Existing Home Sales for May fell 3.8%, providing evidence low interest rates are not the only factor that drive home ownership. Tight credit markets, extreme and growing regulatory burdens, and job uncertainty are strong headwinds to the low interest rate environment. Details of the home sale report tell us 31% of sales were distressed sales, and at the current rate of sales there is a 9.3 month supply of homes.
The weak housing data’s effect on stock and bond markets was nil, as the markets continue to focus on a potential resolution to the Greek debt crisis. Optimism is high this morning that a deal is near, so stocks are higher and bond prices are lower. The yield on the 10 year note is hover just below 3% at 2.99%. Mortgage prices are worse by .125% to .25%.
The Fed begins its two day meeting today and the end of QE2 is in 9 days.
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