Daily Commentary by Larry Baer: The
pace of existing home sales rose in August by 7.8% -- it fastest pace in over
two years according to data released by the National Association of
Realtors. House price appreciation is
gaining as the median existing-home price rose 9.5% on a year-over-year basis,
compared with a 7.7% annualized appreciation rate in July.
In a separate report the Commerce Department
showed housing starts rose last month by a seasonally adjusted annual pace of
2.3% -- slightly below expectations. An
unexpected decline in groundbreaking for multi-family home projects created an
unanticipated drag on the monthly number.
As they do every Wednesday, the Mortgage
Bankers of America released their Mortgage Application Survey data for the week
ending September 14th.
According to the MBA, overall loan demand retreated just a bit last week
- falling 0.2% from the prior week's pace.
A modest 0.8% increase in refinancing activity was not enough to offset
an almost 4.0% decline in the purchase index.
Refinance requests accounted for 8 out of every 10 loan applications
taken last week.
The contract rate for 30-year fixed-rate conforming
mortgages fell by 3 basis-points to 3.72%.
The interest rate is down 14 basis-points from one-month ago and down by
57 basis-points from the year-ago mark.
For what it is worth -- my models are
indicating the Dow and the NASDAQ are very vulnerable to a downward price
correction - with at least a modest sell-off likely to occur over the last two
days of the week. If this assessment
proves accurate, capital flowing from the equity markets back into the relative
safe-haven of Treasury debt obligations and mortgage-backed securities will
tend to be supportive of the near-term prospects for steady to perhaps
fractionally lower mortgage interest rates.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
