Today's Market Report
Aug 23 2013
Well, the good news is that mortgages are seeing a nice little bounce today from the recent lows. The bad news is that it is in response to much weaker-than-expected housing data. New Home Sales dropped by over 100k units in July to 394k, a 13.4% drop from June. The market was expecting a number closer to 490k, but clearly, the recent run up in mortgage rates is having a larger-than-expected effect on housing. To be sure, I expected to see this in the August number after pre-selloff pipelines had be flushed out and families braced to send their kids back to school, but this July print caught me a little off guard. The market agrees. Mortgages are outperforming other benchmarks as investors are seeking the shelter of the bond markets. Fannie 3.5s are up about 20 tics since the housing data came out. Equities are close to unchanged on the day.