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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (12866)	3/29/2000 6:10:00 AM
From: Justa Werkenstiff	Respond to of 15132

U.S. housing still hot despite higher rates By Mark Egan WASHINGTON, March 27 (Reuters) - The U.S. housing market regained strength in February as sales of existing homes rose during the month despite higher mortgage rates, which have made buying a house a more expensive proposition. The National Association of Realtors said on Monday existing homes were sold at an annualized pace of 4.75 million units in February, 6.7 percent above January's pace of 4.45 million units. February's report marginally beat the 4.7 million unit pace forecast by economists but was still 7.6 percent below the 5.14 million unit pace seen in February of last year, indicating some slowing as mortgage rates creep higher. February's higher sales came as the interest rate on the average 30-year mortgage rose to 8.33 percent in February, up from 8.21 percent in January and up from 6.81 percent in February 1999. The Federal Reserve has increased interest rates five times since last June, most recently last week, in an attempt to cool the economy, which is growing at a pace the U.S. central bank fears will eventually spark inflation. The housing market, which has boomed in recent years, is a key area of the economy which the Fed is hoping to slow down. But with consumer confidence high, employment strong and wealth soaring thanks to stock market and home equity gains, the housing sector has only slowed modestly, remaining remarkably robust in the face of higher interest rates. ``The fact sales improved in the face of continuing increases in mortgage interest rates demonstrates the very high demand for housing in the United States,' said NAR president Dennis Cronk. ``We expect the market to be relatively stable over the next few months, with more buyers switching to adjustable rate mortgages in order to qualify for loans,' he added. Despite February's gains, economists said the housing market is slowing, noting that the sales pace for the first two months of the year were about 10 percent below year-ago levels. That slowing, they said, would not add to the growing sentiment that the Fed may need to raise rates faster than the 25 basis point increments it has been implementing since last June. ``The home market is acting as you would have expected given the combination of higher mortgage rates and still strong employment growth and low unemployment,' said First Union Chief Economist David Orr. ``This would be a 'steady as she goes' report for the Fed.' Orr said the Fed would need to see a higher level of consumer inflation, excluding volatile food and energy components, before it felt the need to raise rates more aggressively than in recent months. MORTGAGES RISE Mortgage rates for 30-year loans are close to two full percentage points above the 6.49 percent lows seen in October 1998. But as interest rates have risen consumers have been turning to adjustable-rate loans, which were available at about 6.7 percent in February, to finance their home loans, thereby lessening the effect of the Fed's rate hikes on the interest-rate-sensitive sector. The housing market is a key sector of the economy for the Fed to slow because new home owners typically spend heavily to furnish and refurbish their dwellings, spurring consumer spending which has been the driving force behind the current economic expansion. Most economists expect housing to cool in 2000 from the record pace enjoyed in 1999. The inventory of homes available for sale rose to 1.09 million units from 940,000 units in January. At the current sales pace, there was 2.8 months' supply of homes available on the market, up from January's 2.6 months' supply which was a record low. The median home price fell to $131,100 from $132,200 in the previous month. The mean home sales price also fell, to $165,400 from $168,900 in January.

To: Justa Werkenstiff who wrote (12866)	3/29/2000 12:16:00 PM
From: Kirk ©	Respond to of 15132

I guess I missed it. I thought it was Naz 6,000 a few weeks ago. It WAS! I was floored to read it on his website. I've been pretty busy and not listening to CNBC while working so I must have missed his Monday appearance. Perhaps it is a typo but it IS on his website in both html and pdf formats. JoeB did say earlier he saw more upside in the DJIA over the NASDAQ but the lowering from 6000 t0 5000 seems significant. Again, I actually like this as I think it means sector rotation out of overvalued ones and into the good ones that (hopefully what I own) will continue to go up.