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Michael Creed

Markets in a Minute | 10/16/2015

For the Week Ending October 16, 2015
Please enjoy this quick update on what happened this week in the housing and financial markets.

Producer prices recorded their largest decline in eight months, possibly a sign the economy is losing momentum. This raises doubts about a Fed policy rate hike.
Consumer prices dropped in September on cheap gasoline, but prices of other goods increased. Inflation remains low, which is supportive of lower rates.
Conversely, jobless claims were at a 42-year low this week. However, wage growth continues to be a problem, another factor that could support lower rates.

Last week saw mortgage applications spike ahead of implementation of TRID regulations. This week saw purchase mortgage applications fall by 34%.
More inventory may soon be hitting the housing market. Bank repossessions of foreclosures jumped 66% year-over-year in the third quarter.
A recent index shows residential property values increased 5.5% year-over-year in August. Many markets still have room to rise before reaching 2006 peak levels.

A very successful businessman had a meeting with his new son-in-law. “I love my daughter, and now I welcome you into the family,” said the man. “To show you how much we care for you, I’m making you a 50-50 partner in my business. All you have to do is go to the factory every day and learn the operations.”
The son-in-law interrupted, “I hate factories. I can’t stand the noise.”
“I see…,” replied the father-in-law. “Well, then you’ll work in the office and take charge of some of the operations.”
“I hate office work,” said the son-on-law. “I can’t stand being stuck behind a desk all day.”
“Wait a minute,” said the father-in-law. “I just make you half-owner of a moneymaking organization, but you don’t like factories and won’t work in an office. What am I going to do with you?”
“Easy,” said the young man. “Buy me out.”

Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

Economics 101 and the Housing Market

It’s a basic law of economics: Demand goes up. Supply goes down. Prices rise.

Housing Market Supply Demand Prices in Wisconsin

Nationally, that’s happening right now in the housing market. With normal population increases and an improving economy, demand is growing, and supply is tight in many areas.

Additionally, despite analysts’ predictions, interest rates have held at relatively low levels. Low rates keep home payments more affordable.

What might this mean for you?

  • If you’re in the process of buying or selling, you’re probably in a good spot. Many sellers are seeing higher bids, and many buyers can afford to make them because of currently low rates.
  • If you’re planning to stay in the home you now own, it’s likely your home value is growing. More equity and the possibility of refinancing at today’s rates create a comforting combination that’s tough to beat.

As always, thanks for letting me do my best at keeping you up-to-date on our markets. If you or someone you care about would like assistance with financing or re-financing a home, please let me know HERE. I’ll be glad to help.