Existing Home Sales (August)
-Seasonally Adjusted Annual Rate 5,030,000
-Previous was 4,670,000
-Month/Month Change +7.7%
–Full report from NAR
-Below is a chart of monthly Existing Home Sales (grey bars) and mortgage rates (brown line.) The value if that chart is mitigated by the First Time Homebuyer credit which expired April 2011. People not in hurry to buy when they think home prices won’t increase any time soon.
MBA Mortgage Index
-Purchase Index, Week/Week Change -4.7%
-Refinance Index, Week/Week Change 2.2%
-Composite Index, Week/Week Change 0.6%
-Positive Existing Home Sales data mitigated this soft purchase index.
-The best solution for the housing sector would be to encourage the clearing of existing inventory and shadow inventory by providing more FNMA lending for rentals. The fact is that there are folks who are in homes they own and haven’t made payments on for months. The goal might be to have them stay but as renters.
The FOMC meeting ends today. I don’t believe that the usual discussion about rates or money supply are paramount. The Fed must explain what its plans are for Eurozone dollar liquidity.