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Safe House

If there is a safe place to be in the time of Covid-19, home builders may have found it. The National Association of Home Builders on Monday reported that its housing index matched its highest level on record in data dating back to 1985. All three of the index’s components—home builders’ assessments of current sales, their expected sales and foot traffic—were up strongly. That sentiment underscores how home builders are positioned to weather the crisis in ways that many other businesses aren’t. To begin with, home builders are benefiting from mortgage rates that continue to plumb new lows. The appeal of a single-family home with a yard has risen among those with the flexibility to telework. And new-home buyers tend to be more financially secure than the average American. None of which is to say that home builders have suddenly become recession proof. But if things get bad enough to knock builders for a loop they will have gotten very bad indeed, Justin Lahart writes.


U.S. housing starts for July are expected to rise to an annual pace of 1.24 million from 1.186 million a month earlier. (8:30 a.m. ET)

Japan machinery orders for June and provisional trade figures for July are out at 7:50 p.m. ET.


Noted with Interest

Looking to refinance? Those rock-bottom mortgage rates aren’t for you. Lenders have reserved their best rates for buyers. The average rate posted on for a 30-year fixed refinance mortgage was 3.37% Friday, well above the 3.14% on offer for a purchase mortgage, Ben Eisen reports.

If you do buy in the suburbs, don’t make your potential commute too far. is expanding its physical offices in six U.S. cities and adding thousands of corporate jobs in those areas, an indication the tech giant is making long-term plans around in-person office work even as other companies embrace lasting remote employment.

While the housing market appears to be regaining ground at a healthy clip, there are signs other sectors are losing some steam. The New York Fed’s Empire State survey showed the state’s manufacturing activity growing at a much slower pace in August than July. Economists scrutinize the report as potentially foreshadowing other regional Fed surveys and closely watched national purchasing managers indexes. The message so far: “We have seen a number of signs that the economy has lost momentum lately and this regional indicator for one sector in the economy is roughly consistent with that message,” said JP Morgan Chase economist Daniel Silver.

Credit Check

The coronavirus pandemic and the national reckoning over race have thrown new light on a longstanding source of economic inequality: Black communities have less access to credit than white ones. To address that gap, Washington and Wall Street are turning to a small network of lenders set up precisely to address that disparity. Community development financial institutions, or CDFIs, are community-based banks, credit unions and investment funds that lend to home buyers, small businesses and others in rural, impoverished and minority communities. Earlier this year, Congress and the Trump administration earmarked billions of dollars for CDFIs to issue Paycheck Protection Program loans to small businesses. Meanwhile, CDFIs have received multi-million dollar investments from traditional lenders such as Goldman Sachs and Bank of America, and new corporate supporters such as Netflix and Google, Amara Omeokwe reports.

The coronavirus pandemic isn’t falling evenly across racial lines. In Buffalo, N.Y., Black workers are facing a bigger share of the impact.

After the Gold Rush

Warren Buffett’s Berkshire Hathaway has put its gilded name behind one of the largest gold-mining firms, adding to the list of big-name investors making wagers tied to the precious metal at a time of significant economic uncertainty. Berkshire disclosed that it held a $565 million stake in Barrick Gold, the world’s second-largest gold miner. Gold prices this month hit an all-time high, with most actively traded futures rising near $2,070 a troy ounce on Aug. 6. They have since retreated but remain up roughly 30% for the year. A sharp rally in gold’s price tends to be a sign of economic unease. Many buyers say they are taking refuge in gold because they believe ultralow interest rates and government stimulus enacted in response to coronavirus-related shutdowns will erode the value of paper money and stoke inflation, Amrith Ramkumar reports.

Emerging Doubts

The dollar is having a bad year, but some emerging markets’ currencies have it worse. The Brazilian real, the South African rand and the Turkish lira have lost about 20% of their value against the dollar this year, putting the former two on course for their biggest annual declines since 2015. The Russian ruble and the Mexican peso have dropped roughly 15%. Investors remain wary of stuttering economic growth and high levels of coronavirus infections in poorer countries, where the pandemic has exacerbated existing problems such as underfunded health systems and strained government finances. Sudden and sharp currency depreciation, if unchecked, poses a grave threat to these economies: It can lead to runaway inflation levels by driving up the cost of both imports and payments on foreign debt, while eroding the value of savings and financial assets, leaving domestic consumers with little purchasing power, Caitlin Ostroff reports.


The coronavirus is landing hardest in parts of the country least prepared for the economic fallout. “We have seen that there is a strong relationship between Covid-19 cases and pre-Covid delinquency rates at the county level and this correlation cannot be easily explained by some known sources of heterogeneity in Covid-19, such as income, minority status, and population density. This suggests that the harms from Covid-19—the loss of life and health, the decline in employment, the destruction of businesses and the surge in medical expenses—will fall on counties particularly ill-suited to bearing them,” economists Rajashri Chakrabarti, William Nober and Maxim Pinkovskiy write at the New York Fed’s Liberty Street Economics blog.


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