Concerns over stock price valuations continues to support our market as well. China slowing its economy, Greece going broke, and political policy uneasiness in Washington DC are all giving the stock market a continuing headache.
The Fed statement essentially followed the expected script, demand was strong for the Treasury auctions, and much of the economic data released during the week was stronger than expected. The net effect was a small increase in mortgage rates during the week.
The best the market can hope for (short term) is to stabilize at current levels given all the uncertainty in stocks and global assets. Good idea to stay defensive and see how the next day and a half play out.
The saying “the stars are aligned” pretty much sums up the housing market today. Let’s take a look at why buying today -- not waiting until Spring, for example -- makes sense.
With 15 minutes to go in cash Treasury/MBS trading, the market is going out on the lows (highest yields/worst mortgage pricing) of the day. Fed Governor Hoenig’s dissent looks to us like an interest rate protest or maybe it’s the first vote/trial balloon.
Information received since the Federal Open Market Committee met in December suggests that economic activity has continued to strengthen and that the deterioration in the labor market is abating.
Comments were made about Treasury/MBS purchase program that are set to expire March 31st or June 30th are still in vogue. Markets are slipping as we speak, warranting a worsening reprice. Hang in there.
Treasury Secretary Geithner is medium rare as the House Oversight Committee is grilling him on AIG. Undisclosed documents, backroom deals, maybe a cover up coordinated with Sir Bernanke, and the counter parties all paid off at par (by the taxpayers) are the hot topics.
On the bright side, daily oscillators are still posting positive readings and holding above midrange levels. All good things for those that want lower mortgages/better pricing.
Existing Home Sales hit the tape down 16.7% to 5.45 million units, the largest decline since 1968. Economists were looking for a much better number. While sales declined in every region, inventories came down a bit, a good sign that “maybe” we can work through glut even if government support dwindles.
