Ron Granado Analysis Of Real Estate And Mortgage Market News For Week Of August 28th 2015
Stock market has shown a Wild Roller coaster ride the last couple of weeks, especially for the week of August 28th 2015. The main reason many economists say, is due to the growing concern that the Chinese economy is cooling considerably. Chinese government has recently lowered interest rates which affected real estate and mortgage market news dramatically as a way to boost foreign investment and deter inflation. Commercial construction in China, grew to levels much higher than our residential boom of ten years ago.
Vacancy And Looming Debt
Vacancy, looming debt, lower imports, due to rising wages for traditionally low cost manufacturing, have all contributed to a slow economy. The US, on the other hand, grew at 3.7 percent 2nd quarter, which was higher than most expected. This presents a scenario where our economy grows, theirs shrinks, and our mortgage bond debt may have to be liquidated to raise capital for their financial issues. Higher interest rates may result.
Real Estate And Mortgage Market News If Mortgage Rates Rise
If rates do rise, what can you expect? Purchasing power will diminish, as the cost to borrow will rise. If the short terms are risen, or if student loan rates go up, you can expect a smaller pool of buyers in the first time buyer market who still owe student loan payments. The long awaited question is will wages rise. We have been in relatively flat wage environment for some time, as benefit cost of insurance and unemployment continue to rise past the pace of inflation. In some states, like Illinois, Rhode Island, California, ad Mississippi, pension obligations and Medicaid fulfillment costs are bankrupting states who have more taking out, then putting in. In Illinois for instance, they have lost many high earners who have moved to warmer climates with more favorable tax rules.
Real Estate And Mortgage Market News In Near Future
The month of August saw a rise in closings, but a slowdown in new contracts as school is starting again, and turn times had to be normalized back to a manageable level for lenders and appraisers. With the upcoming changes to closing disclosure waiting periods(3 days), expect a push from industry professionals to get tons of contracts in with on the fence buyers and sellers before the October 3 deadline. Stay tuned for more real estate and mortgage market news by Ron Granado.
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