The Woodlands TX is a HOT real estate market!
A nice start this morning; the 10 yr note opened at 2.58%, its granite wall, 30 yr MBS prices early on up 15 bp from yesterday’s 33 bp increase. Tomorrow April CPI will be reported. The advance from the same month a year before was the biggest since March 2012 and followed a 1.4% yr/yr rise in the year to March. Inflation isn't increasing as much as the data suggested, not much interest in the increase due to one-off issues.
We reported yesterday that FHFA is
going to begin relaxing credit and down payment constraints in the mortgage
market. The new director Mel Wall is turning his back to the stringent
credit and down payment rules set out by our main man Barney the Frank and
Chris Dodd and the then acting director of FHFA Mr. DeMarco. Finally Washington
is getting the message, without improvement in the housing sector the economy
will continue with little growth as it has been doing since the Dodd/Frank bill
that was rammed through Congress in a panic mode led by Barney Frank. An easing
in credit, down payments and risk retention forced on banks is coming as Wall
St formulates the details. Even most of the minions in Congress are beginning
to understand that without housing the economy will not return to solid strong
growth.
Nothing new in Ukraine/Russia
situation overnight; the Ukraine vote on the
presidency is still scheduled for May 25th. Until then we don’t expect much to
occur but there will still be a safe haven traded in US treasuries keeping
rates low. As we reminded yesterday, the safest sovereign debt, the US Treasury
debt, is at higher interest rates than rates in Germany and other ‘safe
countries’ so foreign investors are attracted to the US 10 yr if looking for a
safe haven to park money in case the geo-political scene boils over.
Nothing left on the schedule
today; all about watching the stock market and the 10 yr note. From a
technical perspective a close below 2.57% should drive rates lower on a
breakout of the recent tight range. Janet Yellen is scheduled to speak tomorrow; her remarks
thus far have moved markets. She put her foot in it a few weeks ago when she
said in effect the Fed would begin increasing interest rates in mid-2015. Since
that she has swung back to data dependent as the trigger to increase rates. She
and Treasury Sec Lew last week were sounding an alarm about the housing sector
keeping the economy from growing more rapidly.
At this point I would suggest to float your interest rate on the hope that rates will decrease slightly. Remember we have our FREE float down option that allows you to float your rate down if they decrease.
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