Daily Commentary by Larry Baer: New home sales posted a stronger than
expected month-over-month gain of 3.3% in April, offering further evidence the
housing market has turned a corner. Compared to April of last year, new home
sales were up 9.9%. Signs of renewed
life in the housing market were also bolstered by a 4.9% rise in the median
price of a new home last month to $237,500.
While the inventory of new homes on the market rose 1.4%, it remains
near record lows. The upturn in job
growth together with record-low mortgage interest rates is fueling the surge in
housing demand.
Speaking of mortgages - the Mortgage Bankers
of America
have released their mortgage application survey data for the week ended May 18th. The numbers show overall loan demand rose
3.8% during the week lead by a 5.6% week-over-week increase in refinance loan
requests. Purchase money loan requests
slipped 3.0% lower from the prior week's level.
Refinance applications accounted for a little more than three of every
four mortgage applications taken last week.
The contract rate for 30-year fixed-rate conforming mortgages finished
the survey period at 3.93%, down 3 basis-points from its week-ago level, down
11 basis-points from four weeks ago, and down 82 basis-points from the year ago
mark.
Uncle Sam is back in the credit markets
looking to sell $35 billion worth of 5-year notes today. Demand for this offering may not be as robust
as it has been at recent auctions simply because the price of this security has
become so expensive as the yield drops into the neighborhood of 0.73%. A softer-than-expected bid for a today's
auction may cause a little ripple in the mortgage market - but not enough to
notably influence the current level of mortgage interest rates. Today's auction will conclude at 1:00 p.m. ET
and I'll post the result on my website as soon as possible once the final gavel
falls.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
