Daily Commentary by Larry Baer: Groundbreaking
on new U.S.
homes surged in September to its fastest pace in more than four years -
climbing 15% on a month-over-month basis.
Starts for single-family homes were up 11.0% while dirt work for
multi-family units climbed 25.1% higher.
Starts are certainly moving in the right direction but they remain about
60% below their peak set in January of 2006.
Overall building permits were up by 11.6% from August to September.
As they do every
Wednesday, the Mortgage Bankers of America have released their Mortgage
Application Survey figures for the week ending October 12th. According to the MBA, a second consecutive
decline in refinancing activity pushed the mortgage applications composite
index lower by 4.2% during the survey period.
The number of refinance applications taken during last week was down by
5.3% while purchase applications were up by 0.9%. Refinance applications accounted for 81.7% of
all applications and represent 79.7% of the prospective loan volume.
The contract rate
for 30-year fixed-rate conforming mortgages rose by 1 basis point to
3.57%. The interest rate is down 15
basis-points from four weeks ago and 76 basis-points from this time one year
ago.
In my judgment the
"wildcard" for the balance of the week will be tomorrow morning's
weekly jobless claims report. Analysts
currently expect jobless claims will post a gain of 26,000 or so for the week ending
10/13 - giving back most of last week's big decline. If so, the data will tend to be supportive of
steady to perhaps fractionally lower mortgage interest rates. In the unlikely event the jobless claims
numbers remain unchanged or show a further decline from the prior week - look
for mortgage investors to respond by pushing rates higher from current levels.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
