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Business

SEC issues new guidance requiring companies to disclose cryptocurrency risks

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An exterior view of the U.S. Securities and Exchange Commission (SEC) headquarters in Washington.

Jonathan Ernst | Reuters

The Securities and Exchange Commission issued new guidance Thursday, requiring companies that issue securities to disclose to investors their exposure and risk to the cryptocurrency market.

The guidance comes about a month after FTX, one of the world’s largest cryptocurrency exchanges, filed for bankruptcy after loan customer funds to a risky trading company that was founded by FTX’s former CEO Sam Bankman-Fried. Over 100,000 customers were affected by the exchange’s failure.

On Wednesday, SEC Chair Gary Gensler fended off accusations that the agency has failed to prevent crypto firms from misusing customer funds. Gensler also said the SEC would take more enforcement actions if the firms fail to comply with existing rules.

Under the new guidance, companies will have to include crypto asset holdings as well as their risk exposure to the FTX bankruptcy and other market developments in their public filings. The company’s bankruptcy filings indicate the company has over 1 million creditors.

The SEC’s Division of Corporation Finance developed a sample letter after a selective review of findings made under the Securities Act of 1933 and the Securities Exchange Act of 1934, which directs companies to disclose “such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading,” according to the guidance.

A suggested item within the letter asks the issuer to describe how company bankruptcies and subsequent effects “have impacted or may impact your business, financial condition, customers, and counterparties, either directly or indirectly.” Another asks for a description of “any material risk to you, either direct or indirect, due to excessive redemptions, withdrawals, or a suspension of redemptions or withdrawals, of crypto assets. Identify any material concentrations of risk and quantify any material exposures.”

The SEC’s corporate finance division encouraged companies to adopt these recommendations as they prepare documents “that may not typically be subject to review by the Division before their use.”

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Health

CDC encourages people to wear masks to prevent spread of Covid, flu, RSV

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The Centers for Disease Control Prevention on Monday encouraged people to wear masks to help reduce the spread of respiratory illnesses this season as Covid, flu and RSV circulate at the same time.

CDC Director Dr. Rochelle Walensky, in a call with reporters, said wearing a mask is one of several everyday precautions that people can take to reduce their chances of catching or spreading a respiratory virus during the busy holiday season.

“We also encourage you to wear a high-quality, well-fitting mask to prevent the spread of respiratory illnesses,” said Walensky, adding that people living in areas with high levels of Covid transmission should especially consider masking.

The CDC director said the agency is considering expanding its system of Covid community levels to take into account other respiratory viruses such as the flu. The system is the basis for when CDC advises the public to wear masks. But Walensky encouraged people to take proactive action.

“One need not wait on CDC action in order to put a mask on,” Walensky said. “We would encourage all of those preventive measures — hand washing, staying home when you’re sick, masking, increased ventilation — during respiratory virus season, but especially in areas of high Covid-19 community levels.”

About 5% of the U.S. population lives in counties where the CDC is officially recommending masks due to high Covid levels. The CDC continues to recommend masking for anyone travelling by plane, train, bus or other forms of public transportation, Walensky said.

People with weak immune systems and those who otherwise face a heightened risk of severe disease should also consider wearing a mask, the CDC director said.

Walensky strongly encouraged everyone eligible to receive their flu shot and Covid booster. Flu vaccination coverage is lagging for at-risk groups — children under age 5, pregnant women, and at-risk seniors — compared with last year, the CDC director said. There is no vaccine for RSV.

“I want to emphasize that the flu vaccine can be life saving and importantly, there’s still time to get vaccinated to be protected against flu this season and its potential serious consequences,” Walensky said.

The flu has arrived early and hit the U.S. hard with hospitalizations at a decade high for this time of year. More than 8.7 million people have fallen ill, 78,000 have been hospitalized, and 4,500 people have died from the flu this season, according to CDC data. Fourteen children have died from the flu so far this season.

