MBS UPDATE: EXPENSIVE STACK = ERRATIC RATES
We continue to move up "up in coupon" while the Federal Reserve remains the supportive source of funds for mortgage banker's supply of production MBS coupons (the loans you originate). At these high prices MBS buyers will not jump to buy up new supply of MBS...instead they will use it as a reason to allow prices to cheapen up a few ticks before re-entering the MBS market as a buyer. This is a necessary evil of the "up in coupon" game and will be a contributing force behind short periods of higher mortgage rates.
APRIL FN30_____________________________
FN 4.0 -------->>>> -0-02 to 100-09 from 100-11
FN 4.5 -------->>>> -0-05 to 101-28 from 102-01
FN 5.0 -------->>>> -0-01to 102-30 from 102-31
FN 5.5 -------->>>> +0-01 to 103-18 from 103-17
FN 6.0 -------->>>> +0-01 to 104-03 from 104-02
APRIL GN30_____________________________
GN 4.0 -------->>>> -0-02 to 100-15 from 100-17
GN 4.5 -------->>>> -0-01 to 102-04 from 102-05
GN 5.0 -------->>>> -0-01 to 103-13 from 103-14
GN 5.5 -------->>>> -0-01 to 103-30 from 103-31
GN 6.0 -------->>>> +0-02 to 104-09 from 104-07
Range bound FN 4.0....
More Progressive Housing
Data Released...sort of
The National Association of Realtors reported this morning that "Existing-home sales - including single-family, townhomes, condominiums and co-ops - rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from a pace of 4.49 million units in January"
So sales of previously owned homes unexpectedly rose in February to a pace of 4.72 million units per year.... economists were expecting the pace of existing home sales to drop to 4.45 million units from the unrevised January pace of 4.49 million units per year. Yes....Much better than expected and the largest monthly sales increase since July 2003. THERE IS BUT...well two of them...
Lawrence Yun, NAR chief economist, said first-time buyers accounted for half of all home sales last month, with activity concentrated in lower price ranges. "Because entry level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February."
"Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price."
The median sales price of both single family and condos in January was $165,400, a 15.5% decline from one year ago. That is second largest price decline on record after January. Prices fell by the most in the West, by 30.3% over the year.
NAR's AFFORDABILITY INDEX IS AT A RECORD HIGH!!! Buyers, however, are curious if housing will continue to become more affordable...
NAR Chief Economist Lawrence Yun said February's increase represents a partial rebound from the January's tumble, adding that a "meaningful" uptick probably won't occur for another three to five months.
Working on Toxic Asset Plan Commentary....