The DOW finished the week at 12640.78 last Friday after a dark day on Thursday when it was hit with a 250.82 point decline due to bad economic reports here at home and abroad. The slide began after the Philly Fed manufacturing report said that there was a decline in manufacturing due to declining company orders. Plus, China reported a slowdown in its own manufacturing data. The Federal reserve didn’t help matters much after they said they were lowering their own expectations for economic growth and said it would extend its bond buying program through (called operation “Twist”) the end of the year. This disappointed investors who had hoped for bolder moves by the Fed to get the economy rolling again. That’s the bad news. Now for the good news; Gas prices keep getting lower. A report in USA today said that the darkening clouds of the slowing economy could provide a bright spot for consumers: Gasoline prices at $3 a gallon, or less, by autumn. Plus, the fact that the Fed is buying bonds means that rates will remain low-especially for home buyers.
Real Estate, Mortgage Industry, and other Economic News
There was a slide in home sales for May. But, the reason isn’t detrimental to the market. The small setback in the market is primarily due to the fact that there is a “shortage” of lower-priced homes for sale rather than a softening in demand, said Lawrence Yun, National Association of realtors chief economist. The NAR said shortages of lower-priced homes are evident in much of the country except the northeast and supplies are tight in all but upper-end markets in the west. Confidence among Home Builders ticked up this past month to a five-year high too. A further indication that the housing market is actually improving. The builder sentiment rose to 29 in June, the highest reading since May 2007-if that tells you anything.
“Lone Star Capital buying Cattleman’s” was a headline recently in the S.A. Express News. San Antonio’s Lone Star Capital bank, majority owned by Tom Benson (New Orleans Saint owner and Automobile dealership owner) has agreed to acquire Marble Falls based Cattleman’s National Bank. The purchase transaction is expected to be completed by October 1st. Lone Star has four branches in San Antonio. Cattleman’s has one branch each in Marble Falls, Johnson City, Blanco, and Dripping Springs.
Mortgage rates fell to yet another record low according to Mortgage buyer Freddie Mac. The 30 year fixed rate index fell to 3.66% from 3.71% just last week. When the Fed announced it would be buying more bonds from its operation “Twist” program-led mortgage rates to their current levels. The 15 year fixed rate index fell to 2.95%. If you were to ask me last year would mortgage rates be at these levels, I would have said no. What astounds me is that real home buyers are just trickling into Real Estate offices to start their process of home buying. My advice to would-be home buyer is this: Do not let the political climate keep you from buying the home of your dreams. If you do, all you’ll hear is doom and gloom from both parties. Look for the positives. The economy is growing, mortgage rates are very low and inventory is still wonderful. For those who do wait, all I can really say is “too bad for you”. You could have taken advantage of the times but instead-out of fear- waited and then you may well be paying higher rates and having to choose from a limited supply. Plus the fact that when that happens, home prices will surely be higher. Find a local Realtor and Mortgage Lender and buy now!
This article is for informational purposes only. Do not use it as financial advice. For questions/comments contact Tony Stevenson at 1.800.860.4660 or email: email@example.com