|Last Week in Review|
|Last Week in Review|
“Over there… over there…” The old patriotic song hit it on the head, in terms of a key factor driving market action last week: news that countries are working toward a diplomatic solution to the situation in Syria. But what else impacted the markets? Read on for details.
In consumer news here at home, Consumer Sentiment fell to 76.8 from the 82.1 in August, below expectations, while Retail Sales in August rose by 0.2 percent, though this was also below expectations. The Retail Sales reading was the lowest reading since April and this is significant as Retail Sales account for about one-third of consumer spending, which is one of the main drivers of economic growth. August’s reading was not a good number but one reading doesn’t make a trend. It will be important to monitor this report in the months ahead.
In housing news, research firm CoreLogic reported that 2.5 million more residential properties returned to positive equity in the second quarter, although 7.1 million mortgaged residential properties still have negative equity. The recent uptick in home prices is the catalyst behind the positive numbers. And over on the foreclosure front, RealtyTrac reported that foreclosure filings in the U.S. declined by 34 percent year-over-year in the month ended in August. The decline is due in part to an improving housing market, job creations and fewer troubled loans.
What does this mean for home loan rates? Weak economic reports can often cause investors to move money out of Stocks and into safer investments like Bonds, including Mortgage Bonds to which home loan rates are tied. We saw some of that dynamic late last week, as Bonds stabilized after weak data was released.
All eyes will be watching the Fed meeting on September 17-18 to see if the Fed announces that it will start tapering the $85 billion in Bond purchases it has been making each month to stimulate the economy and housing market. These purchases have helped home loan rates remain attractive, so the decision is important to watch. With some economic reports still weak, and with inflation currently non-existent as evidenced by the wholesale-measuring Producer Price Index for August, the Fed has many factors it must consider in making its decision.
The bottom line is that home loan rates remain attractive compared to historical levels and now remains a great time to consider a home purchase.
Trackback from your site.
Our agents write often to give you the latest insights on owning a home or property in the local area.