After a lower opening, Mortgage Bonds have clawed their way back. The 3rd Quarter Gross Domestic Product (GDP) was reported inline this morning at -0.5%. And while this negative reading depicts a sluggish economy, Wall Street is expecting future numbers to come in much worse. The outlook for the 4th quarter GDP shows expectations for a 6.0% decline…a very bad number.
Existing Home Sales were reported just slightly better than expectations. The median sales price of existing homes fell 13.2% over the past year, likely representing the largest decline since the Great Depression - the US has only been keeping these records for 40 years. The inventory of unsold existing homes rose slightly to an 11.2 month supply.
New Home Sales were reported at 407,000, which was the lowest reading in 27 years and below expectations of 415,000. The inventory of unsold new homes fell slightly to an 11.5 month supply. These were not good housing numbers, and inventories are very high. These levels will need to be worked down before we can see home prices stabilize and move higher. However, the abundant inventory and low interest rate environment provides opportunity for buyers to purchase homes below market prices.
Michigan Sentiment was reported in line with expectations and did little to influence the markets.
