Pending Home Sales

March Pending Home Sales, a measure of contract signings of existing
home sales, rose 3.2% m/o/m vs expectations of flat. The gains were in
the high foreclosure areas of the South and West as the Northeast and
Midwest saw declines. The average 30 yr mortgage rate according to the
MBA was 5.10% in Feb and fell to 4.77% in March and that likely was a
key catalyst for the improvement in conjunction with the lower prices
that foreclosures bring. One thing to watch looking out the next few
months is the end of the foreclosure moratorium at many banks and how
much more supply that creates. Also, to watch is the recent uptick in
mortgage rates in response to the rise in longer term bond yields. Today
the 30 yr FNMA coupon is rising to the highest level since March 17th.
Either way, foreclosures are bringing out the buyers and the faster we
get them, the faster we will clear the markets of excess inventories.

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