Morning Report: Average home sizes falling again

Vital Statistics:

	Last	Change
S&P Futures	2352.8	4.8
Eurostoxx Index	372.3	1.3
Oil (WTI)	54.5	1.1
US dollar index	91.4	0.4
10 Year Govt Bond Yield	2.45%
Current Coupon Fannie Mae TBA	102.045
Current Coupon Ginnie Mae TBA	103.17
30 Year Fixed Rate Mortgage	4.14

Stocks are up as the markets have a risk-on feel to them. Bonds and MBS are down small. 

Not much in economic data, but we will have Fed-speak all day, with Kashkari, Harker, and Williams speaking. 

The highlight of the week should be the FOMC minutes coming out tomorrow. Other than that, we get existing home sales, new home sales and the FHFA House Price Index. 

The initial look at February manufacturing indicates a slight decline as the flash PMI falls from 55.5 to 54.3. Services came in at 53.9. 

Goldman is tempering their enthusiasm for the S&P 500, warning that investors are overly optimistic. They predict the stock market will go nowhere for the rest of the year. Their concerns are that the good earnings from Q4 won't continue, and any sort of fiscal stimulus out of Washington will take time to be felt. 

Despite TRID's best efforts, about 17% of consumers end up being surprised by the existence of closing costs when getting a mortgage. The surprises run the gamut of points, up front MI and taxes. 

Speaking of taxes, here are some tax tips from NAR. 

House Financial Services Committee Chairman Bill Huizenga (R-MI) has introduced a bill to clarify the definition of points and fees under the CFPB QM rule by excluding title charges and escrowed T&I. 

We are starting to see average new home sizes decline, which is a function of the emerging first time homebuyer and the market for starter homes. After the real estate bust, the only segment of the new home market that was working was the ultra-luxury end, which meant that average home sizes increased. From 2009 to 2015, it looks like average square footage increased by close to 400 square feet. Now, as more and more starter homes and townhouses are being built, we are seeing average size decline again. Strange to think that the luxury end is the only part that works in the aftermath of a bust, but there you go. 

One often overlooked advantage to buying versus renting: The fact that making your mortgage payment every month amounts to a savings plan as you pay down your principal on your loan. 

The Despot reported better than expected earnings this morning as more and more people do work on their homes. Comps were up 6.3%.