It has been a while since I last wrote a blog, it has been a very busy few months for me; I hope you have all been checking out the daily updates posted by Gary! So much has happened in the past 2 months for not only the real estate world, but the financial world. I won’t go too much into detail over what I like to call “clutter,” however it is my responsibility to break down issues that affect you & me, and the relationship we have in business.
Ok let’s discuss this mess..! We’ll go back a little bit, and talk about what the market is doing. The biggest item affecting the market is QE3 and whether the FED will continue to buy Bonds to the tune of $85 billion a month or to taper to a lesser number. Back in September the FED was leaning toward a tapering mode which caused concern in markets. The DOW went down as did the price of treasuries which caused mortgage interest rates to rise.
Since then, the FED realized the economy is much weaker than anticipated and has taken a non-taper stance. Many economists believe that this non- taper stance will continue through the first quarter of 2014 and because of that and the weak economy, many believe that mortgage rates will decrease by the years end.
For simplicity purposes we conclude that if the economy is strong, QE3 might be reduced and rates will go up. If the economy is weak, QE3 will continue and mortgage rates will fall.
So Friday, November 8, 2013, a jobs report was released and most of the economists in the country thought that job creation would be relatively weak @120,000, many economists were concerned we wouldn’t even see that number. When the department of labor released their reports showing new jobs at 204,000…GASP!!!!! Most economists were shocked. Because the number of 204,000 shows such strength in economic growth, we saw an increase in mortgage rates today.
I could give you a forecast and my opinion about where things are going, however, speculation in my business is a cause for media frenzy and outlandish market changes, right Mr. Bernanke? But really; if you have the ability to buy a home you should; buy more than one if you can, it is a positive financial investment. If you can refinance and save some money, then you should! Remember it isn’t about the interest rate, but about how much money you save per month. One thing we know is for sure, your investment in your home is one of stability and gain and in my book, that’s always a positive!!!!