October 12, 2020
Orion’s brokers pay attention to what really matters for their business: using Orion’s products, pricing, and services to assist your clients. But the election is only three weeks off. For months now, some would say years, while brokers are doing a wonderful job helping families finance home purchases or save money every month with refinances, politics has been in the news. Should Orion’s brokers, and your clients, be concerned about this, and the economy in general?
President Trump and the First Lady tested positive for COVID-19 but now, per reports, is better and back on the campaign trail. The news, and the frailty of anyone in the position, adds the potential for large stock and bond market swings as we approach the general election in less than a month. Markets don’t like surprises, but mortgage rates and bond prices did very little. That is good news.
But what about if and when Congress can agree on a fresh fiscal stimulus plan? Our brokers report that potential borrowers are hurting, either themselves or through the businesses they own. This has a direct impact on GDP and the health of our economy. Congress has been unable to agree on a plan and this has added to the already incredible uncertainty for the financial markets. Mortgage rates could easily move lower if Congress doesn’t come together with a large plan to help the economy recover further, but at what price to borrower’s credit?
Orion’s brokers know that housing continues to be the engine for the economy. The recent Pending Home Sales number from a couple weeks ago, a forward-looking view on housing, showed the highest reading since 2006. The demand for housing is very strong in the areas that Orion serves and the confidence required for individuals to purchase a home cannot be understated. Orion’s AEs hear from our brokers that there's a lot of optimism in the housing sector and the tailwinds of low mortgage rates, an improving economy, and continued improvement in the labor market should help housing well into 2021 and beyond.
In addition to housing, employment drives our economy, and the jobs market is doing its best to recover. But it is not easy. The September Jobs Report showed the unemployment rate at 7.9%, a major improvement from the 14.7% seen in April. Brokers know that employed people are better at having the ability to repay, so let’s hope that the job situation continues to improve as we head through October.
If and when a stimulus package is agreed upon, it will likely be good for the economy and stocks and bad for mortgage rates and bonds. But probably not much, as experts think it will take years to return given the number of small businesses closed and jobs lost. Meanwhile, Orion continues to help brokers from coast to coast do what they’re good at: helping clients!