Tuesday, January 27, 2015

Chicago's Mortgage Choice - January 27, 2015 Real Estate Report - The Best of ALL Worlds?

For the past few months we have been alluding to a scenario in which our economy could be experiencing the best of both worlds. For years we have been wading through a very slow and tedious recovery from the deep recession. We knew at some point we would reach a tipping point which is called the "virtuous cycle." It now appears that we may be at the beginning of this virtuous cycle and the first measure of economic growth for the fourth quarter last year -- which is released on Friday -- will be a good indicator of whether we are closer to this cycle, since it follows a very strong reading for the third quarter of last year. The weak retail sales report for December gives us some concern about this economic release since this report covers the holiday season. Despite this, we are expecting the economy to eventually shine. What we were not expecting was the potential for lower interest rates and dramatically lower oil prices at the same time. Theoretically, when the economy gets stronger, rates and oil prices should rise. As we have mentioned, international factors have contributed to a changing of the paradigm from our Nation's perspective. And we must say, the American consumer deserves some better than expected times after several years of recession and a tediously slow recovery. So, the next question is, how long would these good times last? We can't predict how strong the economy will get and for how long. But the more the economy heats up, the more likely that rates and oil prices will rebound. For now, it is a good time to take advantage of this situation, whether you are thinking about purchasing or refinancing real estate or purchasing a car. If you do, we have a feeling that you will not be alone. Keith Stewart 773-529-7000

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