Morning Report - Little to no progress on foreclosure inventory in the Northeast

Vital Statistics:

	Last	Change	Percent
S&P Futures	1844.9	4.3	0.23%
Eurostoxx Index	3153.3	19.6	0.62%
Oil (WTI)	101.8	0.5	0.52%
LIBOR	0.233	0.000	-0.11%
US Dollar Index (DXY)	80.16	0.044	0.05%
10 Year Govt Bond Yield	2.68%	0.00%
Current Coupon Ginnie Mae TBA	105.2	-0.1
Current Coupon Fannie Mae TBA	104.2	0.0
RPX Composite Real Estate Index	200.7	-0.2
BankRate 30 Year Fixed Rate Mortgage	4.33

Stock markets in the US are following overseas markets higher. Bonds and MBS are flat

Personal Income and Personal Spending rose .3% month over month in February. January's spending number was revised down. The core personal consumption expenditure growth rate was 1.1% annualized, showing inflation remains tame and gives the Fed leeway to keep interest rates low. For all the talk about "six months" and "considerable time" don't forget that this Fed takes the dual mandate seriously and believes inflation can be too low. If inflation remains around 1%, they will want to pursue policies to push it closer to 2%. The Fed has been trying to create inflation for six years and the numbers remain stubbornly low. 

Note that in response to recent data, Barclays has trimmed its estimate for Q1 GDP to 2% from 2.4%. 

The latest CoreLogic Market Pulse is out, with a couple of good articles. First, it discusses how housing affordability differs between first time homebuyers and buyers with an existing home. Affordability has been declining, but it has been declining more for first time homebuyers, which may partially explain why the first time homebuyer remains on the sidelines. Until they return to the market, we are going to have this sort of abnormal market, IMO. 

Foreclosure inventory is down 31% nationally from a year ago to about 837,000 homes. or about 2.1% of all homes with a mortgage. In states like California, professional investors snapped up the foreclosure inventory and at this point supply is constrained and prices are rising. Not so in the Northeast, where very little progress has been made on the foreclosure inventory, and unsurprisingly prices have barely budged.