Housing starts fell in April by almost 13%...which was actually taken as good news for many. This means that fewer homes are being built which allows the real estate market to soak up some of the excess inventory. An excess of homes for sale=excess supply for the same amount of demand. Supply in excess of demand = lower home prices. When some of the inventory is sold out: prices of homes begin to stabilize. We are already seeing some stabilization in the housing markets...especially in certain segments.
New construction of strictly single family dwellings (meaning: excluding condos and apartments) was UP by 2.8%.
FNMA 4% was actually UP 3 bps on the day...and is floating right at the 100 day moving average. The 100 day MA is providing a floor of support for now. Rates still under 5% on the 30 year fixed.
Dow lost just 29 points.
Oil is up 62 cents...trading just under $60/barrel.
Something we haven't heard of lately is the VIX, the "Volatility Index" or "fear factor". The VIX went UNDER "30" for the first time since September of last year. This is GOOD. Investors are feeling more at ease and hopefully the "itchy trigger finger" goes away with more time. The volatility in our markets has been a big piece of the problem. Investors are looking for the faintest signs that they should pull their money or place their money and it has caused some wild swings as you know. PERSPECTIVE: the VIX was NEAR 90 in late October. Late October was just before the elections...so people were looking closely at their money at that time with a sense of fear. Values below 20 signal a less stressful time in the markets.
Have a great eve!