More than 19,000 people were hospitalized with the flu during the week ending Nov. 26, nearly double the previous week, according to CDC data.

People hospitalized with Covid also increased 27% during the week ending Dec. 2, according to CDC data. And respiratory syncytial virus, or RSV, has been hospitalizing children at higher rate than in previous years. Walensky said RSV appears to have peaked in the Southeast and may be leveling off in the Mid-Atlantic, though circulation of the virus remains high in much of the nation.

“We now face yet another surge of illness. Another moment of overstretched capacity and really one of tragic and often preventable death,” Walensky said, as she thanked health-care workers for their service during the repeated surges of illness they have confronted since the Covid pandemic began.

Dr. Sandra Fryhofer, board chair of the American Medical Association, said the circulation of Covid, flu and RSV at the same is a “a perfect storm for a terrible holiday season.” Fryhofer said she understands many people are tired of receiving repeated Covid shots, but getting vaccinated is the best way to avoiding falling ill over the holidays.

“You could get really, really sick this year and ruin your holiday celebrations if you don’t get vaccinated,” Fryhofer said during Monday’s call.

The Children’s Hospital Association and the American Academy of Pediatrics last month asked the Biden administration to declare a public health emergency in response to the surge of pediatric hospitalizations from RSV and the flu.

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Health

Biden administration will end monkeypox public health emergency

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People line up to get a monkeypox vaccination at a new walk-up monkeypox vaccination site at Barnsdall Art Park on Tuesday, Aug. 9, 2022 in Hollywood, CA. 

Brian Van Der Brug | Los Angeles Times | Getty Images

The Biden administration will end the public health emergency declared in response to the monkeypox outbreak, as new infections have declined dramatically and vaccination rates have increased.

The Health and Human Services Department does not expect it will renew the emergency declaration after it expires on Jan. 31 “given the low number of cases today,” HHS Secretary Xavier Becerra said in a statement Friday.

“But we won’t take our foot off the gas — we will continue to monitor the case trends closely and encourage all at-risk individuals to get a free vaccine,” he said. “As we move into the next phase of this effort, the Biden-Harris Administration continues working closely with jurisdictions and partners to monitor trends, especially in communities that have been disproportionately affected.”

Becerra declared an emergency in August in an effort to accelerate a vaccination and education campaign as the virus was spreading swiftly in the gay community. The spread of the virus, dubbed “mpox” on Monday by the World Health Organization in order to reduce stigma associated with its name, has slowed drastically since.

Mpox has infected nearly 30,000 people and killed 15 in the U.S. since health officials confirmed the first domestic case in May, according to the Centers for Disease Control and Prevention. The U.S. outbreak is the largest in the world.

But infections have slowed dramatically since August, when new cases peaked at 638 per day on average. The U.S. is currently averaging about seven new cases a day, according to CDC data.

U.S. health officials have said the outbreak has slowed because vaccinations have increased dramatically, and people have changed their behavior in response to education campaigns about how to avoid infection.

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The vaccination campaign got off to a rocky start, with limited supplies resulting in long lines at clinics and protests in some cities. But vaccinations increased significantly after the White House created a task force and HHS declared a public health emergency.

More than 1.1 million doses of the Jynneos vaccine have been administered in the U.S. since the summer. CDC Director Dr. Rochelle Walensky has said about 1.7 million gay and bisexual people who are HIV positive or are taking medication to prevent HIV infection are at highest risk from mpox.

Mpox has spread primarily through sexual contact among men who have sex with men. The virus causes rashes resembling pimples or blisters that can develop in sensitive areas and be very painful. Though mpox is rarely fatal, people with compromised immune systems are at higher risk of severe disease.

The CDC, in a report published in late October, said it is unlikely the U.S. will eradicate mpox in the near future. The virus will probably continue to circulate at low level primarily in communities of men who have sex with men, according to CDC. Though anyone can catch mpox, there’s little evidence of the virus spreading widely in the general population so far, according to CDC.

