Commentary: The mortgage market stumbled out of the gate this morning - tripped up by a stronger-than-expected weekly jobless claims report.
The Labor Department said the number of American's standing in-line to file for first-time government unemployment benefits fell by 37,000 during the week ended January 15th. The data reinforces the idea that the labor market is making some gradual progress - but readings this time of year should be taken with a "grain-of-salt" due to holiday-related employment and weather issues. The number of people receiving extended government unemployment benefits rose by 29,000 during the reporting period.
In a separate report the National Association of Realtors said existing home sales jumped more than expected in December - posting a gain of 12.3%. Most economists had anticipated existing home sales would climb by a much more modest 4.0% during the last month of the year. Rising interest rates and falling prices likely combined to push potential buyers off-of-the-fence and into the housing market. The median home price fell to $168,000, down from $170,000 in November. The median home price has not been this low since February, 2010. The number of "distressed" sales accounted for 36% of all transactions - up from 33% in November.
Uncle Sam will be in the credit markets this afternoon peddling $13 billion of 10-year inflation-indexed securities. The "adjustable" feature of these notes will likely attract strong demand from domestic and foreign investors alike. If so, this auction will have little, if any noticeable impact on the current level of mortgage interest rates. The auction will conclude at 1:00 p.m. ET and I'll let you know how things turn-out by posting the result on my website as quickly as possible thereafter.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
