This past week saw continued volatility in the markets as corporate earnings were disastrous and look to be the worst since 2001. Also, the Fed cut the short term interest rate by .75% in an emergency meeting. This did not have the desired effect of stimulating the economy. On the contrary the emergency cut caused markets around the world to tumble as investors lost confidence in the Fed’s understanding and ability to control the the world’s largest and most important economy. In their defense I don’t think the Fed had any idea how global the US economy truly is. The balance of the week saw stocks regain some footing and bonds retreat.
Existing home prices fell 1.8% for the past year. Even though this type of “the sky is falling” news does sell newspapers, the huge gains in equity in real estate over the past five years cause us to focus on the positives of home ownership in most areas of the country. Also, rumor has it that the conforming lending limit is scheduled to increase. This could mean as much as a 1-2% reduction in interest rates for current loans above $417,000.
A jam-packed week of economic reports awaits us as well as continued market volatility as economists try to figure out what direction our economy is headed.
On Wednesday of this past week The David M. Damare’ saved a client over $45,000 in interest on a $200,000 loan over 30 years.
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Stay tuned and stay in touch with your mortgage professional. Thank you for the opportunity to serve you and your clients. David. 919.851.0999