Daily Commentary by Larry Baer: A report from
the National Association of Realtors issued earlier this morning showed
existing home sales dropped 1.7% last month.
Nationwide, the median price for a home resale was $183,900 in
September, up 11.3% from the year earlier level. Even with the month-over-month decline -- the
pace of existing home sales in September was the second fastest in almost two
years. Listings declined and the months
of inventory slipped below six months for the first time since 2006. The news was almost exactly in-line with
mortgage investors' expectations - creating little, if any noticeable impact on
the trend trajectory of mortgage interest rates. The same can certainly not be said for the
impact of today's 25th anniversary of the stock crash of 1987.
Stock prices began
falling the moment the opening bell sounded - and they have been falling ever
since. The flow of capital out of
riskier assets like stocks is finding its way into the relatively safe harbor
of Treasury debt
obligations and agency eligible mortgage-backed securities - providing a strong
level of support for the intraday prospects for steady to perhaps fractionally
lower rates.
The highlight of the
coming week will be the post-meeting statement from the members of the Federal
Open Market Committee as they wrap-up a two-day meeting on Wednesday. Investors of every description will scour the
document once it is released at 2:15 p.m. ET in an attempt to determine if
committee members may be considering raising rates in 2014 -- instead of 2015
-- as the economy begins to show budding signs of growth. In my judgment it is far too early for the Fed
to provide any such guidance - but the majority of investors will likely remain
skittish until they have a chance to evaluate the post-meeting statement for
themselves. If my assessment proves
accurate, the prospects for lower mortgage interest rates may face some pretty
stiff headwinds during the first three-days of the coming week.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
