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Jason's market ramblings. June 16th 09

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Mortgage and Lending with Home Loan Investment Bank NMLS 49493

How to interpret today's data on new housing orders increasing by 17% in the month of May? Mortgage rates were beginning to look incredible as we were comfortably in the 4"s and the stock market was in the territory of being up ytd by 30%. Both of these would be strong motivators and confidence boosters to consumers.

Now we are in June and have had to deal with the rates increasing by one point. This may cool new housing starts a little but we still have the $8,000 tax credit out there and right now the credit has an expiration date of 12/01/09. Having a deadline on this money may keep a little bit of heat in the market. And why shouldn't someone be in the market today? It is unfortunate, but there are a lot of really nice vacant properties owned by lenders that these lenders want to sell now. Today's buyers can make their best deals and purchase a nice home.

This morning's news touches on inflation fears and at the moment, the threat of inflation doesn't appear to be that big. This is good for rates and we may see them decrease a little .Also, when looking at a 60 month chart on long term bonds, this month makes the 4th consecutive June in which rates have spiked only to come down later in the season. Real estate activity should remain hot through the summer and into the fall. 

I do think that the recent uptick in rates will have a negative effect on the new housing starts for June so we can expect next months numbers to show this and I'm curious to see how the market handles this because when these numbers are coming out, the rates may be slightly lower than today and I believe that pending purchase and sales agreements will be strong.

 

Your Trusted Advisor,

Jason

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Jason E Potrzeba

Loan Advisor

Acadia Advisory Group

Riverside RI 02915

(401) 580-7612 Cell

(401) 223-4975 Fax

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