In one week the 30-year mortgage went from 5.5% to 6.2%:
https://www.cnbc.com/2022/06/14/30-year-mortgage-rate-surges…
Related I’ve already started seeing homes in our neighborhood start to drop their asking price. Last home I saw was a 5% drop in asking price. I think we’ve hit a real estate top.
Fortunately Cathie Wood just said we are nearing a bottom. I mean… the odds of her being wrong? …
bjurasz
Glad I re-financed at 2.75%, which was less than 2 years ago.
I wonder when savings rates will go up much ?
Currently at my CU: 6month CD: 0.42%, 1 year CD: 0.52%, 2 year CD: 0.75%, 5 year CD: 1.2%
Pretty big spread between what they’ll pay a saver, and what a borrower will pay them, lol.
bj,
I agree with Cathy Woods. We are within two to three months of a bottom.
I am beginning to think the Chinese crush in their economy wont matter much to us.
But we will drag out our bottom for many months.
“Pretty big spread between what they’ll pay a saver, and what a borrower will pay them, lol.”
Uhhh; that’s how they make their money!
JimA
I wonder when savings rates will go up much ?
Not until the excess cash in the economy has been removed. Bank deposits are a liability. Banks don’t want more of them right now, which is why deposit rates are likely to remain low for a long time.
Bank deposits are a liability.
Yes, but they’re also key to meeting capital reserve requirements…
Yes, but they’re also key to meeting capital reserve requirements…
They don’t need more to meet those reserves. From last month:
Bank balances surged during Covid even as pandemic-era stimulus ended, BofA CEO says
https://www.cnbc.com/2022/05/23/bank-balances-surged-during-…
And from 4 days ago:
https://fred.stlouisfed.org/series/DPSACBW027SBOG
Banks have roughly 40% more cash on deposit today than they did when Covid started. It just recently peaked and started to go back down. If you follow the trend line prior to Covid, there is probably still $3 trillion in excess cash in bank accounts.
If you follow the trend line prior to Covid, there is probably still $3 trillion in excess cash in bank accounts.
But how much of that trend line includes bonds the Fed won’t be rolling over?
But how much of that trend line includes bonds the Fed won’t be rolling over?
None.
BOA doesn’t hold those bonds, the fed does.
Also, “Deposits, All Commercial Bank” doesn’t include what the fed has.
Here is food for though. Personal income actually went up in 2020 (by over 6% no less!) - entirely due to the federal distribution of monies directly to taxpayers - and much of that unwarranted (i.e. people retired and on SS received free money when they didn’t need it).
That is a lot of excess cash in the economy.
https://www.bea.gov/news/2021/personal-income-county-and-met….
Per capita personal income. In the metropolitan portion of the United States, per capita personal income—personal income divided by population—increased 6.0 percent in 2020, up from 3.6 percent in 2019. In the nonmetropolitan portion of the United States, per capita personal income increased 7.7 percent, up from 3.6 percent.