Houston's Rate Sheet

Bubble? What Bubble?

Despite rising interest rates, consumers appear confidant that real estate is still worth buying. According to the Commerce Department, New Home sales rose 13.8 percent. The increase was a recovery from the 10.9 percent decline in February.

Builders were able to sell many of these homes by dropping the price. The median price of homes sold in March dropped to $224,200, down 2.2 percent from February prices. As long as builders make money and buyers the product the demand, then all is well in the world. Hopefully, builders can keep selling homes without continuing to drop prices past the point of un-profitability.

As of 3:15 p.m. in Houston, Treasury prices were down in response to the news. Strong durable good orders helped drive down the price. In response to lower Treasury prices, yields on the benchmark 10-year not rose 3 basis points to 5.10 percent from yesterday's 5.07 percent. We can expect mortgage rates to follow.

For additional information on these issues visit Bloomberg.com.

posted by Vincent Biondillo @ 5:30 PM