Mortgage bond prices finished the week considerably higher helping rates improve. The market was aided by continued weakness in the euro zone and generally weak economic releases. Greece dominated the newswires with reports of bank runs and debt rating downgrades. Spain joined the discussion again as Moody’s downgraded 16 of their banks. Spain faces low growth, high unemployment, and large debts. Flight to quality buying of US debt instruments continued as a result.

The data showed higher than expected weekly jobless claims, considerably weaker Philadelphia Fed and LEI figures. Mortgage interest rates finished the week better by about 1/2 of a discount point.

New Home Sales data is compiled monthly by the Department of Commerce's Census Bureau and is gathered from builders throughout the country. The data represents new home sales for the nation as well as four areas of the country: the Northeast, the Midwest, the South, and the West. Information on the average price of a home, the number of homes for sale, and the supply of unsold homes are also provided. The data is an important indicator because it shows any strength or weakness in the housing sector. The housing sector data is valuable because when consumer spending changes, it appears in this sector first. Consequently, a chain reaction typically occurs. A slowdown in new home sales tends to lead to a slowdown in housing starts, which will continue to affect other indicators possibly continuing the economic worries, as has been the recent concern of most everyone.

New Home Sales data is often volatile and difficult to predict. Most analysts look at a three-month average in order to see any trends in the growth rate. Surges in the release are often greeted with little more than an average reaction in the bond market. However, the data remains significant in showing the condition of the housing sector of the economy. The housing sector as of late has been a major disappointment but the Fed hopes the low interest rate environment will help.

CONFIDENTIALITY NOTICE: This e-mail transmission and any attachments may contain confidential or legally privileged information. This information is intended only for the necessary business use of the individual(s) or entity to whom it is intended even if addressed incorrectly. If you have received this e-mail in error, please immediately notify the sender by e-mail at the address shown. You should delete this entire transmission from your files if you are not the intended recipient and you are prohibited from retaining, distributing, disclosing or using any information contained herein. Thank you for your compliance.

MA Guaranteed Rate, Inc. - Mortgage Lender & Mortgage Broker License MC 4994, MC 4995, MC 4996, MC 5362