This entry was posted on Wednesday, March 26th, 2008 at 4:37 pm and is filed under Economy, Mortgage Rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Sacramento Mortgage Rates: Treasuries Rally on Bad Economic News
Other than a brief rise in February’s existing home sales that sparked Monday’s stock rally the rest of the economic news has been bad. New home sales fell in February, and remember that new homes are considered “sold” at Contract, not at close. Cancellations are never acknowledged in the numbers; they are simply left to sort themselves out in the long run. This leads to a short-term overstatement of sales and and understatement of inventory. As Credit Union National Association’s Mike Schenk so aptly put it, “We have two problems: supply and demand.”
Sliding consumer confidence, no decline in the inventory levels of homes, and today’s drop in durable goods all point the same direction. Monday’s stock market rally has turned sour, and money is flowing into bonds. Treasuries are up this morning, and the Fannie Mae MBS 5.5% coupon is up 8/32nd’s, indicating a possible slight improvement in mortgage rates today. We’ll see how stingy and cautious the banks are about passing that along to the consumer.