Orange County Real Estate Thoughts - Market Update for Septemebr 30th
by Tony Leocadio
on Monday, September 30th, 2013 at 3:54pm.
All week, the budget battle in Washington loomed large over Wall Street. The lack of progress, with the deadline for an agreement just days away, kept investors cautious, sending the Dow and the S&P 500 indexes down for the first time in four weeks, although the tech-heavy Nasdaq showed a miniscule gain. The Senate did pass a bill to avoid government shutdown, but as of Friday, it still needed House approval. The U.S. will also hit its borrowing limit on October 17 unless the debt ceiling is raised. With all this going on, economic data held little sway.
That data, as usual, was mixed. Durable Goods Orders were up 0.1% for August, following their drop in July. New Home Sales were up in August but Pending Home Sales were off. The Commerce Department left Q2 GDP, Third Estimate, unchanged, at an underwhelming 2.5% annual growth rate. The Fed's favorite inflation measure, the Core PCE Price index, was up 0.2% in August and well within the Fed's target range, up just 1.2% for the year. But Michigan Consumer Sentiment for September fell to its lowest final reading in five months.
The week ended with the Dow down 1.2%, to 15258; the S&P 500 down 1.1%, to 1692; but the Nasdaq was up 0.2%, to 3782.
The ongoing Washington budget wrangling drove many investors to the safe haven of bonds and prices continued to rise. The FNMA 3.5% bond we watch ended the week up 1.03, to $101.24. National average mortgage rates fell again in Freddie Mac's Primary Mortgage Market Survey for the week ending September 26. Their chief economist commented, "These low rates should somewhat offset the house price gains... and keep housing affordability elevated." Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information.