The global mpox outbreak this year is the largest in history with more than 80,000 confirmed cases in more than 100 countries. The current outbreak is highly unusual because the virus is spreading widely between people in Europe and North America.

Historically, mpox spread at low levels in remote areas of West and Central Africa where people caught the virus from infected animals.

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Business

FDA pulls antibody bebtelovimab because not effective against omicron BQ.1

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An Eli Lilly and Company pharmaceutical manufacturing plant is pictured at 50 ImClone Drive in Branchburg, New Jersey, March 5, 2021.

Mike Segar | Reuters

A key monoclonal antibody used to treat people with weak immune systems who catch Covid is no longer authorized for use in the U.S. because it is not effective against emerging omicron subvariants.

The FDA, in a notice Wednesday, said bebtelovimab is not approved for use because it is not expected to neutralize the omicron BQ.1 and BQ.1.1 subvariants. They are causing 57% of new infections nationally and make up a majority of cases in every U.S. region except one.

The Health and Human Services Department is putting on hold pending requests for bebtelovimab, and the manufacturer Eli Lilliy has also halted commercial distribution of the antibody treatment until further notice, according to the FDA notice.

But bebtelovimab stocks should be kept on hand in the event that Covid variants which the antibody can neutralize become dominant again in the future, according to FDA.

Bebtelovimab is a single-dose injection administered to people who catch Covid and are at high risk of developing severe disease, but cannot take any other FDA-approved treatments such as the oral antiviral Paxlovid. Many people with weak immune systems, such as organ transplant patients, cannot take Paxlovid with other medications they need.

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U.S. health officials have warned that people with weak immune systems face a heightened risk from Covid this winter, because more immune evasive omicron subvariants threaten to knock out antibody treatments they rely on to stay safe from Covid.

Dr. Ashish Jha, the White House Covid coordinator, said in October that the failure of Congress to pass additional Covid funding means treatments will dwindle as new variants render them ineffective.

“We had hoped that over time as the pandemic went along, as our fight against this virus went along, we would be expanding our medicine cabinet,” Jha told reporters. “Because of lack of congressional funding that medicine cabinet has actually shrunk and that does put vulnerable people at risk.”

President Joe Biden has called on people with weak immune systems to consult with their physicians about what extra precautions they should take this winter to stay safe.

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Health

Drug overdose deaths among seniors have more than tripled in 2 decades

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Deaths from drug and alcohol use are rising among America’s seniors.

Drug overdose deaths more than tripled among people age 65 and older during the past two decades while deaths from alcohol abuse increased more than 18% from 2019 to 2020, according to data published Wednesday by the National Center for Health Statistics.

More than 800,000 seniors suffered from drug addiction and 2.7 million suffered from alcohol addiction in 2020, according to separate data from the Health and Human Services Department.

In total, more than 5,000 seniors died of drug overdoses in 2020 and more than 11,600 succumbed to alcohol, according to the NCHS data. Though drug overdose death rates are lower for seniors than other age groups, they have increased substantially from 2.4 per 100,000 in 2000 to 8.8 per 100,000 in 2020.

“We’ve got a public health problem coming at our door — these trends have been increasing for a long time now,” said Alexis Kuerbis, a professor at the Silberman School of Social Work and an expert on substance use among older adults.

Seniors today are baby boomers, a generation that had a much more open attitude toward drugs and alcohol than their parents, Kuerbis said. Some baby boomers have carried alcohol and drug habits from their youth and middle age into their later years when their bodies are no longer able to tolerate them, she said.

“Baby boomers obviously are very different generation than the silent generation or the World War II generation,” Kuerbis said. “Baby boomers were far more open to using alcohol and drugs during their younger years but also through their middle-aged years and now they are older adults,” she said.

