Daily Commentary by Larry Baer: The Greek government clinched a major financial bailout agreement with the European Union and International Monetary fund yesterday. The financing facility will ensure the Greeks avoid a messy sovereign debt default - at least for the near term. The majority of global investors still harbor grave concerns over the public and political will of the Greeks to implement the tough reforms and cost-cutting measures required by the terms of the freshly signed bailout agreement. This on-going story is almost certain to influence the trend trajectory of mortgage interest rates here at home for several more months.
The National Association of Realtors reported earlier this morning existing home sales surged to an 18-month high in January and the supply of properties on the market was the lowest in almost seven years. The initial euphoric response headline was sharply muted when the Realtors' statisticians sharply downwardly revised the prior month's report - with sales in December actually falling 0.5% from November, instead of jumping 5.0% higher as initially reported. Whoops.
Distressed properties, foreclosures and short sales, which typically occur at deep discounts, accounted for 35% of overall sales, up from 32% in December. Investors accounted for 23% of purchases, while first-time buyers were 33% of the market. A third of pending existing home sales contracts were cancelled during the month.
As they do every Wednesday, the Mortgage Bankers of America have released their Mortgage Application Survey figures for the week ended February 17th. The composite index, a value representing both purchase and refinance applications, declined 4.5% over the past week. The index is down 1.2% over the past four weeks but is still up 69.0% from a year ago.
Purchase applications were down 2.9% from the prior week, down 12.4% from four weeks ago, and down 9.3% from the year ago mark. Refinance applications dropped 4.8% for the week, and were down 1.3% from four weeks ago but up 111% from this time one year ago.
Refinance requests represented 8 out of every 10 loan applications taken during the week and currently compose 79% of the national pipeline.
The contract rate for 30-year fixed-rate conforming mortgages finished at 4.09%, up 1 basis-point for the week, down 2 basis-points from four weeks ago and down 98 basis-points from year ago levels.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
