China’s Housing Market Continues To Soar
Many felt that the recent uptick in sales was due to rising interest rates, and buyers rushing into the market before rates increase anymore. After yesterday’s rally following the “No go here now Taper” announcement from the Federal Reserve, a decent jobless claims number, and a strong existing homes sales report, weren’t enough to move all of the major indexes higher today. The Dow Jones Industrial Average (DJINDICES: ^DJI ) closed the day down 40 points, or 0.26%, and now sits at 15,636 after setting a new record high yesterday, at 15,676. The S&P 500 lost 0.18%, as the Nasdaq bucked the trend, rising 0.15%. The cause for the move was an upgrade by FBR Capital,from the previous market perform, to an outperform rating. Additionally, the firm’s price target now sits at $94, which represents an 8.1% increase from today’s closing price.
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Here in the U.S., the term bubble conjures up memories of complicated mortgage backed securities trading and foreclosures. Thats not happening in China. But runaway housing prices are happening.
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The Effect Of Fed Tapering On The Economy The Housing Market And Stocks
In short, it will require a thorough PR campaign, but with much higher stakes. Tapering And Higher Interest Rates Most believe that tapering will result in an increase in interest rates, especially at the longer end of the yield curve. This could have two detrimental effects. The first would be higher mortgage rates.
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