Happy Halloween to everyone. Hopefully you won't get too much of sugar rush over the next two days :) I'll be enjoying the sights and sounds of the night trying not to get too scared, especially by the gyrations in the stock market...ahhhhh!
This has been a roller coaster week for the market with real estate statistics being the driving force for one major increase and one major decrease. Yesterday we were up over 200 points because the GDP was up 3.5% in the 3rd quarter and today we're down more than that after the consumer spending numbers came in soft. Why the gyrations? Well, most stock traders are sheep who follow the herd with little regard for what's really happening in the market. However, these gyrations are normal as we transition from a recession back to growth. People need to be confident that the environment is safe to invest - both in stocks and real estate.
Go to this link to read more about today's market moves: http://www.msnbc.msn.com/id/3683270/ns/business-stocks_and_economy/
The good news is that interest rates are exceptionally low and are likely to remain low until foreclosures dry up and inventories return to normal. This chart from MSNBC shows the history of interest rates in recent years. We're near the bottom and I expect it to stay that way for a long time. Why? Cheap money fuels home sales. That was part of why people bought homes before the crisis and it'll be part of why fuels the recovery. As long as the loans are made to suitable borrowers, we'll be fine. At 5.03% the cost to borrow for a mortgage is cheap. Rates adjust rapidly but check out Zillow.com and Bankrate.com to get examples of the latest averages.
Here's the MSNBC story: http://www.msnbc.msn.com/id/7148582/ns/business-real_estate/