Good morning! With Thanksgiving and the December / January holiday season on the horizon, remember to take a few moments for yourself every once in awhile. Lucky for all of us, the Central Coast provides any number of beautiful places to contemplate our relative (in)sanity. Here are a few, courtesy of Holly Dickson:
[Holly is a Cal Poly journalism major and Central Coast Lending intern. She writes about local technology for our SLO Locals blog. Check her stuff out: she has written about SLO County’s contribution to the Mars Rover and Cal Poly’s own “Silicone Valley.” ]
One more note before we get to the weekly column. Veterans and their families are given extremely unbeatable terms on the VA home loan. Read here for more information, and give us a call with any questions at 805.543.LOAN. Now to the column:
The U.S. government has been a punching bag lately, and in some cases it really seems to deserve the abuse. Rick Judson, Chairman of the National Association of Homebuilders, put it best when he noted that the housing market recovery and construction activity has been slowed by government-induced uncertainty.
Home builders have a positive outlook for the housing market, but only just. The score of 54 on the monthly National Association of Homebuilders (NAHB) survey was unchanged from the previous month. A reading of 50 is the dividing line between a “positive” and “negative” outlook.
Judson said, “Consumers continue to show interest in purchasing new homes, but are holding back because Congress keeps pushing critical decisions on budget, tax and government spending issues down the road.”
Judson refers to the U.S. debt ceiling, the U.S. budget, and U.S. budget cuts, the drama of which has played out prominently on the national stage over the past several years.
Most recently, clashes over the borrowing limit and the implementation of a new budget were resolved with extensions into the new year. When Congress couldn’t agree on a plan, it once again kicked the can down the road.
Is this uncertainty slowing economic growth? The dips in the market over the past few years – European debt, the fiscal cliff, the U.S. borrowing limit – each forced investors to contemplate the future. As stocks zigzag in the lead-up to various government deadlines, mortgage rates, employment markets, and more are also effected. Still, the Dow Jones Industrial Average and the S&P 500 have pushed to record highs, even as U.S. economic growth remains mostly middling.
Another example of “instability” that typically gets brought up involves the Federal Reserve’s stimulus program quantitative easing (QE).
The Federal Reserve’s quantitative easing program helped fuel the recent buyers market, pushing mortgage rates to record low levels in late-2012 and early-2013. QE, however, won’t last forever. The FOMC (Federal Open Market Committee) used the stimulus program to support (and jumpstart) the slow U.S. economic recovery and support the housing market.
Though it hasn’t given as many specifics as the markets may want, Bernanke has been very clear about slowing the program with employment expansion and U.S. economic growth. This seems almost favorable to the government’s open-ended struggles to resolve anything of consequence. Now, investors expect QE to end sometime in early-2014. This will increase mortgage rates, but at least we are able to plan ahead. Now remains a good time to buy a home.
On a more local level, the issue that matters most to families is more likely to be something like job security. On this count, SLO County is one of the better places to live in the state of California. In August, SLO County’s unemployment rate was just 6.4 percent, which as tied for seventh best among CA’s 58 counties. The county also bests national and state-wide rates.
A home purchase is one of the more serious bets that a person can make on stability, representing some measure of security in income, family, and future. As the economic recovery continues to unfold, it can be helpful to have your questions answered in an honest, straightforward manner. Give us a call at 805.543.LOAN for a free consultation about your finances and the possibility of homeownership. We are happy to help.