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Economic Data

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Mortgage and Lending with Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 NMLS ID# 158606

Economic data should steal some headlines away from the G-20 pre-meetings today and reports from the Obama camp that bankruptcy may be the most likely option for some carmakers. The ISM Manufacturing, Pending home sales, and Vehicle sales are expected to show mild gains while ADP employment change is expected to post another massive loss of 663,000. 

 Home prices dropped 19% in January according to the S&P/Case Shiller index.  A glut of unsold properties may keep prices low, shrinking household wealth and damping spending.  Sales of new and previously-owned homes rose in February, indicating the housing slump may ease as policy efforts to unclog credit and aid borrowers.  Consumer Confidence rose less than expected to 26 while expectations were it would rise to 28 from the all-time record low of 25.3 in February.  Current unemployment and rising gas prices were the primary reasons for the pessimism but long term indicators look more positive.

 Treasuries continued their move higher yesterday afternoon to close near the best levels of the session ahead of the Fed's planned purchase of Treasuries today and lousy economic data that was below expectations. 10yr was up 10/32nds to yield 2.67% and the 30yr was up 28/32nds to yield 3.54%.

 Mortgages opened yesterday in the morning with originators and the Fed the only real players. Supply approached 3bln early to end the day around 6.5bln mostly in FN 4s and 4.5s.  Despite the selling,  mortgages traded well as Fed buying was reported in the 3bln range mainly in FN 4s while other buyers included Asia and Money Managers.  FN 4s at 3pm closed on spread 1-2/32 wider to swaps and FN 5s and 5.5s outperformed by 1-3/32.  At 5pm the mortgage stack was the following: FN 4s 100-17(unch), FN 4.5s 102-05 (+2/32), FN 5s 103-05+ (+2/32).

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Comments(2)

Ken Tracy
Coldwell Banker Residential - Naperville, IL
Helping clients buy and sell since 2005

Hi Larry.  Quite amazing that home prices can drop so quickly!

I don't know if we have really got our arms around the price drop.

Thanks for writing,

Ken

Apr 01, 2009 03:11 AM
Fran Gaspari
Patriot Land Transfer, Inc. - Limerick, PA
"The Title Man" - Title Insurance - PA & NJ

Larry,

Don't you know that we live in the age of Obama where terrorists may no longer be referred to as terrorists, thus there is no longer a war on terror...and the car makers won't be declaring bankruptcy, they will simply opt for a court ordered corporate restructuring...Change we need...!!! Thanks,   Fran

Apr 01, 2009 03:12 AM