Looks like a good weekend. Following are various commentaries that speak to what rates are doing. Below that is info on Rose CDC, a nonprofit agency that does great work in SE Portland OR.
From Think Big, Work Small
Interest rates jumped overnight and opened this morning higher with prices of mortgages down along with treasuries. At 8:30 March durable goods orders were much lower than expected on the overall at -1.3% against +0.4%, when auto sales are withdrawn orders jumped 2.8% against forecasts of an increase of 0.6%. Total orders unexpectedly dropped, depressed by a 67% plunge in demand for commercial aircraft that is often volatile. Feb durable goods orders were revised from +0.9% to +1.1%.
At 10:00 March new home sales were expected to be up 6.7% to 330K units (annualized); HOLY COW! sales jumped 26.9% to 411K units and that is after upward revisions to Feb and Jan (Feb from 308K to 324K, Jan from 315K to 338K). The NE +35.7%, Midwest +4.3%, South +43.5% and the west +5.7%. The median sales price $214K with just a 6.7 month supply down from 8.6 months in Feb. The way off the charts improvement hasn't done much to the bond market so far but did turn the equity markets up from trading lower prior to the release.
Greece continues to have impact on US bond rates and the dollar; the Greek government today sent a letter formally requesting the release of an EU aid package to help the government stave off a default. Stocks in Europe rose and the euro snapped declines that drove it to a one-year low against the dollar as Greece asked the European Union for the aid package. Greek bonds and stocks plunged yesterday, dragging down European markets, as Moody's Investors Service cut its rating on Greek debt one step to A3 and the EU revised up the country's budget deficit. Credit-default swaps on Greek government bonds fell 54 basis points to 591 today, after rising to a record 650 basis points yesterday. The 10 yr treasury yield climbed from near its lowest in a month as Greece called for the activation of the financial lifeline of as much as 45 billion euros ($60 billion) to help it avoid a default.
Talk from a number of Fed officials this morning that the Fed should begin selling assets it accumulated in the bailout binge; six members of the FOMC want the Fed to sell some or all of the $1.25T of MBSs it bought over the past year. Bernanke however is not likely to get on board that train now, as long as there is still concern that this recovery is flawed with the housing markets still declining and unemployment high. The Fed is very unlikely to begin selling assets until it is convinced by doing so it won't disrupt markets; the idea the Fed would dump MBSs on the market anytime soon is far fetched. The MBS markets are still on life support, but the venelator has been removed and improvement is slowly gaining momentum; yesterday the first private label MBS was issued since the crash in 2008; it was for jumbos, 225 loans with an average loan of $933K and average credit score of 733---a nice start.
Treasuries are headed for a weekly loss on concern rising debt supply will deter buyers at the next week's auctions, much better than expected Mar durable goods orders, and continual evidence that the economic recovery is gaining momentum. So far 85% of all S&P stocks that have reported earnings have been good and some much better than expected. Germany's economic rebound is also increasing. As long as the world is convinced the global economy is recovering the path for interest rates will continue to be higher. Sovereign debt will push rates higher as governments have to borrow and in turn compete with the private sector. That said, we continue our outlook that rates while increasing won't spike quickly---a slow path upward.
Not likely the bond and mortgage markets can turn around today with the very strong economic releases and next week's $118B of Treasury borrowing. The magnitude of price declines in mortgages and treasuries through the rest of the session will depend on how firm the equity markets trade off the data points today.
From Dick Lepre,, San Francisco
Thursday April 22, 2010
Initial Jobless Claims were 456,000 last week - above consensus and below previous. Core PPI was +0.1% matching consensus and previous. Existing Home Sales were up slightly. With all the support that the government has given to the housing industry the result has been to maintain values at what still may be unnaturally high levels. Compared to everything else, housing is still to expensive. In the long term, this may tend to inflated the cost of everything else.
From Freddie Mac
Long-Term Mortgage Rates Mostly Unchanged from Last Week April 22, 2010
McLean, VA - Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.07 percent with an average 0.7 point for the week ending April 22, 2010, unchanged from last week when it averaged 5.07 percent. Last year at this time, the 30-year FRM averaged 4.80 percent.
The 15-year FRM this week averaged 4.39 percent with an average 0.6 point, down from last week when it averaged 4.40 percent. A year ago at this time, the 15-year FRM averaged 4.48 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.03 percent this week, with an average 0.6 point, down from last week when it averaged 4.08 percent. A year ago, the 5-year ARM averaged 4.85 percent.
The 1-year Treasury-indexed ARM averaged 4.22 percent this week with an average 0.5 point, up from last week when it averaged 4.13 percent. At this time last year, the 1-year ARM averaged 4.82 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Mortgage rates on fixed-loans were relatively unchanged this week while ARM rates were mixed," said Frank Nothaft, Freddie Mac vice president and chief economist. "These low mortgage rates are revitalizing the home construction industry. For instance, although new building of one-family homes slowed slightly between February and March by an annualized rate of 0.9 percent, this was primarily due to a 33.7 percent drop in the Midwest. The other three regions rose to their strongest pace since the second half of 2008.
"In addition, builder confidence rose more than the market consensus in April to the highest level since September 2009, according to the National Association of Home Builders/Wells Fargo index. During the same month, the builder gauge of current home sales increased to its highest since March 2008."
Rose CDC
This is a great nonprofit housing agency located in SE Portland - they are very involved in many aspects of housing and business development. Following are some tidbits:
ROSE Community Development combines affordable housing programs with supportive services and economic opportunities to Revitalize Outer South East.
We are rooted in the belief that affordable housing gives people the opportunity to build better lives. But since our first project -- rehabilitating a single house in Lents for a low-income family in 1992 -- our work to revitalize our community has extended far beyond housing. We are improving economic conditions in our neighborhoods and giving people the tools and the support they need to improve their lives.
Our work is focused in five Southeast Portland neighborhoods: Lents, Brentwood-Darlington, Powellhurst-Gilbert, Foster-Powell and Mt. Scott-Arleta.
Contact Us
ROSE Community Development
5215 SE Duke Street
Portland, OR 97206-6839
Office hours: 8:00am - 5:00pm
(503) 788-8052
Fax (503) 788-9197
Comments(0)