RATES DECLINE MODESTLY IN SLOW SUMMER TRADING ON WEAK HOUSING REPORTS
[Lenny Holler, Preferred Empire Mortgage Company]
Continued slowing in the housing industry dominated this week’s economic reports. Sales of new and existing homes declined faster than economists expected, and the supply of available-but-unsold homes swelled. Existing-home sales in July were lower for the fourth straight month. Sales dropped 4.1% to an annual rate of 6.33 million units, steeper than the 0.9% decline that economists had expected and 11.2% lower than a year earlier.
The inventory of unsold existing homes, which has been steadily climbing since the fall, set another record in July. At the current sales pace, it would take more than 7 months to sell all of the available houses compared with 2005’s average of 4.5 months. Sales of new homes also fell in July, by 4.3% to an annual rate of 1.07 million units. Economists had expected a decrease of 1.8%. New-home sales were 21.6% lower than in July 2005. The inventory of unsold new homes rose to a record 6.5-month supply at the current sales rate, which was slightly higher than in recent months.
Rates will likely stay in a fairly limited range until after the Labor Day weekend. A variety of reports are set for release this week: the Conference Board’s index of consumer confidence (Tuesday); gross domestic product (Wednesday); personal income and factory orders (Thursday); and employment, construction spending, and the Institute for Supply Management index of manufacturing activity (Friday).
· 10 year treasury yield down for the week from 4.84% to 4.78%. 2 year treasury down from 4.87% to 4.86%.
· Oil up for the week from $71.14 per barrel to $72.51. Gold up from $612.10 per oz. to $622.00.
· The dollar was up versus the yen from 115.78 to 117.30 and the Euro was down against the dollar at $1.2756 from $1.2830.
· Stocks were down for the week (S&P500 down 0.55%, Dow Jones down 0.86% and Nasdaq down 1.09%).
Continued slowing in the housing industry dominated this week’s economic reports. Sales of new and existing homes declined faster than economists expected, and the supply of available-but-unsold homes swelled. Existing-home sales in July were lower for the fourth straight month. Sales dropped 4.1% to an annual rate of 6.33 million units, steeper than the 0.9% decline that economists had expected and 11.2% lower than a year earlier.
The inventory of unsold existing homes, which has been steadily climbing since the fall, set another record in July. At the current sales pace, it would take more than 7 months to sell all of the available houses compared with 2005’s average of 4.5 months. Sales of new homes also fell in July, by 4.3% to an annual rate of 1.07 million units. Economists had expected a decrease of 1.8%. New-home sales were 21.6% lower than in July 2005. The inventory of unsold new homes rose to a record 6.5-month supply at the current sales rate, which was slightly higher than in recent months.
Rates will likely stay in a fairly limited range until after the Labor Day weekend. A variety of reports are set for release this week: the Conference Board’s index of consumer confidence (Tuesday); gross domestic product (Wednesday); personal income and factory orders (Thursday); and employment, construction spending, and the Institute for Supply Management index of manufacturing activity (Friday).
· 10 year treasury yield down for the week from 4.84% to 4.78%. 2 year treasury down from 4.87% to 4.86%.
· Oil up for the week from $71.14 per barrel to $72.51. Gold up from $612.10 per oz. to $622.00.
· The dollar was up versus the yen from 115.78 to 117.30 and the Euro was down against the dollar at $1.2756 from $1.2830.
· Stocks were down for the week (S&P500 down 0.55%, Dow Jones down 0.86% and Nasdaq down 1.09%).
posted by rjgny2004 at 4:42 PM
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