Mortgage Market Update - July 6

Unfortunately due to the second week of primarily negative economic reports and data, it is not easy to find many good things to write about as much as I am trying - sorry!
The talk of a double dip recession has been increasing due to increasing trend of negative economic reports hitting the market. It is becoming clear to many people that we are further from a recovery than most of us had hoped.
Housing received a reprieve this week when the Senate and House finally agreed to push forward the independent bill of extending the tax credit until September 30th. The credit extension is only for homebuyers that were in contract by the required April 30th deadline.
The Case-Shiller Home Values Index rose in the months of April by .7% which goes along with the increased activity of home purchases that was reported during the same month. On the opposite side of the spectrum, pending home sales fell off a cliff in the month of May with the National Association of Realtors reporting as 30% drop.
The Mortgage Bankers Association reported that last week purchase applications dropped 3.3%. On the bright side, refinance applications jumped 12.6% with the lowest interest rates on record available to homeowners, 4.67% and 4.06% for a 30 and 15 year fixed rate respectively.
Other significant news reports for the week are:
• The stock market continues to take a beating on concerns about the economic recovery as well as the weakness in overseas economies.
• ADP reported job growth of 13,000 which was is an improvement however far below the projected 61,000.
• Consumer confidence dropped considerably slowing purchases in housing and auto sales.
• ISM Manufacturing Index and construction spending both declined slightly however these declines are not alarming.
• The House finally voted to extend unemployment benefits for those whose benefits were to expire on June 30th. The Senate is expected to pass the measure in about 2 weeks when they return from summer vacation.
• The employment situation reported on Friday showed that the national unemployment rate dropped from 9.7% to 9.5% indicating that the employment sector is still recovering at a very slow pace.
Despite all of the negative news, I still remain optimistic for housing. With record low interest rates and no sign of them increasing, housing is becoming even more affordable and demand will increase.
Fortunately, there are very few significant reports scheduled for next week which will hopefully lead us to a less volatile week in the markets. News on tap for next week is:
• Wednesday July 7th - MBA Purchase Applications
• Thursday July 8th - Weekly Jobless Claims