Week of: Monday, June 25, 2007
Present Market Conditions
Mortgage rates dropped slightly last week amid concerns that the housing market will continue to create drag on the economy into the second half of the year. In addition, on Friday the Dow Jones Industrial Average dropped 185 points, the S&P 500 Index lost 19 points and the Nasdaq Composite Index fell 28 points. Now many investors are holding their breath in anticipation of the many economic reports due to be released this week. Some of the highlights include personal spending and income, home sales, durable goods, and consumer confidence. In addition, the Fed will be meeting Wednesday and Thursday for their policy meeting to set the overnight lending rate.
Expectations
While bond yields have recently increased, investors aren’t expecting the Federal Reserve to change its 5.25 percent short-term rate. According to The Wall Street Journal, “With higher bond yields, the Fed now also has less reason to raise its target rate. That’s because businesses and consumers face higher borrowing costs, which are likely to produce slower growth ahead. In effect, the bond market is doing some of the Fed’s job of keeping total spending in the economy, and thus inflation pressure, within the economy’s normal capacity.”
Guidance
Given one of the strongest global economies in 30 years, attractive U.S. interest rates and the over supply of available homes for sale, the residential market continues to present excellent opportunities for home buyers. Consulting with a true mortgage professional will ensure every real estate transaction is optimized to meet your financial needs.
Authored by Georgie Cook
Traverse Mortgage Corporation
(231) 947-9700
(800) 968-3680
georgie@traversemortgage.com
