Dow rebounded 374, advancers over decliners better than 5-1 & NAZ advanced 110. The MLP index went up 2 + to the 174s & the REIT index gained 4+ to the 464s. Junk bond funds crawled higher & Treasuries were modestly higher. Oil rose 1 to the 71s & gold was off 1 to 1776.
AMJ (Alerian MLP index tracking fund)
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Existing homes sales fell in Aug for the 4th time in 5 months as buyers waited for more inventory & pinched their pennies. The number of contracts closed last month declined 2% to a seasonally
adjusted annual rate of 5.88M from an upwardly revised 6M
in Jul. The forecast called for a
drop to 5.89M contracts closed. "Sales slipped a bit in August as prices rose nationwide," said Lawrence Yun, NAR's chief economist. "Although there was a decline in home purchases,
potential buyers are out and about searching, but much more measured
about their financial limits, and simply waiting for more inventory."
Existing home sales slide as buyers sift through low inventory, pinch pennies
The House passed a bill in a 220-211 vote that would both prevent a gov shutdown & suspend the debt limit in a step toward preventing possible economic calamity. All Dems voted for it & all Reps opposed it. As the bill heads to the Senate, Reps are threatening to block it, which could leave Dems scrambling to find another way to avoid a federal funding lapse — or even a first-ever default on US debt. Worries about a looming default & the economic damage it would cause contributed to a US stock market drubbing on Mon. Congress has to pass a funding plan by Sep 30 to prevent a shutdown. Separately, the US will exhaust all of its options to keep paying its bills sometime in Oct, Treasury Secretary Janet Yellen has told congressional leaders. The House-passed plan would keep the gov running thru Dec 3. It would also suspend the debt ceiling into Dec 2022. The bill would put $28.6B toward natural disaster relief & $6.3B toward resettlement of Afghan refugees. Senate Minority Leader Mitch McConnell has said Reps will vote for a standalone funding bill but not legislation with a debt limit suspension attached. While Dems have pointed out that the GOP signed off on huge emergency coronavirus relief bills since the last debt ceiling suspension, Reps have said their counterparts should move to prevent default on their own as they prepare to pass a mammoth spending bill without the GOP. Ahead of the House vote, Senate Majority Leader Chuck Schumer warned Reps that failure to raise the debt ceiling could wreak havoc on the economy & critical gov benefits such as Social Security. “This is playing with fire. Playing games with the debt ceiling is playing with fire and putting it on the back of the American people,” he added. It is unclear how Dems would proceed if the legislation fails in the Senate.
House passes bill to avoid shutdown, suspend debt limit — but it faces hurdles with deadlines near
After a Labor Day week lull, demand for mortgages rose sharply last week from homeowners & homebuyers. Total mortgage application volume was up nearly 5% for the week, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index. Mortgage interest rates, however, didn't move, & haven't for the past 5 weeks. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548K or less) remained unchanged at 3.03%, with points decreasing to 0.30 from 0.32 (including the origination fee) for loans with a 20% down payment. Applications for a loan to purchase a home rose 2% for the week but were still 13% lower than one year ago. That annual comparison, however, is shrinking. Homebuyers really pulled back over the summer, as soaring prices & record low supply made for a toxic mix. Purchase demand last week was the highest since Apr. “Housing demand is strong heading into the fall, despite fast-rising home prices and low inventory. The inventory situation is improving, with more new homes under construction and more homeowners listing their home for sale,” said Joel Kan, an MBA economist. Applications to refinance a home loan increased 7% for the week but were 5% lower than a year ago. “This week’s refinance gain was driven heavily by an increase in FHA and VA applications,” Kan said. Those are low down-payment loans offered by the federal gov & tend to be favored by lower-income or first-time homebuyers.
Stronger mortgage demand points to September surge in home sales
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