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Persistent Correction
The Market Bull 2018

00:00 / 2:12

After opening mixed the major averages fell hard in morning trade entering the final hour with large losses once again. That said this correction is increasingly looking as if it has legs, based on extensive internal damage.

The Mortgage Bankers Association reports that its mortgage activity index gained 4.9% last week. Refi’s jumped 9.7%, purchase apps advanced 2%. The 30-year contract rate for a conforming loan increased to 5.01% joining conventional loans above the psychologically significant 5% level.

New home sales missed expectations substantially in September falling 5.5% to 553,000 units annualized, a figure 13.2% lower than a year ago. A 4th consecutive decline, and the 5th in the last 6-months. August sales were revised sharply lower as well. The Midwest was the only region to see sales advance, the Northeast and West both posted double digit sales declines. Month’s supply jumped to 7.1 a figure that will put meaningful downward pressure on prices. The median price fell 2.5% for the month to $315,900, 3.5% lower than a year ago.

The Federal Housing Finance Agency or FHFA reports that it’s purchase only home price index slipped .3% in August to a 6.1% gain from a year ago. At the regional level the Pacific saw prices increase .8% for the month and 7.3% from a year ago. Incoming real estate related data is soft and getting softer.

This is Caleb Lawrence Registered Investment Adviser Scotts Valley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call me toll free at 888-RICH PIG / 888-742-4744.

You can catch me on the radio at noon each business day as well on California’s central coast. KPIG 107.5 FM in the Monterey Bay or KPYG 94.9 FM in San Luis Obispo.

Rebroadcasts, additional writings, and other entries are also available on my Blog at www.clinvestments.com

Advisory services offered through Caleb Lawrence Registered Investment Adviser Inc.


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