What will happen to post election interest rates? So far, we have seen very little change in mortgage rates. There’s been little to no progress made regarding the U.S. fiscal cliff or the debt troubles in Europe. Since it’s extremely difficult to estimate the impact of Hurricane Sandy, investors did not give much weight to the U.S. economic data released this week. So it’s not surprising that investors continue to operate with a high degree of uncertainty. Many hoped that after the election political leaders would provide clear signs that a compromise could be reached to resolve the upcoming fiscal cliff. If no action is taken, a series of spending cuts and tax increases will occur at the end of this year. This will likely bring a slowdown to the U.S. economic growth and could slow down our housing industry. The situation in Europe is a source of frustration for investors. It’s clear from the economic data that growth in the region is slowing, even in the stronger countries like Germany. There is uncertainty about what actions will be taken to address the debt troubles ahead. European officials remain divided about releasing additional aid to Greece. Spanish leaders have not decided whether they will ask for assistance from the European Union (EU) bailout programs. In short, while economic conditions continue to get worse, there has been little progress in the conflict between the troubled countries which need help and the stronger countries which will have to pay the bill.
The week of Thanksgiving will be slow and quiet, but the week after should start shining some light on what is to come.
