The market turmoil that took place Monday could influence Americans to invest more in real estate, according to one mortgage professional
; but is that just wishful thinking?
“I don’t think the stock market will have a huge effect on our business,” Michael Baralt, an originator with Hamilton Group, told Mortgage Professional America. “With stocks on the decline, that may be the impetus for people to get into the real estate market, especially with rates as low as they are.”
International markets experienced some turbulence Monday, with China’s Shanghai Composite index falling 8.5% -- and another 7.6% Tuesday -- and sending shockwaves through markets here in the United States.
Standard & Poor’s index was down 3.9% at close Monday, and the Dow Jones fell 588 points to an 18-month low. On Tuesday, it recouped some of those losses.
And while American markets have since rebounded slightly, more turmoil could be in the cards. Which, according to Baralt, could result in more money being parked in the real estate market.
But will that be the case? It remains to be seen. The market could see some declines in housing prices, according to a number of pundits, which could force potential buyers to re-think those purchases.
However, a growing number of economists are forecasting the Fed will hold off on raising its benchmark rate until after next month’s meeting, meaning originators could continue to cash in on clients looking to take advantage of record-low rates.
Most recently, the New York Times reported the market priced in a 24% chance of a rate increase next month, which is down from 48% the week prior.
The stock market may be taking a hit but originators are set to benefit, according to one industry player.