Real Estate & Market Report: March 11, 2016 – With a lack of economic data this week, both domestically and internationally, there has been little for the stock market to act upon.

• The week has seen the market trading in a fairly narrow margin which has given investors a little bit of a breather.
• Of course movements in the market is where the greatest opportunities exist however every so often a market calming can be a good thing.

The biggest factor driving the markets has been the stabilizing and rebound in oil prices.

• A barrel of crude oil now sits at just under $39 a barrel.
• This is up 50% from February’s low of $26.
• Many analysts, for what their opinion is worth, believe that oil prices are likely to be sitting at the bottom at this time.
• OPEC and Russia seem to be working on an agreement to curtail some production of oil to continue in keeping prices stable.

Many people have been asking me in response to my previous commentary in the newsletter as to why low oil prices are such a problem for the national and international markets? The simple answer is that with oil priced at such a low point as we were before, oil companies cannot remain profitable. Even during the brief decline in prices, hundreds of energy companies filed for bankruptcy.

The bottom line is that energy companies, big and small, not only are traded in the stock markets, they make up a significant portion of market value.

• With so many companies in the markets losing money, and or going bankrupt, it had the ability to take down the markets. (Remember the housing crisis and how the banking industry almost went bankrupt…this is a similar scenario).
• Fortunately, it seems that that storm has passed globally and the markets have stabilized.
• The Mortgage Bankers Association reported this week that purchase applications rose 4.0 percent.
• Refinance applications declined 2.0 percent.
• Despite a strong mortgage market, home sales in general continue to remain flat.
• Lack of inventory is the main culprit in keeping overall purchase volume down.
• Despite the pent up demand, home appreciation is not out of control as we have seen in other low inventory markets in the past.
• Next week there are a number of housing reports due out.

The job market continues to remain very strong.

• Last week’s mostly positive employment report was followed this week withanother strong jobless claims report.
• First time claims are down to 250K which was far below most analyst’s expectations.
• Anything below 300k is considered very optimistic for the labor markets.
• There were no special factors attributed to the lower than expected number, which indicates that this is a real trend, and not based on any special circumstances.

Next week we make up for the lack of reports this week:

• Tuesday March 15th – Producer Price Index, Retail Sales, Housing Market Index
• Wednesday March 16th – MBA Applications, Consumer Price Index, Housing Starts, FOMC Meeting, Industrial Production, FOMC Forecast
• T hursday March 17th – First Time Jobless Claims
• Friday March 18th – Consumer Price Index

As your mortgage and real estate 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.