The National Association of Realtors reported existing home sales fell 27.2% in July to the lowest level in 15 years, with the supply of homes rising to 12.5 months at the current pace of sales. The weak state of the housing market is of great concern as it reflects deterioration in demand, which in turn affects prices.
As one should expect, stocks are being sold and U.S. Treasuries are rallying as investors flock to a safe harbor with most of the buying on the long end; the 30 year bond. The price of the 30 year is higher by 1.75% while shorter maturities such as the 5 year note are higher by only .30%. Mortgage prices have improved between .125% and .25% from the close on Monday.
One major item remains for today, and that is the Treasury auction of $37 billion of 2 year notes.
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