6/16/10

Today we have already had the Producer Price Index which was down.3%. May Building Permits were down 5.9%, and Housing Starts were -10%. Some would say, “Why build new houses when there are so many old ones on the market?” Housing continues to be a weak point in the economy, in addition to the employment picture, despite a huge amount of help from the government. Housing Starts were expected to be down quite a bit (but a 19-year low?), and may signal a trend which some believe will last several months. Mortgage applications for purchases are now down 49 percent from their April peak and the rate of delinquencies and foreclosures continue to rise. Consequently, housing starts should pull back in the second and third quarters, but begin to pick up some momentum later in the year. After all this news, and even with stocks pointing down, mortgage prices are slightly worse this morning.