Financial Markets
The Dow Jones ended all five trading sessions up, and for the week the Dow ended up over 500 points, closing at 11,509. US stocks appear to be the lesser of two evils as European debt issues continue to take center stage. At the moment, US stocks appear to be the safer play with more upside than foreign markets, in the eyes of investors.
Mortgage rates lost nearly 100 bps for the week, and rates have begun to trend upward. Inflation numbers released on Thursday came in hotter than expected. As a reminder, a fixed rate of return investment, such as a mortgage-backed security, is not a prudent investment in the face of inflation. Investors sell their position, which drives the yield (rate of return) up, which is essentially our client’s mortgage rate. Mortgage rates will continue to climb as concerns of inflation continue to materialize, which is why I will continue to recommend locking in the interest rate early on in the transaction.
Southern Nevada Real Estate and Economy
The Brookings Institute released its 2nd quarter Metro Monitor Economic Report this past week, and Las Vegas ranked among the highest metro areas for improvements in unemployment as well as Gross Metropolitan Product (like GDP but for the city) from 2nd quarter of 2010 to 2nd quarter of 2011. Las Vegas improved its “MPD” by 1.1% and improved its unemployment rate by 1.5%...For anyone that played sports, “Most Improved” isn’t always the most admired award to win because it means you stunk at one point, but it is certainly another step in the right direction.
Also, the report points out a glaring coincidence that markets with the most anemic economic conditions also have the hardest hit real estate markets.
