Call me crazy, but I thought a near 10 percent monthly drop in existing home sales might affect the markets today. If not the sales, then maybe the 5.2 percent annual price drop, or the rise in inventories to an 8.6 month supply. Nope. Apparently that’s not bad news to financials today.

Even the Realtors couldn’t sugar-coat this one, with chief economist Lawrence Yun calling it a “setback” in the monthly press conference and later telling me, “The traditional buyers who are looking for a new home, whether because of changes in family circumstances, job relocation, they are not making that move. And the tightness of the credit can still be attributed to that.”

Credit is tight, but no tighter than it has been for a few years now. Yes, FHA loans (loans geared to lower income borrowers and insured by the Federal Housing Administration which requires a small down payment) are more expensive, but the low end of the market, where we might find more FHA borrowers, is actually improving, while the middle of the market is stuck. In addition, the percentage of all-cash buyers rose to an all-time high of 33 percent.

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