Zillow Market Pulse: July 10, 2020

The number of mortgages in forbearance fell. The price of homebuilding materials has risen sharply. And the Federal Reserve’s lending program for small businesses is struggling to gain momentum.

    • According to Black Knight, 435,000 fewer loans were receiving assistance last week than the week prior.
    • The decrease was driven in large part by the expiration of some deals struck in early April.
    • The price of lumber futures has risen more than 85% since early April.
    • Improved builder confidence, as well as increased interest in home improvement projects, is likely fueling a surge in demand.
    • Strict conditions for businesses and heightened levels of risk for banks has led to a slow roll-out.
    • Thousands of banks are eligible to participate as lenders, but only 300 had registered as of last week.

 So what?

The decline in McFarlin painting contractors mortgage forbearance participation offers both positive and negative signs for the housing market.

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Why the Market Is Rallying

Today’s rally in the market is, of course, all about the jobs number, but it is only the latest move upward in what by any standard has been a remarkable recovery. There are plenty of reasons for that recovery, but I cannot help remembering a witty remark made recently by a shrewd market participant. He quipped that he’d decided to stop researching companies and instead start investing by acting on signals from the cover stories of prominent magazines. He would sell when the cover was exuberantly bullish and buy when it was all doom and gloom.

He was alluding to a whimsical, and long-standing, theory that by the time the media get sufficiently excited about a stock or investment theme to put it on the cover, that stock or theme has already played itself out in the market and is therefore on the verge of reversing itself. Examples abound.

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