Current position: Carefully Floating
If you missed yesterday's call with Rene Rodriguez, it was amazing! There were discussions on effective communication and role playing, teaching you how to overcome objections in the current market. Make sure to watch the replay HERE.
Stocks and mortgage bonds are both higher to start the day.
Pending Home Sales
Pending Home Sales, which measure signed contracts on existing homes, rose almost 1% in February, but you wouldn't know that was good news if you listened to Diana Olick on CNBC.
Diana did her best to put a negative spin on the report, saying that pending sales "eked out" a "small" gain, doing her best to make you dismiss the number. This is the same person who made a huge deal out of the 0.2% decrease in the median home price earlier in the week and failed to mention it was not real appreciation and was skewed due to the mix of sales.
She also forgot to mention that it was the third month of increases in a row and was much better than expectations, looking for a 3% decline. These are signed contracts from February, when rates moved 1% higher. Diana explained that this is the reason we saw a much smaller gain, using it as a point of weakness.
In reality, she should have explained that this shows the underlying strength in the market: even though rates rose by 1% in February, we STILL saw an increase of almost 1% in sales! Sales are now down 21% from last year, so there is still more work to be done, but we believe the worst is behind us.
Imagine what the reaction from buyers will be when rates move down to the low $5's. As rates move lower and with the spring home buying season coming, we expect activity to rebound nicely in the coming months.
The MBA released their mortgage application data for last week, showing that purchases rose 2% last week, the third week in a row of gains. Purchases are now down 35% year over year.
Interest rates decreased from 6.5% to 6.45%, which is between 1 5/8 and 1 3/4 higher than this time last year. Refinances rose 4% for the third week in a row and are now down 66% year over year.
Mortgage bonds are trading in a narrow range between a dual floor of support at the 50 and 100-day moving averages and overhead resistance at the 100.758 Fibonacci level. Bonds are attempting to test resistance this morning, and if they are able to break convincingly above it, the next stop is the 200-day moving average. Begin the day carefully floating.