Housing starts were UP 1.7% for July to a 546,000 annual pace, but this was below expectations and all the gain came from a big boost in multi-family starts. Single-family starts were off 4.2%, declining for the third straight month. Looking at the market further out, we saw new building permits down 3.1% for July to a 565,000 annual rate.
Big picture still suggests low Austin mortgage rates will be with us for some time to come. Just get used to the volatility.
Overall, we see continued low Austin interest rates on mortgages and historically low yields on treasuries well into the 4th quarter. The market is however forming a huge bond bubble that will someday create a massive correction. That day is not today or tomorrow.
The economic environment for Austin mortgage rates was little changed this week. Weaker than expected economic data and continued low inflation supported low Austin mortgage rates, and investor demand for bonds remained high. As a result, Austin mortgage rates again ended the week a little lower.
Part of the whip lash seems to be coming from traders reading the tea leaves of the Housing Summit. Comments by Bill Gross that Pimco wouldn’t buy a mortgage security unless the government backed it or if they did, they would require a minimum of 30% down payment. Other comments range from having FNMA/FHLMC reduce all current mortgages to 4.0% as a stimulus measure for the economy. How would you like to be invested in a few billion of 4.50% or 5.0% paper and take a hair cut to 4.0%?
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Wanted to get this out quickly as a worsening Austin mortgage price change is right around the corner. As I mentioned yesterday, the risk reward of borrowers waiting to lock their mortgage rates based on expectations of better mortgage pricing are at the present, fool’s gold.
Just a quick update. Stateside traders were greeted with bullish price action as Japan’s growth fell short of expectations, pushing the 10 year note up 1 point before the bell. The National Association of Home Builders Confidence Index didn’t help, falling to 13, its lowest level since March 2009.
Conditions favor continued bullish price action (Austin mortgage price improvement) but probably at a slower pace. Reason being is that we’re in the 10th consecutive week of positive price action on the weekly chart. Something that is rare to see (8 weeks or more).
School district calendars for Austin, Bastrop, Del Valle, Dripping Springs, Eanes, Georgetown, Hays, Hutto, Lago Vista, Lake Travis, Leander, Liberty Hill, Lockhart, Luling, Manor, Marble Falls, Pflugerville, Round Rock, San Marcos, Taylor, and Wimberley! Click the links to open PDF calendars for Austin area school districts 2010-2011.
