Tuesday, April 08, 2008

Pending Home Sales Fall

- Pending Home Sales for February fell 1.9% versus estimates of a 1.0% decline and an upwardly revised .3% gain in January.

BOTTOM LINE: The number of Americans signing contracts to buy previously owned homes declined more than forecast in February, Bloomberg reported. Pending resales fell 9.8% decline in the West, 5.5% in the South and 3.7% in the Midwest. Pending sales increased 3.2% in the Northeast. According to Bankrate.com, the average 30-year fixed rate mortgage is currently 5.68%, down from 6.12% last month and down from 6.42% in June of last year. The Homebuyer Affordability Index is at the best level in five years. The US dollar index is .16% higher and the 10-year yield is unch. on the report. Fed fund futures now imply a 62.0% chance for a 25 basis point rate cut at the upcoming April 30th meeting and a 38.0% chance for a 50 basis point cut. I think a 50 basis point cut is highly unlikely at this point. I continue to expect home sales to trend above expectations over the coming months on pent-up demand, lower prices, lower interest rates and less fear.

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