Mortgage Bonds fell today after the recent post election runup. The 3% coupon fell 19bp to end the session at 105.25 down 22bp. A 22 bp loss in price equates to about .125% increase in Mortgage Rates. Stocks closed near unchanged – the Dow closed at 12,815.39, the S&P 500 settled at 1,379.85 while the Nasdaq saw a 9.29 point gain to finish the week at 2,904.87. The Bond markets are closed on Monday in observance of Veteran’s Day while Stocks are open for a normal session. I continue to recommend locking into rates at this time.
Our thoughts and prayers are with those who are suffering from the two recent storms that have devistated the east coast.
New York-area officials are concerned about the residents left after last week’s storm. 30,000 to 40,000 people in New York alone will be forced to find new homes, reported Mayor Michael R. Bloomberg. “I don’t know that anybody has ever taken this number of people and found housing for them overnight,” the mayor said. “We don’t have a lot of empty housing in this city. We are not going to let anybody go sleeping in the streets or go without blankets, but it’s a challenge, and we’re working on that as fast as we can.”
Unfortunately, New York is not the only area that will be affected by the cold weather. Residents in New Jersey and Connecticut can expect a similar problem. “This is going to be a massive, massive housing problem,” Gov. Andrew M. Cuomo said.
Housing News
S&P/Case-Shiller: Home prices rise 0.9%
U.S. home prices edged up 0.9% in August as 19 of the 20 cities studied in the Standard & Poor’s/Case-Shiller index posted positive monthly gains from July.
The price jump beat analysts’ expectations with Deutsche Bank forecasting a more modest 0.4% home price increase in August.
The 10-city composite index experienced an annual price gain of 1.3%, while the 20-city composite grew by 2% over last year.
Eighteen of the metros studied posted price gains from July, an indicator in line with reports of a market turnaround in real estate.
Merrill Lynch predicts that the Case/Shiller Home Price Index will increase by 5% in Q4 of ’12 from Q4 of ’11.
QE3 is Boosting Housing
Freddie Mac said that thanks to QE3, it is boosting its outlook for the US housing market, according to Bloomberg Business Insider.
Author Joe Weisenthal admits he heard the news first on FT Seeking Alpha, but he also links to the full release, for those Business Insider readers who can not find a way to navigate to the Freddie Mac website.
“The gradual turnaround in housing activity reflects, in part, the Federal Reserve’s accommodative monetary policy,” the report states. “With mortgage rates at their lowest levels since at least the 1940s, housing demand has begun to improve.”
Trulia Reports Housing is 43% Normal
An article in Forbes is giving Trulia space to put a percentage on the housing recovery.
It’s a fun, fun piece, with great graphics.
Trulia concludes the “housing market is now 43% of the way back to normal – compared with 42% in August and 24% in September 2011. For the second month in a row, the Housing Barometer is at a post-crisis high.” Rise up, housing barometer, rise!
Economic News
Personal Spending rose by more than expected while inflation remained tame last month, which is giving Bonds added support this morning.
Jobless Claims Fall by 8,000 to 355,000; Survey Called for Jobless Claims of 365,000
The European Central Bank (ECB) has left its key lending rate unchanged at 0.75 percent as it waits to deploy its new “unlimited” bond-buying program. Spain, seen as the prime candidate for the ECB’s bond purchases, has so far delayed a decision on asking for help.
Sources: Bloomberg, Forbes, Housingwire,MMG