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We're also watching the
housing sector closely, where
the rise in mortgage rates has
had a big impact last year on
affordability. You've now
had a substantial decline
in mortgage rates, and
we're hopeful that will help
continue to spur a recovery in
the housing market during
this spring and into the
summer, given how weak it
was over the winter.
global policy perspective is, along with the
trade issue, a down-side risks for the outlook.
HOW WILL THE GLOBAL ECONOMY IMPACT THE
U.S. HOUSING MARKET? If you contrast with
where we were in the beginning of 2018,
when we had pretty coordinated increases
in growth across the globe, to where we are
now, we have seen a substantial slowdown
in economic activity around the world. You
even had a negative quarter in Germany, you
saw softness in Italy, and you had Brexit,
which continues to hang over the European
outlook.
Last year, we were talking about, "Wow,
when would other central banks follow the
Fed and start tightening policy, or at least
stop expanding their balance sheets?" By this
spring, it has become a different world, and
the European Central Bank has moved away
from any tightening and is now loosening.
You still have negative rates across many
markets, and in the short term, a number
of central banks are finding that that's not
stimulating growth in Japan or in Europe
the way they'd hoped for. e U.S. has been,
by far, the bright star in the global economy.
How does that play back into the U.S.
housing market? Part of the reason we've
had the decline in mortgage rates since
October is the global slowdown meant that
the yield on 10-year government bond rates
around the world have come down. e U.S.
remains the highest yielding of all the major
bond markets. So, as rates decline around
the world, the U.S. bond market becomes
very attractive and rates follow the rest of
the world down.
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