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Mortgage losing steam; Zoom kills, Clubhouse dies; Jobs optimism 😀

By May 11, 2021 No Comments

Is the mortgage market losing steam? Yes. Yes, it is.

The housing market is as hot as ever. 

The mortgage market, though, is losing steam, according to this metered paywall article in the Wall Street Journal.

Homes are selling at a blistering pace unseen since before the financial crisis, pushing up home values in nearly every U.S. ZIP Code. Yet lenders are preparing for mortgage demand to cool in the coming months, the result of rising interest rates that make refinancing less attractive for a huge chunk of borrowers.

The anticipated decline in mortgage volume is setting off price wars across the industry. That is driving down profit margins and spooking the shareholders of mortgage firms that went public closer to the height of the lending boom.

And it’s a really bad time for the tables to turn for private mortgage insurer Enact Holdings.

According to Renaissance Capital, in what is going to be the largest IPO deal of the week, Enact Holdings (ACTplans to raise $497 million at a $3.6 billion market cap

Being spun out of Genworth Financial, Enact is a leading private mortgage insurance company in the US, with a 17% share of the market in 2020. 

The company saw a 60% increase in new insurance written during the year, though COVID-19 has caused higher delinquencies and losses.

Enact is entering a very competitive and unstable market. As the WSJ reports, Rocket’s stock price fell nearly 17% to $19.01 the day after the company’s earnings report.

Shares of UWM Holdings Corp. closed at a record low last week after Rocket’s earnings. UWM, the country’s largest wholesale lender, reports first-quarter results Monday.

Home Point Capital Inc. shares fell close to 18% Thursday after the company said its wholesale-lending business broke even in April.

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Here’s what Zoom killed inside of us; Is Clubhouse dying?

For almost half of all Americans, modesty may not be their best quality, as a new study finds nearly one in two people believe they’re the best person they know.

And maybe it’s down to the fact that after a year after speaking on Zoom, we’ve all died a little inside and took our opinions of others with it.

According to the WaPo, Zoom has killed our ability to have a proper conversation.

That’s because, that style of conversation — a freewheeling ebb and flow where people interrupt one another — is much harder to pull off in the video communications necessitated by the coronavirus pandemic. 

“Suppose someone is speaking and another person, eager to express agreement, chimes in at the end of their sentence,” the article states. “Over Zoom, this tends to derail the discussion or narrative: Rather than a relatively smooth interruption, as might happen face-to-face, the attempt to talk creates moments of “Oh, no, you go ahead.”

Awkward lengthy pauses are common. Then there’s the turn-waiting, known from everyone’s school days as raising your hand.

And conversation-centered technological troubles don’t end there.

Clubhouse’s short time as the darling of the mortgage industry may be coming to an end as the BBC is reporting the app’s days in the sun may be numbered.

Clubhouse had about 13.4 million users in late March, according to research company App Annie.

But after peaking in February, with 9.6 million downloads, it had had just 2.7 million in March and 900,000 in April, mobile-app-store analysts Sensor Tower said.

But this shocking decline may not be the death knell some think it is. Enders Analysis technology head Joseph Evans said: “Clubhouse is still invite-only, so they are not judging success by how many people are using it.”

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With Josh Pitts & Jacob Gaffney

April’s terrible jobs report shouldn’t derail 2021 optimism

Good news!

As reported in Rise&Shred, the recovery of America’s job market hit a pause last month as many businesses — from restaurants and hotels to factories and construction companies — struggled to find enough workers to catch up with a rapidly strengthening economic rebound.

Employers added just 266,000 jobs in April, sharply lower than in March and far fewer than the MILLIONS OF JOBS economists had expected.

However, the numbers are not concerning to Kristina Hooper, Chief Global Market Strategist at Invesco.

In her most recent LinkedIn post, Hooper said, “Many people don’t know what to think about the jobs report. Is it a sign that the economic recovery is stalling? I say definitely not, given that we are seeing so many other signs of an economic recovery.”

In past Rise&Shreds, we’ve talked about how there’s a shortage of workers nationally. And that, once unemployment benefits run out, many will return to the workforce. 

But Hooper thinks there’s more to it.

“I think the situation is more nuanced — that there are additional reasons why there is a scarcity of available labor in some regions and industries. One theory is that some parents may not be able to return to work because their children’s schools are still online and/or there may not be enough available childcare,” she writes.

“That seems to make sense,” Hooper adds. “I know a number of parents whose children only started going back to school in person in the last several weeks, while others are expected to finish out the school year online, with a resumption of full-time in-person instruction not anticipated until the fall of 2021.”

Hooper’s prediction? The labor/worker shortage will be short-lived and the economy will come roaring back, soon enough.

Fingers crossed!

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