Cyprus Brings U.S. Stock Market Down But Housing Still On Upswing

The stock market this week has continued its recent consistent pattern of hitting new record highs. The pattern has lasted since last week and had been gaining momentum almost daily; however, on Friday it is possible the rising pattern may take a breather.

The stock market futures as of Friday morning are in negative territory primarily based upon news that Cyprus, (yes, that little known country that created market chaos last month) has indicated that they will need more money for the bailout. I personally do not understand why the markets would be concerned over this news for two simple reasons, and I am not being sarcastic.

First, history has taught us that bailouts always require more money than additionally requested. Second, they will get the money because the banking system will not be allowed to fail in Cyprus. These types of events have become normal operating procedure for every country that has faced a financial crisis in the last 3 years.

On Wednesday, the FOMC minutes were released and gave additional support for the stock market rally. Most members of the FOMC feel that the QE3 stimulus program is working and indicated that they are not ready to pull back on it.

Mortgage rates had been declining for about a week, and although they are not back to historic levels, they certainly have stimulated more refinances. The Mortgage Bankers Association reported that refinances for the prior week jumped 6%. Purchase applications unfortunately continue to remain stagnant. Most experts believe that the cause is not so much related to interest rates, but more so impacted by so many markets around the country having a shortage of inventory for sale.

The good news relating to the housing market is that in the last week the main stream media has significantly increased their reports on the improving housing market. Like with everything else the media impacts, the media can create movement in the housing market because the more they report on positive events and data, the more consumers will respond to take advantage of the rising home prices.

For those of you in the mortgage profession, real estate profession, or homeowner thinking of selling, it is my opinion that you should get ready for the market to start heating up. We have many positive things happening simultaneously. Housing reports are showing significant improvement in property values, the media is helping fuel housing demand, and we are entering the Spring selling season. All of these factors together stand to push housing to higher levels, as it is more and more likely that sellers that have been waiting will now start to place their homes for sale on the market.

The economic calendar for next week will provide some potential market movers :

• Tuesday April 15^th - Consumer Price Index, Housing Starts and Industrial Production
• Wednesday April 16^th - MBA Applications
• Thursday April 18^th - First Time Jobless Claims and GDP

I appreciate your business and look forward to talking to you soon! Have a great day!!!
 
Sincerely,

Cindy Tomlinson
Loan Officer

USLending Company

DRE Lic # 01520422
NMLS # 214851   

PS… FOLLOW ME on Facebook for the latest Mortgage updates