Housing market to be focus for stock market this week
May 18, 2008
The stock market has enjoyed a nice rally over the past month despite rapid rising oil prices. The national association of Realtors will report existing home sales for the month of April on Friday of this week. The market has written off the idea that the real estate market will recover significantly in 2008 and most economists, home builders and mortgage companies are now stating that they think it will be well into 2009 before the market begins a true correction.
The significance of Friday’s report is mostly about the psyche of the American home buyer, if the report shows a glimmer of home this may help to provide some long awaited positive pr for the real estate market. The number of potential home buyers sitting on the sidelines anticipating further price drops may decide that the market does not have much further to fall and begin the process of looking for a home. Mortgage rates remain very attractive and recent changes with both Fannie Mae and FHA are allowing home buyers to get into homes with as little as 3% down payment.
The market could use a lift, if the home sales figures are better that anticipated the stock market could rally and the only downside is this may pressure a rise with mortgage rates which remain firmly near six percent.