Deaths from fentanyl and other synthetic opioids increased 53% among seniors from 2019 to 2020, according to the data. Kuerbis said there’s some evidence to suggest people who were prescribed opioids in their middle age for an injury later switched to fentanyl once it became harder to get a prescription.

If you are having suicidal thoughts or are in distress, contact the Suicide & Crisis Lifeline at 988 for support and assistance from a trained counselor.

While some drug deaths among seniors are from accidental misuse of drugs, many are suicides from overdosing on opioids, Kuerbis said. Although seniors tend to be happier than younger adults, they also have a higher prevalence of chronic pain, terminal illness and dementia, she said.

Some older adults also use drugs or alcohol to cope with major life changes such as retirement, grief and loss, or a change in their living situation, according to the National Institute of Drug Abuse.

Drug overdose deaths were highest among Black seniors. The death rate from drugs among Black men ages 65 to 74 was more than four times higher than Hispanic or white men in that age group, according to the data. Black women ages 65 to 74 died more often from drug overdoses than white and Hispanic women. White women older than 75 had a higher death rate from drugs than Black and Hispanic women.

Alcohol deaths were highest among American Indian seniors followed by Hispanics, white Americans, Black Americans and Asian Americans, according to the data.

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Business

Black Friday online sales top $9 billion in new record

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Black Friday shoppers wait to enter the Coach store at the Opry Mills Mall in Nashville, Tennessee, on November 25, 2022.

Seth Herald | AFP | Getty Images

Consumers spent a record $9.12 billion online shopping during Black Friday this year, according to Adobe, which tracks sales on retailers’ websites.

Overall online sales for the day after Thanksgiving were up 2.3% year over year, and electronics were a major contributor, as online sales surged 221% over an average day in October, Adobe said. Toys were another popular category for shoppers, up 285%, as was exercise equipment, up 218%.

Many consumers embraced flexible payment plans on Black Friday as they continue to grapple with high prices and inflation. Buy Now Pay Later payments increased by 78% compared with the past week, beginning Nov. 19, and Buy Now Pay Later revenue is up 81% for the same period.

Some of this year’s hottest items included gaming consoles, drones, Apple MacBooks, Dyson products and toys like Fortnite, Roblox, Bluey, Funko Pop! and Disney Encanto, according to the report.

Black Friday shoppers also broke a record for mobile orders, as 48% of online sales were made on smartphones, an increase from 44% last year.

The record-breaking spending comes on the heels of a strong day of Thanksgiving shopping, in which consumers shelled out an all-time high of $5.29 billion online, up 2.9% year-over-year. Typically, shoppers spend about $2 billion to $3 billion online in a day, according to Adobe. 

For retailers, these numbers may be a promising indicator of the coming weeks. Early holiday forecasts have been muted, and Target, Macy’s, Nordstrom and other retailers reported a lull in sales in late October and early November. Consumer sentiment has also weakened in the past month as inflation hovers near four-decade highs.

Though Black Friday is over, e-commerce activity will remain strong through the weekend, according to Adobe’s report. Adobe expects consumers to spend $4.52 billion on Saturday and $4.99 billion on Sunday, ahead of the year’s biggest online shopping day, Cyber Monday.

This year, Cyber Monday is expected to drive $11.2 billion in spending, up 5.1% year-over-year, according to Adobe.

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Business

Mortgage demand rises as interest rates decline slightly

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A home, available for sale, is shown on August 12, 2021 in Houston, Texas.

Brandon Bell | Getty Images

Mortgage applications rose 2.2% last week compared with the previous week, prompted by a slight decline in interest rates, according to the Mortgage Bankers Association’s seasonally adjusted index.

Refinance applications, which are usually most sensitive to weekly rate moves, rose 2% for the week but were still 86% lower than the same week one year ago. Even with interest rates now back from their recent high of 7.16% a month ago, there are precious few who can still benefit from a refinance — just 220,000, according to real estate data firm Black Knight.

