Markets are lower this morning on weaker commodity prices. Bonds and MBS are up small.
Pending Home Sales increased 3.5% MOM and are up 5.1% YOY. This is the best number in a year, and points to a strong Spring Selling Season. Lack of inventory remains a problem.
Janet Yellen will be speaking around noon EST today. Don’t expect her to break any new ground, but just be aware.
Inflation remains tough to find, but both BlackRock and PIMCO are calling for investors to add an inflation hedge, either by switching out of Treasuries into TIPS or by buying gold.
Barclay’s is calling the latest rally in commodity prices a dead cat bounce, and is calling for a steep decline as fast money exits en masse.
Home prices rose .52% month-over-month according to Case-Shiller. Prices are up 5.4% YOY. Portland, Seattle, and San Francisco reported the biggest gains. Again, tight inventory remains an issue, along with tight credit for the first time homebuyer.
Prices continue to defy gravity in New York City, however the demand for luxury condos is beginning to wane. 423 Park Avenue, now home of the tallest residential building in the Western Hemisphere, has 141 apartments for sale and luxury buyers are beginning to fade as foreign money is hesitant. Yet Manhattan is dotted with cranes, largely building high-end condos.
Homebuilder Lennar reported better than expected earnings this morning. EPS is the highest third quarter number since 2006. Average selling prices increased 12% to $365,000 while new orders increased 10% in units and 15% in dollar volume.