Pre-holiday Mortgage Reporting Unlikely to Bring Cheer

Today brings the release of existing home sales, new home sales, and housing price data. All mortgage news that is not expected to excite investors or economist about recovery in 2009. However, Wednesday's Mortgage Bankers Association's mortgage applications data is likely to be a ray of hope with mortgage rates trending downward.

Recovering home sales and stabilizing housing prices are the consensus criteria for economic turnaround in 2009. This pending mortgage data is unlike to give those signals. However, there are emerging glimpse of hope in the market with surging mortgage applications.

Ever the contrarian lately, the market has consistently evaluated traditionally positive indicators negatively.

Collapsing oil prices, which translates into discounts in gas prices, is viewed as indicative of global weakness in demand. Although, dropping prices at the pump are immediately putting cash into consumers pockets.

Weaken dollar, which sets off a boom in US exports and eases trade imbalances, is viewed as growing weakness in the US Federal balance sheet. Growing exports could increase demand in US commercial goods production, putting workers back into jobs.

Drop in Treasury yields, the tipping point for Federal Reserve actions that set off a precipitous drop in mortgage rates, is interpreted as catastrophic economic conditions. Current treasury weakness is likely to keep the Federal Reserve engaged until a sustained recovery is evident.

Holiday mortgage data may not bring Christmas cheer, but it is a short week. Time to reset our investor and consumer confidence for a brighter New Year in 2009.