Mortgage applications to purchase a home rose 3% for the week, but they were down 41% from a year ago. Some potential buyers may now be venturing back in, hearing that there is less competition and more negotiating power, but there is still a shortage of homes for sale and prices have not come down significantly.

Rates are still twice what they were at the beginning of the year, but they eased somewhat last week. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 6.67% from 6.90%, with points increasing to 0.68 from 0.56 (including the origination fee) for loans with a 20% down payment.

“The decrease in mortgage rates should improve the purchasing power of prospective homebuyers, who have been largely sidelined as mortgage rates have more than doubled in the past year,” Joel Kan, an MBA economist, said in a release. “With the decline in rates, the ARM share [adjustable-rate] of applications also decreased to 8.8% of loans last week, down from the range of 10% and 12% during the past two months.”

Mortgage rates haven’t moved at all this week, as the upcoming Thanksgiving holiday tends to weigh on volumes.

“It’s not that things aren’t moving. They just aren’t moving like normal,” said Matthew Graham, chief operating officer at Mortgage News Daily. “Expect things to get back closer to normal next week, but for the market to continue to wait until December 13 and 14 for the biggest moves.”

That’s when the government releases its next major report on inflation and the Federal Reserve announces its next move on interest rates.

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Business

Collapse of Carvana, the ‘Amazon of Used Cars’, Continues

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The sky is not clearing up for Carvana. 

On the contrary, big clouds continue to gather over the company which was one of the big winners of the covid-19 pandemic, with a massive growth. 

Since announcing its quarterly results on Nov. 3, Carvana  (CVNA) – Get Free Report shares have lost 44% of their value and are currently trading at $8.06 versus $14.35 on that day. This translates into a decline in market capitalization of approximately $1.1 billion in two weeks. Carvana currently has a market value of $1.43 billion.

The company, founded in 2012 and based in Arizona, took advantage of favorable conditions to market its new way of buying a car. The group’s car vending machines stuck well with the pandemic, a period during which consumers wanted to avoid contact as much as possible, to limit their exposure to the virus. 

The federal government had also flooded consumers with money via stimulus programs. Interest rates were almost zero, which meant that financing the purchase of a vehicle cost practically nothing. 

Added to this, the supply chains of car manufacturers were disrupted, which made the production of new vehicles difficult. Faced with these challenges, consumers turned to the second-hand market as the waiting times for new vehicles were long. Used car prices therefore jumped, making it a good deal for Carvana. 

Basically, all the winds were blowing in the right direction for the company.

New Car or Used Car?

But coming out of the pandemic, Carvana’s fortunes seem to have turned completely. The used car market remains hot. But all the other factors have reversed. There is no more stimulus money. The central bank is aggressively raising interest rates and inflation is at its highest in 40 years. The economy is also close to a recession more than ever, and the waves of job cuts follow one another. Used car prices remain high but financing the transaction has become very expensive for consumers. Supply chains have improved significantly, facilitating the production of new vehicles.

This was felt in the latest quarterly results from Carvana: In the third quarter, Carvana’s revenue fell 2.7% year-on-year to $3.4 billion, while net loss jumped to $283 million from just $32 million in the third quarter of 2021, the company said in a letter to shareholders.

Used car sales in the U.S. fell almost 13% year-on-year, in the third quarter of 2022.

“If you’re looking at newer used cars — models in the 1 to 3-year-old range, you may find that prices are still relatively close to what they sold for new,” Consumer Reports said. “If you have to borrow money to buy the car, it may be better to find a new car that can qualify you for a lower interest rate, to say nothing of the benefit of a fresh factory warranty. Many manufacturers subsidize financing and may offer interest rates that are much lower than normal to qualified buyers.”

All this complicates the affairs of Carvana, which had to go into $3.3 billion of debt to finance the acquisition of auctioneer Adesa’s physical auction business this year.

Carvana

Elimination of 1,500 Additional Jobs

The group is therefore under enormous financial pressure.

