Market Update 02-23-2011

Existing Home Sales surprised to the upside, jumping 2.7% to 5.36 million units. The highest level in eight months was fueled by distressed sales which made up 46% of the index. All “cash” purchases were strong as well, with investors getting in on the bargains. The West led with way with gains of 7.9%. The only loser was the Northeast, down 4.6%. Overall, we’re starting to see some cleansing of distressed properties and a welcomed pickup in activity. Mortgage applications reflected much of the same as the MBA index increased 13.2%. Refi’s jumped 17.8% and purchases increased by 5.1%. Bonds, notes, and mortgage backs are doing better once again but the moves are muted. Surging oil prices and Middle East tensions are the driving forces. Speaking of oil, here is the latest chart of WTI crude. Stealth move of $10.00 in two days! Currently, the 10 year note is up 5/32’s (yield 3.44%), mortgage backs unchanged to up 1/32nd, and stocks off 70 on the Dow. Very tricky to handicap interest rate movement so be careful out there. We’ll update you on the close to see where we finish the day at.

Scott Eggen
SVP, Capital Markets
PrimeLending, A PlainsCapital Company18111 Preston Road, Suite 900Dallas, Texas 75252

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