Finally a break in the bad news, with... bad news that's good news?
A Week of Lackluster Labor: We had a lot of labor reports out this week, almost unanimously bad. However, it provides Warsh the out he needed to avoid rate hikes next month. Let's do a quick dive:
JOLTS reported 7.36M job openings against the 7.5M expectation, and down 178K from May. ADP showed 44K jobs, which is almost half the 70K consensus and the weakest in 6 months. Of those, education and healthcare were 36K of them. Woof. Challenger showed cuts at 33K, DOL Jobless Claims came in up 1K for the week, and today's NFP Employment: showed July payrolls down 23K AND revised prior numbers down.
Woof!
Warsh has been looking for a way to get around rate hikes, and the market was losing confidence in the Fed's ability to act. This gives him that out, and especially with some of the tamed inflation, and potentially his "alternative means" from his taskforce, lays the way. In other news...
UWM: Their early release on earnings showed flat originations and a net loss of $450M. Their non-funding debt-to-equity doubled, and they took on $2B from Oaktree's distressed lending desk (and Ishbia's private funds), and suspended their dividend. Ouch.
Better: Booted out Vishal Garg and their stock is down 21%.
Chase's 750B: Chase made headlines with pledging $750B in housing by 2035. Them's big numbers, but the actual details are a little less sexy. It's a 40% increase in their capital deployment, so $200B more than what they would have spent anyways.
That's 1M affordable housing units they plan, 500K loans, with 200K being first time homebuyers. Affordable they define as <120% AMI, with grants and loans. 120% AMI isn't exactly affordable, and it includes commercial real estate loans.
They do plan on hiring 850 new LO's to hit their lending goals.
Fannie & Freddie Wave Goodbye To Limited: With the updates this week, no more Limited/Streamlined Reviews. Fannie and Freddie both have reservations about condo complexes not hitting their reserve and repair requirements, and so we go back to full reviews.
I think it likely makes sense for the homeowner who doesn't want to move into affordable housing and find themselves with a $6K HOA assessment to fix needed items, but will miss the cheaper HOA documentation.