We have a slew of market news came out today for housing market. A mixed data negative news like sales of existing homes, Merrill Lynch loss due to subprime mortgages, and good news from the mortgage front.
- Existing Home Sales Fell 8% to a Lowest Record, NAR says.
- Merrill Lynch Post First Loss since 2001. They wrote down some $7.9 billion for what they called "bad bets on risky mortgages and other securities."
- The Market Composite Index, a measure of mortgage loan applications inched up for the week ending October 19 from 656.3 the week earlier to 656.5.
- The Refinance Index increased 4% to 2059.3 from 1980.9 a week earlier.
- The refinance share of all mortgage activities also up to 47% of total applications from 45.3%.
- The average interest rate for 30-year fixed-rate mortgages decreased to 6.21% from 6.4%.
- The average interest rate for 15-year fixed-rate mortgages decreased to 5.86% from 6.09%.
- The average interest rate for 1-year ARMs decreased to 6.1% from 6.17%.
The information coming out from Mortgage Bankers Association clearly shows that more people refinance than buying.
Buyers, here is the other good news: In response to tighter mortgage lending, Centex cut their home prices.
We heard this, too. States and municipalities around the nation already feel the impact of housing slowdown. California will roll out their muni bonds tomorrow to close their budget gap. The tax base is down. In Virginia alone, Gov. Kaine said the other day at NVAR convention, that the state has a budget shortfall of $645 million less than Maryland's at $1.7 billion. And according to Kaine, Virginia have already adjusted their revenue projections from housing sales.
With housing income takes a big chunk of states revenues, expect to see more rate cuts in the horizon.