(302) 703-0727

(302) 703-0727

Financial News Update – August 24th

John Thomas August 24, 2007 Tags:

Durable Goods Orders soared in July, rising by a far greater than expected rate of 5.9% and scoring their largest gain in about a year.  Transportation goods such as airplanes, autos, and trucks led the surge, but other long-lasting goods like machinery, computers, and steel products also showed strong demand.  When excluding vehicles, Durable Goods increased by a still-strong 3.7%. This report is volatile from month to month, so Bonds didn’t react much on the strong economic news.

Sub-prime news abroad – The Bank of China (BOC) revealed a far greater exposure to US sub-prime mortgage investments than expected.  The BOC disclosed about 10% of their US Dollar denominated assets consisted of sub-prime mortgage investments valued at $10 billion. This story will continue to develop.

New Home Sales was reported at 870,000, which was better than expectations of 825,000. The monthly sales inventory came in at 7.5 months, which is less than last month’s reading and well below March’s reading of 8.3. And the median sales price rose 0.6% year over year. Overall a pretty good housing report considering the present landscape in the lending industry.

A number of economists believe the economy is moving toward a recession because of the events in the mortgage and housing sector.  We believe the Fed will soon begin to cut short-term interest rates in an effort to help the economy avoid this. With inflation on the decline and now inside the Feds target range, and with the Job market showing signs of moderating, the Fed should have a “green light” for a cut on September 18th.

Bonds are trading in a sideways pattern along key support at the 100-day MA, presently at $99.57.  We are continuing to advise floating as the Bond remains above this solid floor of support.

If you would like to apply for a Delaware Home Loan, you can APPLY ONLINE HERE, you can call John R. Thomas at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713

About John Thomas

John Thomas and his team are long-time Delaware natives. They know the local real estate market as well as they know the loan products that help them serve it. Dedicated to helping first-time buyers; the John Thomas Team are experts on first-time buyer loan programs (FHA, VA, USDA) and conduct monthly first-time buyer seminars that have been attended by more than 3000 Delaware buyers.

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