MARKET COMMENT
Mortgage bond prices finished the week a little higher which helped rates improve. Rates started the week higher amid no data. The Treasury auctions generally showed solid foreign demand but lackluster domestic demand. There was some flight to quality buying of U.S. debt instruments in response to uncertainties in the Eurozone tied to a terrorist attack in Germany and upcoming elections. Domestic data was stronger than expected. Producer prices fell 0.1% versus the expected unchanged reading. However, the core, which excludes volatile food and energy, rose 0.4% versus the expected 0.2% increase. Weekly jobless claims were 234K. Analysts expected a reading of 250K. Consumer sentiment was 98 versus the expected 96.4 mark. Mortgage interest rates finished the week better by approximately 1/8 of discount point despite some volatility.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| NAHB Housing Index | Monday, April 17, 10:00 am, et | 71 | Moderately Important. A measure of single family housing. Weakness may lead to lower mortgage rates. |
| Housing Starts | Tuesday, April 18, 8:30 am, et | 1290K | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
| Industrial Production | Tuesday, April 18, 9:15 am, et | Up 0.2% | Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates. |
| Capacity Utilization | Tuesday, April 18, 9:15 am, et | 75.3% | Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates. |
| Fed “Beige Book” | Wednesday, April 19, 2:00 pm, et | None | Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates. |
| Weekly Jobless Claims | Thursday, April 20, 8:30 am, et | 235K | Important. An indication of employment. Higher claims may result in lower rates. |
| Philadelphia Fed Survey | Thursday, April 20, 10:00 am, et | 32.8 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
| Leading Economic Indicators | Thursday, April 20, 10:00 am, et | Up 0.4% | Important. An indication of future economic activity. A smaller increase may lead to lower rates. |
| Existing Home Sales | Friday, April 21, 10:00 am, et | 5.5M | Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates. |
EXISTING HOME SALES
The National Association of Realtors releases existing home sales data near the end of each month. The data is derived from a sampling of MLS data across the nation. The release shows the current sales rate for existing single-family, coops, and condos. A national figure and four regional figures are provided.
The housing market is a critical component of the US economy. A house is usually one of the largest assets a consumer owns. Housing usually leads market recoveries. The housing industry still remains in transition while some areas show strength, others languish. While the data usually isn’t a big market mover it still has the potential to result in some market volatility.
