Morning Report: Existing Home Sales rebound 1/22/16

Stocks are higher this morning as global markets rallied overnight. Bonds and MBS are lower.

Generally a risk-on feel to the market, as stocks and commodities are rallying. Oil is back above $31 a barrel.

The Chicago Fed National Activity Index improved to -.22 from -.36 last month, while the Index of Leading Economic Indicators fell 0.2%.

Existing Home Sales rose 14.7% in December to 5.46 million. November’s numbers were depressed by TRID, and it looks like much of those sales got bumped to December. This makes 2015 the best year for existing home sales since 2006. The median home price increased 7.6% to $224,100. Housing inventory continues to fall, and the 1.79 million homes for sale represents only a 3.8 month supply (6 – 6.5 months’ worth constitutes a balanced market). First time homebuyers accounted for 32% of all sales, while all-cash transactions fell to 24%.

The first time homebuyer is returning to the market, as FHA origination increases. After the FHFA cut FHA insurance premiums, we saw an increase in FHA origination.

Things might run a little slow today as the Federal Government workers will leave at noon to get home before Snowmageddon II hits DC. Fannie Mae pricing will be the most affected.

As Ted Cruz and Donald Trump dominate the headlines and the polls, the big Wall Street donors are relatively sanguine.

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