How Sandy's Aftermath Can Help Homebuyers
Much of his reasoning for lower rates in the wake of Sandy is the Federal Reserve and its ongoing bond market stimulus program. Habib says any inclination to pull back on economic stimulus will go by the wayside now that Sandy has hit the U.S. east coast.
"Part of the reason why bond prices are improving due to this news points to two things: We already know the Fed are buying mortgage bonds, which is helping
For the housing market, that could mean good and bad news, Habib says, depending if you're a buyer or a seller.
"If I am a homebuyer or someone looking to refinance, this probably is good news for the longer term for interest rates to remain low; it also may create - based on the psychological effects of this terrible storm - a temporary drag on housing, which means this is a time period where people could get additional value," Habib says.Should homebuyers dive in now and take advantage of the unfortunate aftermath of Sandy? Habib thinks so. Rates can't go much lower, and the Federal Reserve won't have a heavy boot on the stimulus gas pedal forever, he says. For homebuyers, and for credit-needy consumers in general, Sandy may be a unique opportunity to save on a loan. That's hardly comforting to the millions of Americans who suffered from the storm, but that's how economics work. In other words, one consumer's storm is another consumer's opportunity.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV