Last Updated:
May 28, 2010
South Carolina Real Estate
Forecast for the Week
The Goldman Sachs story will continue to unfold...and it will be very interesting to follow, as well as monitor the market reactions as more details and information become made known.
More housing news follows this week, with Thursday's Existing Home Sales Report followed by New Home Sales on Friday...and hopefully both of these reports will bring positive news on the real estate market. Less than two weeks remain for homebuyers to get in on the Tax Credit - purchase contracts need to be signed by April 30th to qualify!
There will also be more inflation news this week with Thursday's Producer Price Index (PPI), which measures inflation at the wholesale level. Last week it was reported that the Consumer Price Index for March met expectations, and while the report might give the Fed more ammunition to jawbone about inflation being low; there are many reasons to question whether inflation is really as low as being reported. The Feds will try to continue to make this case - as it helps keep borrowing costs for the US low, in the face of pumping out massive amounts of new debt.
Also on Thursday, we'll have another Initial Jobless Claims Report, and these days it's important to review every report about the labor market. Rounding out the week is Friday's Durable Goods Report, which gives us an update on consumer and business buying behavior on big ticket items that last for an extended period of time.
Along with the Goldman Sachs story potentially continuing to shake up Stocks, remember this rule of thumb: weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
As you can see in the chart below, it's been a volatile few weeks for Bonds and home loan rates since the Fed buying support ended. While Bonds and home loan rates ended last week on an improving note...with earnings season continuing, the Goldman Sachs drama ensuing, and a full slate of economic reports ahead...the volatility is likely to continue! If you have any questions about what all this means for your situation, don't hesitate to give me a call or email.