Good news last week includes the Q2 2012 Gross Domestic Product (GDP) growing by 1.5% (above expectations), Jobless Claims dropping only 35,000 (below expectations), and Durable Orders rising 1.6% (above expectations). However, New Homes Sales did fall 8.4% in June while foreclosures increased for the first half of 2012.
Many wonder if the Fed will act with additional stimulus due to the recent market news. Another round of Quantitative Easing, or QE3, might be coming should the job market fail to pick up. If an official announcement of QE3 is made, Bonds fall, causing home loan rates to fall as well, since they are tied to Mortgage Bonds.
It’s important to remember that weak economic news typically causes money to flow out of Stocks and into Bonds which helps both Bonds as well as home loan rates to improve. The important point to take away from the recent market news reports is that now continues to be an excellent time to purchase or refinance a home as home loan rates continue to remain near historic lows.
To start off the busy week, Tuesday will see the release of the Personal Income and Spending report, the core Personal Consumption Expenditure, the Case/Shiller Home Price Index, the Chicago Manufacturing Index, and finally the Consumer Confidence report. Closely watched reports coming later in the week include Thursday’s Initial Jobless Claims report as well as the Jobs Report and the Unemployment Rate both coming Friday to cap off the busy week.
If you are in the market to purchase a new home, today’s market environment in Myrtle Beach is very promising and offers many opportunities. We would be glad to help you.
Graph Data Source: Haver Analytics courtesy of www.bloomberg.com.