I got this email from Jessica Regan with GMH and she said I could share it with you. As real estate agents we are always looking for the "spark" that help us move our buyers get off the fence. I never really thought abuot using the stock market as a reason, but you can see that the stock market is a good cause for buyers to no longer procastinate!
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What's the Stock Market Got to Do With It? The stock market has been going like gangbusters since the beginning of the year. In fact, stocks are now trading at a new all-time high.A rising stock market will impact the housing and mortgage markets. We say that because rising stock prices impact household wealth. A rising stock prices (combined with rising home prices) have allowed Americans to regain the $16 trillion in wealth they lost during the last recession. In fact, economists calculate that net worth has topped the pre-recession peak of $67.3 trillion. When people feel wealthier they loosen the purse strings, especially for high-valuer items like homes. Therefore, we expect more people will be trading up this year, which is yet another reason we don't expect home prices to backslide. The stock market also tends to perpetuate its own trend: Downward momentum tends to lead to more selling and lower prices. The reverse is also true. Upward momentum tends to lead to more buying and rising stock prices. More money flowing into stocks will mean more money flowing out of bonds. Rising stock prices also tend to portend rising economic growth. This means the pressure for lending rates – including mortgage rates – to rise will likely increase. GMH said many times in the recent past that the risk of holding out for lower mortgage rates is on the rise. The surge in stock market prices provides us another reason to urge clients not to procrastinate. Sure, it's a tune we've been singing for a few months now, but only because it's so popular and so true . . . and that is the answer to what's the stock market got to do with it?! |
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