Trouble for the Housing Market
The treasury will be borrowing about $102 billion worth of 2 yr, 5 yr and 7 yr notes or roughly $2 billion less than it borrowed last month. July existing home sales are due out and are expected to be down roughly 13% while new homes sales are actually expected to have increased 3%. Existing home sales fell 5.1% in June and 2.2% in May.
So – it looks like the trouble for the housing market continues and is even increasing with the expiration of the homebuyer tax credits. May and June sales were up 19.2% and 9.8% over the same months last year (again most likely a result of the tax credit). New home sales saw a nice little push in June, increasing 23.6% after a decline of 36.7% in May. Some of that push could be attributed to such a low volume in May.
Weekly jobless claims, which caused the interest rates markets to decline last week are again expected to decline, this time from 500,000 to 485,000.
Last week, they were expected to decline but ended up increasing 12,000 to 500,000. Last week the mortgage bond market saw a bump Thursday when jobless claims were released and mortgage rates took a dip. We’ll also see the 2ndquarter revision of GDP which is expected to be up 1.4% after a decline of 2.4% was reported last month prior to the release.
Mortgage rate levels will most likely continue to test current low yields. The only other news due out this week is the Mortgage Bankers Association (MBA) weekly mortgage applications release Wednesday. Many experts believe that the 10 yr note and 30 yr mortgages are losing momentum in the short term while the longer term still appears bullish.
