New home sales rose 7.3% in April, a positive number, however, the actual pace of activity is anemeic. New home sales are competing with the supply and price discounts of exisiting homes, so it seems it will be some time before new housing activity will be a significant contributor to GDP.
The drama surrounding the debt crisis in several European countries continues to be a significant distraction for investors as well as a catalyst for flight to quality. U.S. Treasuries were the main beneficiaries on Monday, although prices retreated at the market close. Even though bonds are flat this morning, the lower close on Monday has mortgage pricing worse today by .125% to .25%.
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