Pending Home Sales, an index that measures purchase agreements signed but not closed, hit the ditch down 7.7%, the lowest level since scribes began keeping records on cave walls. Three of the four regions in the country took it on the chin with the Northeast off 13% and the West the only positive, up 2.4%. Given that housing affordability is at an all time high, mortgage interest rates at very attractive levels, and the recent Housing Stimulus package, stabilization and recovery could kick in by year end.
Additional details were made available today by the Fed concerning TALF (Term Asset Backed Lending Facility). The program is aimed at generating up to 1 trillion dollars in consumer, student, and small business loans. Private securities were also included in the details. That is the classification our “Jumbo” loans fall under. Maybe there is hope.
Stocks have been trading both sides of unchanged, currently up 18 points on the big board. Testimony today has moved the market, given the statement of the moment, as both Gentle Ben and Turbo Tax poster child Geithner update us on the economic mess we’re in.
Bonds, Notes, and Mortgage Backs have traded in the opposite direction of stocks, currently unchanged on the 10 year note (yield 2.93%) while MBS are up 6/32’s. As we talked about yesterday, we see the market continuing to hold steady with a slight bullish bias, not able to mount a substantial rally due to the supply concerns (treasury auctions) but not selling off either as the stock market hovers at 12 year lows, looking like James Caan after Kathy Bates get’s done with him in “Misery”.
Enjoy the price improvements as we tread water in the Employment Report on Friday.