The 5.5% FNMA bond gained 16bp to close at $100.34. The stock market continue to struggle that higher oil prices may continue as demand may be out growing supplies and production. Oil closed higher at the end of the day over $132 per barrel, and gas here in Northwest Indiana has hit $4.09 a gallon.
There has been very little to cheer about in the housing sector and expectations for this morning's April Existing Homes Sales report were running low as a result. But, existing Homes Sales were reported slightly better than expected at an annual rate of 4.89 million vs. a consensus estimate of 4.85 million. And, now the bad news, median home prices fell by 8% year-over-year while unsold home inventory climbed to 10.7 months, its largest level since June 1985. Although the data was not good, but it wasn't bad enough to propel bond prices much higher.
This could be a signaling that we are coming out of this mess. Some of my friends in the business from around the country and they are all saying and I agree that end of of 2008 will be much better than the beginning.
Dave Woodson
Northwest Indiana's #1 Mortgage Consultant