Existing Home Sales Hit a 2 year High

Even though Housing Starts were slightly lower than expected, financial markets are improving due to Existing Home Sales hitting a 2 year high.  Other than that, there is an absence of news both here in the U.S and Europe at the moment.  There is no shortage of discussion about the Fed’s move last week and the current political battle for president, but markets continue to hover near record levels with an economy that lacks traction and has persistent high unemployment.  One of the stated goals of QE3 is to inflate the stock market so that consumers feel confident to spend money.  As is evidenced by the stock indices, the goal is working.  Although politicians will be quick to take credit, the true credit for near record high stock values should go to the Fed.  Hopefully, the plan will work and the stock market will continue to climb while simultaneously holding mortgagerates low.  One key unknown continues to be the tensions mounting between Iran and Israel.  Watch and wait….  This may get ugly….  mortgage bonds are holding near their all time highs due to bond buying by the Fed, so we will advise locking on short term transactions.