Mortgage Report: July 30th - August 6th
U.S. treasuries did extremely well last week and gained ground they had lost five months earlier. The yield dropped 16 basis points and ended at 4.80%. The stock market lost 586 points for the week overall. When traders and investors unload stocks they usually place their monies in bonds and that's why home loan rates stabilized. This week the Personal Consumption Expenditure Index and monthly jobs report are expected to be released and will have an impact on the yield. If inflation numbers are lower than expectations while the data for the economy is worse than expected home loan rates should improve. As a general rule, weaker than expected economic data is good for rates and positive data causes rates to rise.
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Best,
Steven
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Comments (3)
So, what about the collapsing market bubble? Is the NYC housing prices going to go down?
Posted by Bobby | August 1, 2007 11:59 PM
Bobby,
in my opinion, if this subprime,alt-A spreads more, then Wall Street bonuses wont be too great. Can the 'MAJORITY' of buyers afford these prices without these bonuses and the cloud of uncertainty of layoffs?
I personally think prices will go back to 2004 levels (i.e before all the wealth made by homeowners, banks was generated by loose lending )
Posted by uwsider | August 2, 2007 11:35 AM
NYC is still dealing with fundamentals that favor real estate prices - low inventory, lots of jobs, high salaries, high buyer demand, rental vacancy rates below 1%, weak US dollar, etc..
However, there is a repricing of risk in the tradable markets and no one knows when the markets or how the markets will absorb this yet. Give it a few more months to play out. If stocks do get hit because of uncertainty, that may start trickle effect as described by uwsider above and weaken bonuses, jobs and salary for 2008. It may also lead to nervouse sellers and those who must sell adding to inventory.
It hasnt happened yet, but certainly something Im watching. If wall street hangs in there and absorbs this, then its much of the same in Manhattan with these fundamentals in place favoring real estate prices.
Posted by Noah | August 2, 2007 10:06 PM