S. Treasury Auctions: 21 Dec - 4wk T-bill $80 billion @ 5.265% vs previous 5.27% 21 Dec - 8wk T-bill $80 billion @ 5.27% vs previous 5.275% Note : Lowest Mortgage Rates Since 2Q Slowly Start to Thaw Lending Mortgage loan applications have begun to pick up as interest rates fall, yet total loan demand remains near the lowest in almost three decades, as affordability is still limited. Refinancings have finally risen above where they were a year ago _____________ * US Money-Market Funds See Second Straight Week of Outflows Total assets dropped to $5.87 trillion from $5.886 trillion the week prior. * Assets fell to $5.87 trillion in week to Dec. 20: ICI ____________ Stocks : * Dow - Up 322.35 (+0.87%) * S&P 500 - Up 48.40 (+1.03%) * NASDAQ - Up 183.93 (+1.26%) Boeing hands over first 787 Dreamliner to China since 2019 _____________ Oil : West Texas Intermediate crude oil fell $0.30 to $74.03 per barrel amid a shake-up in the OPEC as Angola quit the group. Gold : Gold Advances After Economic Data Revision Points to Rate Cuts * Softer data boosts expectations for Fed rate cuts next year * Tight monetary policy has been a major headwind for metals Gold closes Up $13.12 @ $2,044.55 Crypto : Bitcoin Rallies Back to Near Recent Highs as Bullish Crypto Traders Double Down -- Barrons.com -- 43,768.90USD Up 117.20 (0.27%) - 15:50 in NY AI : (Seeking Alpha) - The AI Race Is Closer Than It Seems * Alphabet Inc. and Microsoft Corporation are both on pace to close out the year right near their highs, but it’s Alphabet Inc. that is closer to a new high. ***************