8/21/09

Nothing on the wires early on but at 10:00 we got July existing home sales. They were expected to be +2.2%, but sales were up 7.2% to 5.24 mil units. The sales are the highest since Aug 2007. The median sales price was down to $178,400 and there is a 9 month supply based on present sales. The inventory level increased 7.3%. The initial reaction to the strong sales sent mortgage prices slightly higher.
A cloud on the horizon is the auction next week. The Treasury will be selling $109 billion in 6-month bills, 5-yr notes, 1-yr T-bills, 2-yr notes, 3-month T-bills, and 7-yr notes. This, by anyone’s measure, is a lot of supply. Currently mortgages are about unchanged from Thursday afternoon. Have a great weekend and let me know if you have any questions.