Interest rates recovered somewhat this past week, but not to the low levels of just two to three weeks ago.
In other news, the National Association of Builders announced US housing starts were down 3.3% in May, and down 32.1% over the previous year. Association executives asked Congress to pass a housing stimulus legislation package to alleviate weakness in the housing sector.
Also, the FBI arrested 400+ people in the mortgage and real estate industry in a broad sweep of mortgage fraud that cost consumers over $1 billion. Most were involved in loans using fake income numbers, and falsified appraisals.
The most important financial data this week will come after the Fed Meeting. Most analysts are forecasting that the Fed will leave rates steady this time, even as it acknowledges some troubling signs on the inflation front. But, they are also saying that we will see some increases before the end of the year.
Other scrutinized data will Home Sales. Housing starts have plunged to the lowest level since March 1991, the tail end of the 1990-91 recession. Housing permits also dropped, to the second-lowest level since July 1991. At the same time, the Census Bureau reported the steepest increase in housing completions since September 2006. This has helped keep the inventory of unsold new homes high - it was at 456,000 in April, a 10.6-month supply. The month's supply of homes for sale was in double digits for the second straight month for the first time since September-October 1981.
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Lew Corcoran, ASP®, IAHSP, IAHSP-CB