flight to safety

North Korea & the Housing Market

Flight to Safety No, I don’t think a nuclear conflagration would be good for the U.S. housing market (or anything else). And, there’s no denying that ongoing North Korea – U.S. saber-rattling may have a chilling effect on nervous home Buyers. But, in the meantime, one of the predictable side effects of major geopolitical uncertainty...
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Brexit’s Effect(s) on the U.S., Twin Cities Housing Market

(Even) Lower Interest Rates vs. Weaker Economy “It’s too soon to tell.” –Chinese leader Mao Tse-tung, when asked — in 1948(!) — about the historical significance of the French Revolution. To accurately assess the potential effect of Brexit on the housing market, one must first identify and analyze the biggest variables. Here’s my take: Positives...
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Shaky Stocks = Lower Interest Rates = Housing Market Kick

Housing Market – Stock Market Linkage Economic observers — and readers of this blog — know the dynamic well. Namely, melting stocks precipitate a flight to safety (bonds), which drives down interest rates . . . helping home sales (at least in the short run). In fact, just such a sequence played out this week,...
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Sinking Stock Market Silver Lining: Cheaper Mortgages

Flight to Safety Drives Down Interest Rates “U.S. Markets Tumble as Fear Spreads” —headline, Wall Street Journal (1/24/14) It’s not great news for people who own stocks, but for prospective home Buyers about to lock on a mortgage, it’s terrific news. Namely, the sudden aversion to stocks and all-things-risky has prompted a stampede into bonds,...
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Ten-Year Treasury: Now 1.659%

“Risk Without Return” Just two weeks after I last noted plunging interest rates (see, “Refinance Redux, or, “Thanks, Greece!”) . . . they’ve dropped even further. This time, the catalyst is Spain (can you spell C-O-N-T-A-G-I-O-N?) While home Buyers may not follow gyrations in world debt markets, if you’re looking for a home — or...
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U.S. Loses Triple-A Rating

S&P Breaks Ranks So, after the U.S. stock market was safely closed yesterday at the end of a tumultuous week, Standard & Poor’s did the deed:  it cut its rating of long-term U.S. debt from Triple-A to Double-A. Its competitors, Moody’s and Fitch, are likely to follow in short order, much like gas stations or...
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