By: Fred Arnold
Santa Clarita Real Estate & Market Report: If you watched or listened to any news this week regarding the stock market, that is exactly what it sounded or looked like judging by trading behavior. One minute the stock market is down over 400 points, only to come back 300 points.
Then go up again. Today up over 200 points!
The craziness in the market is being driven by a number of factors, however none of them have to do with economic challenges in the U.S. As of late, the U.S. has the most stable economy of all major countries. The biggest problems are coming from Europe and China in which their data continues to indicate greater signs of weakness.
Real Estate and Stock Market Report
Because of how commerce is all connected globally, there is always a risk that a recession in either of these countries will have an impact on us here in the United States. Right now however… the main driver of trading volatility is fear and not hard facts.
The biggest scare to the U.S. economy is the concerns about Ebola. Because there are growing fears about a greater spread of cases in the United States, that is creating the fear of a potential health and economic crisis which could be a double whammy to the U.S. economy.
For example, if fears continue to grow, the first area that will be hit is the airline and travel industries People won’t want to get on planes or stay in hotels. Tourism would be next. That would just be the starting point and it would only grow from there. I am not in any way suggesting that this is what will happen. All I am saying is that this is part of the craziness driving the decisions being made by investors.
On a very positive note, mortgage rates have been dropping like a rock. Freddie Mac reported that rates for a 30 year fixed rate mortgage have crossed below the 4% threshold. This could very well stimulate refinancing and home purchases as long as the fears I mentioned previously do not become mainstream.
Consumers seeing that low rates can create great home buying and financing opportunities, this could be a potential boost for the housing market.
The final positive report for the week was the first time jobless claims. The decline of a surprising 23,000 did not appear to be related to any extraordinary factors.
Housing Market
Next week’s potential market moving economic reports are:
Tuesday October 21st – Existing Home Sales
Wednesday October 22nd – MBA Mortgage Applications and Consumer Price Index
Thursday October 23rd – First Time Jobless Claims and FHFA Home Price Index
Friday October 24th – New Home Sales
As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at 661-505-4300.