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Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – Waiting for Certainty

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Rates, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgages- Waiting For Certainty – Commentary ~ October 4, 2013

Last week’s indicators seemed to push us forward toward a bit more optimism about the economy and, particularly, the real estate market. If anything, this week’s data add to the uncertainties.

For one thing, there was little movement among commodity prices and interest rates, giving us little to base any opinions about the economy on. For another, the small movements were generally heading down, giving us nothing to base optimistic forecasts on. Gold edged down slightly; the price of crude oil did as well; and currency exchange rates changed very little, moving in various unrelated directions. And the 28-basis-point decline in Freddie Mac’s mortgage rate over the past two weeks was probably simply a further response to the Fed’s September statement that it would continue buying mortgage bonds.

We’re talking here about a market that is not receiving signals regarding where it may go in the future. One likely result: The signals it does receive—often word-of-mouth among buyers and sellers and professionals—can easily become distorted as, with the best of intentions, we seek to understand what the market is doing and what we, therefore, should be doing to protect ourselves from potential problems or take advantage of possible opportunities.

At the moment, many observers are focused on the fact that the numbers of sales and the prices of homes aren’t rising as rapidly as they were in the recent past (in many areas). But people see “slowing” and assume the market is about to fade away, not that its cost and sales volume advances aren’t as rapid and strong as they were. The difference is important.

Further, the differences between the sales volume and price appreciation in one area and another can be remarkable—especially when the market is going through changes and losing its sense of continuity. And that is precisely what seems to be happening right now.

In this environment, the significance of every bit of bad news tends to be exaggerated. August’s Pending Home Sales Index fell by 1.6%, for example—after a string of significant monthly rises— suggesting (tentatively) a lower number of existing home sales in the next couple of months (if not beyond). But nothing is certain.

And we have no choice but to worry about the debt standoff in Washington, DC, which is effectively putting nearly everything in the economy on hold. We don’t even have the construction data we normally have about this time each month (see below to the right).

It’s a time to tread lightly on the muddy sands and to wait for more certainties about the future to become fairly apparent.

Category: Mortgage Blogs