We described the last quarter as busy. This quarter may turn out to be more than just busy. Starting out with an impeachment inquiry, very weak manufacturing data and a mixed jobs report — the next two-plus months could be very interesting to watch. Certainly, the Federal Reserve Board will be taking note of the reaction the markets have to what happens from here. And if the stock market’s first few days of activity in October are any indication, there will be plenty of reactions.
Overall, the stock market has held up pretty well this year, despite heightened volatility. Stocks have certainly been helped by lower interest rates and an economy which is slowing, but still growing at a healthy pace. If the economy does continue to soften, we will lose one of these factors, but lower rates should continue to support the market and the economy as well.
One area of the economy that is starting to shine, while the overall economy slows down? The real estate market is picking up, with higher housing starts and existing home sales. This is not a surprise, because real estate benefits most from lower long-term interest rates. There is a lot of latent demand in this sector and any condition which increases affordability can spur this demand into action. That is exactly what lower rates are doing – spurring not only purchase demand, but refinancing as well.
Dave Hershman is the top author in the mortgage industry. Dave has published seven books, as well as hundreds of articles and is the founder of the OriginationPro Marketing System and Mortgage School. Want to send this commentary and other news in a personalized format to your sphere database or on social media? Sign up for a free trial at www.OriginationPro.com.