Looking back, the housing industry is totally Scrooged

Looking back, the housing industry is totally Scrooged

Here's the HousingWire/Star Wars Christmas 2014 special

FHA loans could face "tidal wave of defaults"

All indices hit series high

Another mortgage lender launches 3% down loan

Falls in line with FHFA
W S

REwired

new REwired blog header
Opinion, commentary and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.
Investments

So Vladimir Putin is good for America's mortgage market…?

Mortgage rates stay down amid political strife

April 7, 2014
/ Print / Reprints /
| Share More
/ Text Size+

Russian President Vladimir Putin may be good for the housing market…?

At least that is what one article in the Santa Fe New Mexican asserts.

[Russian] Bear with us here.

While Putin is not exactly smiled upon in this corner of the world, causing economic and banking uncertainty, the articles says that his political aggression creates uncertainty in the U.S. stock market, which in turn helps keep mortgage rates from rising.   

The article states:

When investors become fearful of the movement in the stock market, their first mode of action is to sell, sell, sell. Often stocks are sold off in favor of investing in U. S. Treasuries. Treasuries are considered a safe haven for investment dollars. With the recent Putin shakeup, you can be sure many U.S., European, and Asian investors will invest in Treasuries as well.

Experts are predicting that the political climate surrounding Russia will not change anytime soon. If so, interest rates should remain favorable for some time. The 30-year Fannie Mae fixed-rate mortgage is currently at 4.5 percent, an excellent rate historically. Based on my research, I expect that this rate to continue in the near future. Therefore, expect mortgage rates to be in part determined by Putin’s actions. Use this time to your advantage.

However, Lindsey Piegza, Sterne Agee chief economist explained that many economists upgraded their forecast for 2014 since they banked on strong international demand.

But with everything going on in Europe this is not proving to be true.

“A lot of the political strife is turning into economic strife,” Piegza said. “We don’t rely on Russia a lot, but Europe does. So if Europe slows down further it will have a negative impact on us.”

While it won’t slowdown the recovery, it won’t be one positive factor.

But whethet it truly translates into a positive for housing could be a stretch. 

Comments powered by Disqus