Rates Lower After Strong Auction Demand
Highlights Average 30 yr fixed rate Stocks (Weekly)
Continuing Jobless Claims fell to the lowest level since December 2008
The Fed lowered its forecasts for inflation in 2010 and 2011
As expected, the European Central Bank (ECB) made no change in rates
The Dow stock index reached an 18-month high
This week: -0.05% Dow: 10,950 +50
Last week: +0.10% NASDAQ: 2,425 +25
Although this week's economic data was generally stronger than expected, it was overshadowed by solid demand for the Treasury auctions and intensified concerns about the economic situation in Greece, which helped mortgage markets. After reaching the highest levels since August, mortgage rates ended a little lower than where they ended last week.
Recent increases in yields on long-term fixed-rate securities such as 10-yr Treasuries and mortgage-backed securities (MBS) appeared to have been sufficient to attract investors. Very strong demand from both foreign and domestic investors for Wednesday's 10-yr auction pushed Treasury yields lower, and mortgage rates followed. Increasing the appeal, renewed worries about the fiscal situation in Greece caused investors to seek the safety of US securities. Comforting statements from Fed officials that they expect inflation to remain low for a long time also added to the demand.
In the housing sector, February Pending Home Sales jumped 8% from January, far exceeding the consensus forecast. Pending Home Sales are a leading indicator of housing market activity. The chief economist of the National Association of Realtors (NAR) considered the data to be a potential sign of a 'second surge of home sales this spring'. To receive the homebuyer tax credit, contracts must be signed by the end of April, which likely boosted the results for February. As buyers seek to take advantage of the program, March and April pending sales may show strength as well.
Courtesy of:
Craig Bohall
Loan Officer
5304 E Southern Ave #101
Mesa, AZ 85206
480-344-3646
craig@myazmp.com
www.myazmp.com
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