Inflation-Deflation
As we await the results of today’s 10 yr bond auction to gauge sentiment on inflation, the US$, US government finances and foreign appetite for longer term treasuries, a less scientific take on inflation expectations is looking at the number of Google search results for Inflation and Deflation. Search results for Inflation total 40,500,000 and only 4,660,000 for Deflation. With the average 30 yr mortgage rate rising to 5.57%, the highest since late Nov, the MBA said refi’s fell 11.8% to the lowest level since mid Nov and has fallen 65% from its high of the year. Purchases though rose for a 3rd week, by 1.1% and are at a two month high as tax credits have helped. ABC confidence rose 2 pts to -47, about in line with the average ytd. Interestingly, the Buying Climate (those that say its a good or bad time to buy things) index rose 6 pts to the highest since March ‘08 but its still just 9 pts above the all time low in Oct.
II: Bulls 47.7 v 42.5 Bears 23.3 v 25.3
Bulls at the highest level since Jan ‘08, bears lowest since Dec ‘07
June 10th, 2009 at 11:21 am
i can say that once our posted 30-yr rate popped over 5.0% the calls nearly died. the only good action in purchases is in the $100-200k range and they’ve slowed dramatically. the realtors are selling the tax credit hard, but figuring out how to monetize it is an issue.
edsel charles at market graphics put together an interesting chart showing the historical 30 fixed rate relative to purchase activity. i believe 8.125% was a traditional “kill” rate (anything above that and purchase activity declined), until about 2000 when he recalibrated the “kill” rate down to 6.125%. now that we’ve been in the 4’s it will be interesting to see where the “kill” rate goes and how long it takes public perception to catch back up.
June 10th, 2009 at 2:47 pm
Looks like you’re going to have to ban all URL shortening websites if you want to stamp out Cetin the Cretin from spamvertizing his shitty website.