“Significant nearer-term operational and financial risks for Carvana have emerged and are likely to cloud the CVNA investment story for the foreseeable future,” Oppenheimer analyst Brian Nagel said in a note on Nov. 15, downgrading the stock.

He added that “we do not envision investors bidding CVNA meaningfully higher until prospects for a manageable and sustained capital base become clearer.”

Nagel seems to confirm that Carvana has a liquidity problem which the group must address fairly quickly if it wants to stop the collapse. The company has between $6 billion and $7 billion in debt net of the cash on the balance sheet, according to FactSet. 

But Carvana is not profitable: its adjusted EBITDA margin loss increased by 6.2% in the third quarter. EBITDA refers to earnings before interest, taxes, depreciation and amortization, which helps investors to gauge the financial health of a company.

The company is struggling to try to change things and delay as much as possible raising equity capital or adding more debt. Carvana, for example, is determined to drastically reduce costs. After cutting 2,500 jobs in May, the company has just announced an additional wave of layoffs which affects 8% of its workforce, or 1,500 employees.

“It is fair to ask why this is happening again, and yet I am not sure I can answer it as clearly as you deserve,” Chief Executive Officer Ernie Garcia told employees in an email on Nov. 18. “I think there are at least a couple of factors. The first is that the economic environment continues to face strong headwinds and the near future is uncertain. This is especially true for fast-growing companies and for businesses that sell expensive, often financed products where the purchase decision can be easily delayed like cars.”

In addition, “we failed to accurately predict how this would all play out and the impact it would have on our business. As a result, we find ourselves here.”

The new cuts will affect “many corporate and technology teams as well as some operations teams where we are eliminating roles, locations or shifts to match our size with the current environment,” Garcia wrote.

Reached by TheStreet, Carvana didn’t comment.

The new job cuts come after ratings agency S&P Global Ratings warned it was likely to downgrade Carvana in the near term, changing the outlook from stable to negative.

“GPU [gross profit per unit] is expected to remain weak due to higher used car depreciation rates and lower returns from selling loans and other products,” said the rating agency. “Carvana generates over 50% of its GPU from selling loans and other products. With rising interest rates, it is more difficult for Carvana to compete with the large banks that can keep loan rates low, which will reduce the number of loans allocated to Carvana.”

Garcia ruled out the option of raising capital on Nov. 3. 

“Our goals are going to be on driving down expenses and trying to get positive EBITDA as quickly as we can,” he told analysts. “We’ve got a bunch of committed liquidity. We’ve got a bunch of real estate. And I think that we feel like that puts us in a good position to ride out this storm. And we’re making great moves inside the company.”

But apart from these financial difficulties, Carvana also faces legal challenges. The company is facing lawsuits from customers in multiple states involving alleged issues over titles and registration and over purchasing vehicles.

Michigan Secretary of State Jocelyn Benson also suspended the retailer’s license, with Carvana suing in return.

Carvana has said the lawsuits are without merit and called the decision in Michigan “arbitrary.”



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Health

Flu variant that hits kids and seniors harder than other strains is dominant in U.S. right now

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A sign advertising flu shots is displayed at a Walgreens pharmacy on January 22, 2018 in San Francisco, California. A strong strain of H3N2 influenza has claimed the lives of 74 Californians under the age of 65 since the flu season began in October of last year.

Justin Sullivan | Getty Images

A variant of the flu that hits kids and seniors worse than other strains of the virus is dominant in the U.S. right now, setting the country up for a potentially bad flu season.

Public health labs have detected influenza A(H3N2) in 76% of the more than 3,500 respiratory samples that have tested positive for the flu and were analyzed for the virus subtype, according to a surveillance report published Friday by the Centers for Disease Control and Prevention.

The H3N2 variant has been associated with more severe flu seasons for children and the elderly in the past, according to Dr. Jose Romero, director the CDC’s National Center for Immunization and Respiratory Disease.

