Market Analysis

Existing home sales rose 2.3% in May, which was slightly less than the expected 2.7% increase.  US Treasury bonds are up slightly in morning trading but the Fannie Mae and Freddie Mac mortgage-backed securities (MBS) are relativey flat.  Stocks are also relatively flat this morning.

The housing report released by the National Association of Realtors showed that housing inventory fell to 3.8 million existing homes which represents a 9.6 month supply down from a 10.1 month supply in April.  Additionally the median price of existing homes sold in May was $173,000 a 16.8% year-over-year drop. 

It is very possible we will have increased volatility as the US Treasury auctions for this week takes place with the backdrop of the 2 day Fed meeting.  The Fed is not expected to take any action but analysts will be looking very carefully to see if the Fed has a more optimistic forecast for near to medium term economic growth or if the Fed says anything about increasing their Treasury or Fannie Mae and Freddie Mac MBS purchase program.