Mortgage applications for home purchases remained relatively high in the latest week, with the dust beginning to settle from recent distortions related to the holiday season. The data continued to make clear that home sales have bottomed.
While the rebound thesis holds water, the rebound is occurring at a time when home sales are normally very low. Hence, inventory levels are probably falling only very slowly. Persistent strength will be needed into the peak selling season if the current rebound is to stabilize the housing situation. Rising interest rate levels might interfere with the rosy scenario.
The Mortgage Bankers Association's weekly index on mortgage applications for
home purchases fell to 439.70 in the week ended Jan. 12 from 472.80 the previous week, which was the highest level since January 2006. The current level is comfortably above the one-year average of 407.12, and it has been above the one-year average for seven straight weeks, the longest streak since October 2005.
The next piece of news on housing will be released today at 1 p.m. with the
release of the National Association of Home Builders' Housing Market Index, which is expected to increase to 33 from 32 in December (readings of 50 or higher signal growth). The odds are growing for an increase in the index.
P.S. Will you be there when Cramer makes his next move?
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Tony Crescenzi Blog Japan Still Diversifying Its Dollars 1/17/2007 11:33 AM EST China' holdings of U.S. Treasuries increased but Japan's holdings decreased for a second month.
Tony Crescenzi Blog Auto Production Has Bottomed 1/17/2007 10:18 AM EST Industrial production in general is on the rebound.
Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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