Daily Commentary by Larry Baer: Different day - same story.
Persistent worries
about the lack of progress in Washington to avert the economically crippling
effects of the looming "fiscal cliff" continues to underpin the
near-term prospects for steady to perhaps fractionally lower mortgage interest
rates. The "sticking points" in the negotiations appear to be
the impasse created by the president's call for $1.6 trillion in new tax
revenue and the fact there has not been any serious discussions with regard to
Republicans' call for changes to entitlement programs. The clock is
ticking.
Uncle Sam will be in
the credit market looking to borrow $35 billion in the form of 5-year notes
today. Most analysts expect this sale to go off without a hitch. If
their assessment proves accurate - this event will have a negligible impact on
the current trend trajectory of mortgage interest rates.
Earlier this morning
the Commerce Department reported new home sales in October slipped 0.3% lower -
falling below most economists' expectations for a steady to slightly higher
month-over-month sales pace. Even more disappointing was the fact that
September sales were downwardly revised by 4.4% -- all but completely wiping
out the previously reported strong gain. The revision leaves the third-quarter
acceleration in home sales much weaker, bringing growth down from an annualized
17% to 5%. Still, the housing market is slowly improving. Compared
with year ago levels - sales are up by a strong 17% in October.
As they do every
Wednesday, the Mortgage Bankers of America have released their Mortgage
Application Survey figures for the week ended November 23rd.
The composite index, a value representing both refinance and purchase loan
requests, fell by 0.9%. Even so, the composite index is nearly 4% higher
from four weeks ago and up a solid 45.5% compared to this time last year.
The survey showed
purchase-money application traffic increased by 2.6% for the week while the
number of refinance applications taken declined by 1.5%. Refinance
applications accounted for 80.8% of all applications taken and they represent
78.2% of the prospective loan volume.
The contract rate
for 30-year fixed rate conforming mortgages fell by 1 basis point to
3.53%. The interest rate is 12 basis-points lower from four-weeks ago and
68 basis-points lower from the year ago mark.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
