Consider these Federal Policy moves:
1. This week, the Federal Reserve lowered interest rates to their lowest level since June of 2005
2. The Federal Reserve unveils a plan last week to buy up $500 billion of mortgage securities backed by government sponsored entities like Fannie Mae and Freddie Mac. This has to put a little supporting comfort behind our lenders.
And what is the impact on the Real Estate market?
Mortgage applications surged by the greatest amount since records have been kept.
There is no coincidence here folks. People are beginning to dip their toes back into the housing pool. Will it happen overnight? Of course not. Especially since borrowers need more than just an ‘inclination” to buy a house; they need a credit score above 650 and a job, 2 things that policy changes won’t fix. Well maybe new Fed policy can stimulate job growth, but the lag between policy introduction and its market impact can be years.
So what is the moral of this confusing tale? It is that there are glimmers of hope. The Fed seems to be doing what they can; lenders are loosening; and selected credit worthy and employed folks are assessing their buy point.
What more do we need?
We need the economy to recover; unemployment to stabilize in the 6% range; and excess housing inventory to dry up.
When will this happen? 2009. What do you think?
Want to find out if you have what it takes to be a Real Estate Agent or Broker?