Mortgage Blog

Mortgage Rates Lower on Turkey Turmoil

The Turkish real estate market has been getting tougher over the past few weeks. Recently, there have been increased concerns about the mortgage rates that have constantly been falling. The poor economic conditions in Turkey are being attributed to a wide range of factors including the U.S Fed rate hikes, Turkish government policy decisions, and other global factors. One of the key pointers of a deteriorating Turkish economy has been the steady decline of the country’s currency which has already lost more than half of its value in the past five years.

A high inflation rate has been another consequence of the ailing economy. In a bid to preserve their wealth, many citizens have taken extreme measures such as purchasing gold and other precious metals. The situation in Turkey could only get worse as the Trump administration considers hiking tariffs on all goods from Turkey in what is viewed as a response to the detention of an American pastor in the country.

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A Problem with Many Emerging Markets

Although a significant number of investors believe that these problems are specific to Turkey, others warn that similar economic storms will be witnessed in many emerging market countries in the future. Therefore, investors are advised to move away from investing in the riskier assets such as the Stock market to the relatively safer options such as bonds. It is also a good idea to invest your money in the U.S mortgage-backed securities, MBS.

Retail Sales Report

The retail sales report that was released last week indicated that the retail sales in July rose by 0.6% from June which was a double the projected increase. However, the June retail sales report wasn't good, and the results were revised lower. So far, the major problem that has been holding back home sales has been a lack of inventory. The latest data on new home construction is also not encouraging. Although the July housing starts increased by one percent from the dismal figures recorded in June, things aren’t looking good at all. The dismal data recorded in June were the lowest in two years.

The 10-year high was recorded in November last year, even though the single-house homebuilding has already lost momentum. Construction companies say that the major contributing factor to this sharp decline is the continued shortage of skilled labor and the rising cost of construction materials. However, the building permits applied in July matched the expected level offering some optimism to real estate investors.

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The Fed meeting that was held on August 1 offers useful insights into the heated debate between the Fed officials about the expected future monetary policy. The policy has a greater potential to move the real estate markets and offer a lifeline to numerous investors. For now, all we can is to wait and see how things will turn out.

Call Core Mortgage Financial today about your mortgage interest rates in Naples, Florida. In fact we lend in the whole state of Florida.

 

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