However, keep in mind that real estate and economies are local. In fact, yesterdays New York Times and the Wall Street Journal coincidentally both have bullish articles on New York City's economy and housing market
They go on to say that by almost all measures, Manhattan in particular and to a lesser extent the 4 boroughs, have experienced a milder recession, quicker recovery, lower unemployment and a stronger housing market than the rest of the country. No doubt Wall Street's resurgence this year has contributed greatly to NYC's recovery, which also trickles out (to a lesser extent) to the surrounding suburbs. NYC's housing market in particular has held up very well, with Manhattan's median prices for real estate rising 18.5% in the 3rd Quarter!
Another reason NYC may be doing better is because the NY Metro area's average and median home prices and mortgage amounts are higher than the national average, which benefits from lower jumbo mortgage rates. Recently, the National Association of Realtors (NAR) said, "Sales volume for homes worth more than $1mm across the country are up more than 35% from last year at this time." They go on to say "Homes priced between $700,000 and a million are also on the rise by some 29% over last year. There's no question that's because of the historic low jumbo rates."
Wells Fargo and other lenders have recently dropped their jumbo rates as they get more comfortable with jumbo borrowers, who have higher cash reserves and a higher employment rate. Jumbo underwriting guidelines are still conservative, but for the right borrower, jumbo mortgage rates are at record lows. Jumbo refinancings have also increased, as you don't need as big a drop in rates to break even with closing costs, as many of them are fixed, no matter the size of the mortgage.
The mortgage rate most often quoted in newspapers and on the news is a rate released weekly by Freddie Mac for conforming 30 year fixed rate mortgages. But keep in mind, this rate is with .70 points, so a 0 point rate is .125 to .25 higher. Conforming rates continue to drift down as we get multiple weaker economic releases and mild inflation.
The Federal Reserve's announcement that they plan on continued "quantitative" easing by reinvesting maturing mortgage backed securities (MBS) into 2 - 10 year treasury notes also helped push rates down. The bond markets were hoping for the Fed to also announce they would purchase more MBS, but this would increase their balance sheet which would receive its share of criticism.
The Fed will likely wait till after the November elections before they revise downwards their economic forecast. By then, they will have a clearer picture of the housing market and economy and may institute more aggressive measures then. But Chairman Bernanke has told Congress that more fiscal stimulus would be welcome, but don't expect any progress on that front till after the elections.
All eyes will be on this Friday's employment number, with the consensus for non farm payroll to drop 105,000 which typically sets the market's tone for the following 4 weeks.
Have a safe and enjoyable Labor Day Weekend!