Commentary: Like yesterday - trading activity in the mortgage market is thin and sporadic.
The National Association of Realtors announced earlier this morning that sales of existing homes fell in June by a disappointing 0.8%. This drop is the third consecutive monthly decline and brings sales to their slowest pace since last fall. Even though the June sales invalidated the consensus estimate among economists calling for a gain of 1.8% -- mortgage investors apparently consider the June Existing Home Sales report nothing more than background noise against the din of market chatter surrounding the on again - off again congressional efforts to raise the national debt ceiling while simultaneously slashing government spending by a meaningful amount.
The majority of credit market participants have no doubt approval for an expansion of Uncle Sam's borrowing power will be forthcoming from Congress by the August 2nd deadline. The details of such an agreement are still very much in doubt - and it's the details that will influence the forward looking trend trajectory of mortgage interest rates the most. Until this veil of uncertainty is lifted - look for mortgage interest rates to move back and forth in a very tight trading range.
For those who may be interested -- the Mortgage Bankers of America have released the mortgage application survey data for the week ended July 15th. Overall loan demand was up 15.5% during the week - driven almost entirely by a sharp 23.1% increase in refinance loan requests. The number of applications taken for the purchase of a home fell by 0.1% during the period.
The contract rate for 30-year fixed -rate mortgages finished at 4.54%, down 1 basis point from a week ago, down 3 basis points from four weeks ago, and down by 5 basis points from year ago levels. Seven out of every ten loan applications taken last week were for a refi.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
