Friday, March 14, 2014

Texas Real Estate & Mortgage Rate Update

Yesterday the US stock market took a huge hit, this morning the selling continues in all global markets but in very early activity prior to the open at 9:30 the key US indexes were unchanged. Markets very concerned about this weekend’s vote in Crimea on a referendum to secede from the Ukraine and join Russia. Russian troops still on the border. China’s economic slowing is also roiling global markets; the combination of the two concerns sent interest rates lower yesterday on safety moves and hedging against possible continued selling of stocks. 

The double barrel uncertainty (China and Russia) has stepped up market volatility this week and will likely continue next week into the FOMC meeting conclusion on Wednesday.  Secretary of State Kerry told a Senate panel in Washington yesterday that the U.S. and Europe will take “very serious” steps the day after the Crimea vote “if there is no sign” of a resolution to the crisis. Russian President Vladimir Putin is preparing to “invade eastern Ukraine,” Estonian Defense Minister Urmas Reinsalu said by e-mail today. Likely neither of the two scenarios will occur rapidly, if at all. Kerry will meet with his Russian counterpart today, hoping to ease the situation in Crimea as the clock ticks down to a referendum

The 10 yr note yield declined to 2.58% on Feb 3rd when the January employment report was released; this morning the 10 at 2.64%. From a pure technical perspective 2.58% will render strong resistance. From a fundamental perspective, if the situation with Russia leads to an economic slowing and China’s economy continues to show weakness the rate markets could decline a lot further. Looking to next week, the FOMC meeting on Tuesday and Wednesday with the Fed widely expected to taper another $10B taking the total tapering to -$30B from $85B a month. 

Still no concern that rates will increase in the short term. I suggest that you continue to  float your rate unless you are closing in the next week. Continue to follow my BLOG for all related updates concerning Houston, Spring, San Antonio, Dallas, and Austin including all other cities in Texas.

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