“There are also early signs of influenza causing severe illness in precisely these two groups of individuals this season,” Romero told reporters on a call earlier this month.

The flu hospitalization rate has surged to a decade high this season. Overall, about 8 people per 100,000 are being hospitalized with the flu right now but seniors and the youngest children are much harder hit than other age groups, according to CDC data.

The hospitalization rate for seniors is more than double the general population at 18 per 100,000. For kids younger than age five, the hospitalization rate is about 13 per 100,000.

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At least 4.4 million people have fallen ill with the flu, 38,000 have been hospitalized, and 2,100 have died since the season started. Seven kids have died from the flu so far this season.

“When we have more H3N2, we usually have a more severe flu season — so longer duration, more children affected, more children with severe disease,” said Dr. Andi Shane, a pediatrician and infectious disease expert at Children’s Healthcare Atlanta.

The other influenza A variant, H1N1, is generally associated with less severe seasons compared with H3N2, Shane said. H1N1 makes up about 22% of sample that have tested positive for flu and were analyzed for a subtype, according to CDC.

The percentage of patients reporting symptoms similar to the flu, a fever of 100 degrees or greater plus a sore throat or cough, is the highest in Virginia, Tennessee, South Carolina, Alabama and Washington D.C right now, according to CDC.

Respiratory illnesses are also very high in Arkansas, Colorado, Georgia, Kentucky, New Jersey, Maryland, Mississippi, New Mexico, North Carolina and Texas, according to CDC.

The CDC recommends that everyone 6 months or older get a flu shot. Children younger than age 8 who are receiving the vaccine for the first time should get two doses for the best protection.

The flu vaccine is normally 40% to 60% effective at preventing illness, but people who do still get sick are less likely to end up in the hospital or die, according to the CDC.

Public health officials are also encouraging people to stay home when they are sick, cover coughs and sneezes and wash hands frequently. Those who want to take extra precautions can consider wearing a facemask indoors in public.

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Business

Sharp drop in mortgage rates does little to boost demand

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A home for sale in the Mission Hills area of Los Angeles Tuesday, Oct. 11, 2022 in Mission Hills, CA.

Brian Van Der Brug | Los Angeles Times | Getty Images

Mortgage application volume rose 2.7% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. An additional adjustment was made for the Veteran’s Day holiday.

The small increase followed a government report last week showing that inflation may be starting to ease. That, in turn, sent bond yields plunging and mortgage rates with them. Thursday saw the sharpest one-day drop in the average rate on the 30-year fixed mortgage since daily record-keeping began in 2009.

On a weekly average, the rate on the 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 6.9% from 7.14%, with points decreasing to 0.56 from 0.77 (including the origination fee) for loans with a 20% down payment.

On a daily basis, the rate on Thursday alone dropped 60 basis points, according to a separate survey from Mortgage News Daily.

Applications to refinance a home loan fell 2% for the week and were 88% lower than the same week one year ago. The rate drop came toward the end of the week, and Friday was a federal holiday, Veteran’s Day, so it is possible refinance demand has yet to react fully to the rate drop.

Mortgage applications to purchase a home, which don’t generally react quickly to interest rate changes, increased 4% for the week and were 46% lower than the same week one year ago.

“Purchase applications increased for all loan types, and the average purchase loan dipped to its smallest amount since January 2021,” said Joel Kan, a Mortgage Bankers Association economist.

Loan sizes may be falling too due falling home prices or potentially more first-time buyers getting into the market again at the entry level.

Mortgage rates did not move much to start this week, but the yield on the U.S. 10-year Treasury dropped Tuesday, first in the morning after a monthly read on U.S. producer prices increased at a slightly slower pace than expected.

They fell further later, hitting a nearly six-week low, after news broke that missiles hit Poland, killing two people. That sparked fears of greater political risk in the already war-torn region. Mortgage rates loosely follow the yield on the 10-year Treasury.

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