With last week’s news that the Fed would commence another round of Bond buying, or Quantitative Easing (QE3), there was a lot of action in the financial markets. This has had a positive effect on home loan rates.
Quantitative Easing is the concept of the Fed buying Treasuries and Bonds all in an effort to stimulate the economy. The announcement comes as our economy continues to struggle with inflation remaining at a steady rate. News out of the marketing sector also agrees with these statements, as the New York State Manufacturing Index registered at -10.41 for the month of September, it’s last since April of 2009. Additionally, the Philly Index shows manufacturing becoming smaller for the fifth month in a row. The labor market was no different as last week’s Initial Jobless Claims report showed 382,000, which was above expectations.
On a positive note, Existing Home Sales rose for August to a two-year high. While most news regarding the economy has been negative over the past week, this is actually good news when it concerns Bonds as well as home loan rates. Home loan rates typically improve when the economy is struggling, which means now continues to be a great time to purchase a new home.
The important thing to remember in light of recent news is that while home loan rates are continuing to remain near historic lows, the goal of QE3 would potentially cause home loan rates to rise.
Coming up first this week is the housing data report from the S&P Case/Shiller Home Price Index, New Home Sales, and Pending Home which will be coming on Tuesday, Wednesday, and Thursday. These reports are coming on last week’s housing numbers. Following will be the Consumer Confidence Report on Tuesday as well as the Consumer Sentiment report on Friday.
Another report that will be closely watched will be the Initial Jobless Claims report, which will be coming on Wednesday. Of further importance is how the market will continue to react to the recent QE3 announcement. Remember, though, that now remains a perfect time to buy a new home. If you are in the market to purchase a new home, today’s market is very promising and offers many opportunities. I would be glad to help you.