Current position: Carefully Floating
Stocks are higher and mortgage bonds are lower on news that OPEC+ will be cutting oil production.

Oil Production Cut
OPEC+ members announced that they will make another production cut, this time by 1.16 million barrels per day. This appears to be retaliation for the US failing to live up to its promises to refill the strategic petroleum reserve once oil prices went down to $70 per barrel.
This is not great for inflation, and bonds are responding negatively. Some analysts are calling for $100 per barrel again.
Low Inventory
Active listing data was just released for March, showing there are only 563,000 listings in the US. Active listings are up about 60% from the all-time low in February 2022, when there was nothing out there, but if you were to compare current levels to pre-pandemic and more normalized levels, they are about half that.
This will be supportive of home prices, especially as rates come down, as evidenced in the Black Knights report.
Black Knight Home Price Index
Black Knight reported that home prices rose 0.2% in February, which is the first monthly gain since home prices reached their peak last June. Diana Olick did her best to temper the report, saying that after a "sharp" decline, home prices rose in February. However, the report shows that home prices are now down 2.6% from their peak, a far cry from a housing bubble or a sharp decline.
Case Shiller is showing that home values are down 2.6% from the peak as well, while FHFA is showing 0.6%, removing the cash buyer discounts.
The number of homes available for sale fell in February for the fifth straight month to the lowest level since May of last year, according to Black Knight. The new listings were 27% lower than their pre-Covid pandemic levels.
Realtor.Com Data
You hit a bottom in inventory towards the beginning of the year, but as you head into the spring months, you see a restocking of inventory. On a month-over-month basis, historical norms call for about a 17% increase in inventory, but we only saw 12% this year, which means less inventory.
The most recent Existing Home Sales Report showed that the annual pace of sales was at 4.6 million.The last time we saw that level of sales was back in September, when inventory levels were 23% higher than they are today. This is another reason to believe that home prices will be well supported going forward, especially if we see rates come down as we expect.
This Week
Tuesday: JOLTS
Wednesday: Mortgage Apps, ADP Employment Report
Thursday: Initial Jobless Claims, Challenger Job Cuts
Friday: BLS Jobs Report
Technical Analysis
Mortgage Bonds are trading in a familiar range between support at the 100.758 Fibonacci level and overhead resistance at the 200-day moving average. Bonds will likely tread water in this range until we get some likely market-moving jobs data later in the week.
The 10-year is once again testing its 200-day moving average and is starting to break beneath it. If this move is confirmed, there is a lot of room for improvement on the downside. Begin the day carefully floating.
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