Merk Investements: Pending Home Sales

Pending Home Sales: July 2008 Pending home sales fell -3.2%, exceeding the -1.5% market consensus for the month of July. On a regional basis pending sales of existing homes declined -7.5% in the Northeast and -10.6% in the West. In the Midwest sales were up 2.8% and prospective purchases in the South were flat.

Pending sales of homes were hurt by the increase in the 30 year fixed rate mortgage to an average of 6.29% in contrast with the 5.81% average over the first six months of the year. While, the Federal backstop of Fannie and Freddie guarantees the basic functioning of the mortgage market and should provide some relief on mortgage rates in coming month, it does not change the fundamental condition of the housing sector. The existing stock of homes and the increasing rate of foreclosures will continue to put pressure on the price of homes overall.

This report was prepared by Merk Investments LLC, and reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any investment product, nor provide investment advice. Merk Investments does not own any of the stocks mentioned; this is not an offer to buy or sell any security mentioned.

Merk Investments: Pending Home Sales: July 2008