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New Home Sales

Caution is advised to Austin mortgage borrowers!

Overall, we do not see that the fundamental economic picture has changes much at all. Technically, we are in an intermediate term bear market correction. One that could push the market to yields on the 10 year of 2.75%/2.78% (currently 2.70%). If correct, we should see good support from the 62% Fibonacci level (comes in around 2.75%).

Austin Mortgage Market Update – For the week of June 7, 2010

The National Association of Realtors (NAR) reported the Pending Homes Sales index rose in April for the third month in a row, registering a 6% increase over the upwardly revised March figure. This index measures the number of homebuyers signing purchase contracts. April Pending Home Sales hit their highest level since October 2009 and are UP 22.4% year-over-year. Like Existing and New Home Sales the week before, a good part of the gain was put to the tax credit expiration that required a signed contract by April 30. The NAR also forecast new home sales will be UP 18.5% for the year.

New Home Sales gains also smell of the last mad rush for 8K in buyers credit money before we put that program to bed the end of next week

New Home Sales were also released, up 26.9% to 411K annual units. The print blew away economists estimates of plus 330K. Every region of the country rebounded with the “South rising again”, up 43% month on month. Although the numbers were great, they are coming off the worst month (February) in 22 years. The gains also smell of the last mad rush for 8K in buyers credit money before we put that program to bed the end of next week.

The tactical bias for Austin mortgage rates and pricing is to remain neutral

The tactical bias for Austin mortgage rates and pricing is to remain neutral, trading a range on the 10 year note between 3.75% and 3.82%. Stocks want clarity on the Goldman/SEC issue which will lead bonds to react accordingly. Our work on the 10 year note chart is providing neutral to bullish trend signals and overbought conditions at the same time. Classic example of a mixed bag.