We examine the ways in which the economy and the housing market are dependent upon each other in 2012. Also mortgage interest rates hit another low. And as usual, providing personal finance advice, real estate advice and consumer advice on the Ilyce Glink Show January 22, 2012 on WSB Radio.
It seems like I say this every week, but it was legitimately another wild one for the U.S. economy. And though this has already been the case for years, it seems that the fortunes of the economy and the housing market are inextricably tied. The Dow was up almost 300 points for the week (with a jump of nearly 100 points on Friday alone), ending at 12,720. In large degree, this growth was linked to mixed spate of real estate news, including another new low in mortgage interest rates.
Even as the Federal Reserve expressed the possibility of purchasing more mortgage-backed securities, the average interest rate on a 30-year fixed mortgage loan fell to 3.88 percent. How much lower can rates go? Well, perhaps farther as we are beginning to (finally) see some signs of life in the long-struggling housing market:
- Unemployment numbers are dipping, and as they do, there is hope that more people with jobs means more potential home buyers.
- Home building stocks and other equities traded at six-month highs.
Strangely, markets seemed to embrace good news while ignoring the bad altogether. Along with the heartening stats about jobs and interest rates, we also learned that in December, 30-day delinquencies on FHA loans jumped to 18 percent from 17.5 percent in November 2011. This is even after Congress allowed the agency to return to loan limits imposed by Frank-Dodd reform ($729,750 for a single-family home).
What’s next for the economy and the housing market? Tune in next week!
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