CHART OF THE DAY: Credit Availability ↓ Purchase Volume ↑

09/23/20 08:50AM EDT

Below is a chart and brief excerpt from today's Early Look written by Macro analyst Christian Drake.

A notable aspect of the sustained spike in purchase volume is that its occurring alongside a discrete tightening in mortgage credit availability – mortgage credit has tightened significantly since April but has not manifested as a growing spread between Purchase Applications and closed transaction volume (i.e. a higher application rejection rate).   

Ostensibly, this underscores the broader inequality dynamics that have pervaded pandemic related socio-economics (job loss concentrated among those least able to shoulder it, recovery/income gains disproportionately accruing to owners of capital and financial assets).  Effectively, everyone who’s qualified is buying a house, while everyone who isn’t wishes they could … a dynamic that will only serve to further propagate the inequality cycle. 

CHART OF THE DAY: Credit Availability ↓ Purchase Volume ↑  - CoD Credit Down Vol Up

© 2020 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.