Market Correction Would Give Buying Opportunity

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Peoples Home Equity comments on this weeks GDP growth rate report from the U.S. Bureau of Economic Analysis.

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any future weakness observed in the market should be viewed a a buying opportunity for prospective home buyers.

This week was a bit demoralizing in terms of economic news. As reported by the U.S. Bureau of Economic Analysis on June 25, first quarter GDP was recorded as much worse than expected. However, Peoples Home Equity believes that any future weakness observed in the market should be viewed a a buying opportunity for prospective home buyers.

Perhaps the biggest economic news report of the week was that first quarter GDP growth was revised to a dismal -2.9% from an initial worrisome figure of -1%. This was the first time GDP growth declined since the first half of 2011. Meanwhile the markets are seeing very low levels of volatility which has some individuals thinking a market correction is coming soon.

Peoples Home Equity reminds readers that another consecutive quarter of negative GDP would signify that the economy is in a recession. Mind you, if this were to happen it would probably be much milder than the disaster seen in 2008. Yes, volatility is very low and markets are probably set to correct but as the saying goes, “the trend is your friend” and that goes until the trend changes. Right now, the trend in both stocks and home prices is up. If equity prices decline they would probably affect luxury home prices more than median and lower priced homes which are good for first time home buyers. First time home buyers tend to purchase affordable, low priced homes given that they do not have a large savings. Peoples Home Equity believes that a market correction in stocks would not act as a heavy burden on housing. For decades housing was a safer investment for Americans, that changed when loan standards declined tremendously allowing individuals with less than questionable credit afford a mortgage. The market has learned from its mistakes of the housing bust and loan standards remain tight. The housing may well carry through the next stock market correction just as well as it carried itself through the dot com crash. After many investors lost money in tech stocks during the dot com bubble real estate became very attractive given that the market saw a very small decline relative to the stock market. For this reason, Peoples Home Equity emphasizes the opportunity to purchase a home during if a market correction occurs helping because home prices to fall a bit. Prospective home buyers are already catching a break from slowing home price growth and falling mortgage rates, if a home prices actually decline individuals should be prepared to make a purchase. To be prepared for a home loan means applying before making a bid on a real estate listing.    Peoples Home Equity can get individuals pre-approved for a home loan quickly, just visit their website and fill out their “Home Loan Quick Qualifier.” Or, contact a Peoples Home Equity loan officer today at: 262-563-4026

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Giorgio U Ferrero
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