Rocket Companies returns to profitability after back-to-back losses

Good morning. A TikTok trend dubbed "bare minimum Mondays" might help cure the "Sunday scaries," but taking it too far could derail your career, according to Axios.

1. U.S. economy adds 187,000 jobs in July

Here are three key takeaways from the July US payrolls report, released Friday:

1. Employers added 187,000 workers to their payrolls last month, fewer than economists had estimated, and the prior month’s figure was revised down, making it the weakest two months of gains in more than two years.

2. As overall job gains slowed, the labor market remains healthy. Wages picked up at a higher rate than forecast, with a 4.4% increase from the year-ago period. The unemployment rate fell and remains near the lowest in decades. Participation remained at 62.6% for the fifth straight month.

3. There were signs of cooling throughout the report, though: Temporary help services continued their slide, average hours worked ticked down, and some categories that led the boom in job growth in the post-pandemic period continue to cool, including manufacturing and transportation/warehousing.

The data comes as U.S. Federal Reserve policymakers consider whether to continue interest rate increases next month. Friday’s report showed a labor market that is cooling, which works in policymakers’ favor, but wage inflation is still about double what the Fed thinks is healthy. Now we await the consumer price index report on Thursday.

2. Mortgage rates recover after jobs report

Mortgage rates found relief primarily due to recent economic data, particularly the jobs report. Though the report showed historically strong employment, it fell short of economists' expectations, hinting at a less-overheated economy.

Additionally, U.S. Treasuries, central to the rate market, saw shifts in demand and supply earlier in the week, influenced by the ADP employment data and a government borrowing announcement. However, the jobs report balanced market views, aiding in mortgage rate recovery.

Despite Friday's recovery, current rate levels are still uncomfortably close to long-term highs. Mortgage rates only made it back to the levels seen last Monday, with the 30-year fixed index still above 7%. In order to get meaningfully into the 6's, we'll need more data that comes in cooler than the market expects.

Looking forward, the Consumer Price Index (CPI) emerges as a crucial determinant. If it suggests subdued inflation, we might see further easing of rates, but rising inflation could reintroduce upward pressures.

3. More Nuggets

📈 Rocket Companies returns to profitability after back-to-back losses. (DFP)

🕵️ SEC ends investigation into Better.com and SPAC partner’s alleged securities law violations. (TechCrunch)

🧑‍💻 LOs: Turn data assets into origination opportunities. (HousingWire)

4. Home price data: Top 10 rising and falling markets

According to the latest reading by the Freddie Mac House Price Index, 77 of the nation’s 100 largest housing markets saw prices rise between June 2022 and June 2023 while 23 major markets were down year-over-year.

The 10 markets up the most are largely concentrated east of the Rockies: McAllen, Texas (+11.8%); Knoxville, Tenn. (+8.3%); Omaha, Neb. (+8.1%); Hartford, Conn. (+8.0%); Rochester, N.Y. (+7.8%); Syracuse, N.Y. (+7.8%); New Haven, Conn. (+7.2%); Allentown, Pa. (+7.1%); Augusta, Ga. (+6.9%); and Oklahoma City, Okla. (+6.9%).

Meanwhile, the 10 markets experiencing the most significant declines are predominantly located out West, or in the states of Texas and Hawaii. That includes Boise City, Idaho (-10.5%); Austin, Texas (-10.2%); Phoenix, Ariz. (-6.5%); Honolulu (-5.1%); Las Vegas (-5.0%); Ogden, Utah (-3.8%); Stockton, Calif. (-3.7%); Provo, Utah (-3.5%); Sacramento, Calif. (-3.5%); and Spokane, Wash. (-3.3).

Why has the housing market been so divided over the past year?

Western housing markets, such as San Francisco and Denver, driven by the tech sector and a decade-long housing shortage, became particularly sensitive to interest rate changes, leading to volatile prices.

In contrast, Eastern markets remained more stable, with balanced price-to-rent ratios and industries less affected by rate fluctuations. This disparity cushioned the East during the 2022 housing corrections, while the West faced pronounced challenges.

☀️ See you on Wednesday!

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