The FEDS Update on the Real Estate Industry

Blogging From The Desk of Alicia Lagarde-Craig

The Fed Meeting was in line with market expectations with no real surprises yesterday.

Highlights:

-Key interest rates will remain at current levels with no indication of immediate increases

-The Fed deemphasized the deflation fears

-The Fed states that the pace of economic contraction is slowing.

-The Fed continues its commitment to purchase Mortgage Back Securities from Fannie and Freddie, ensuring liquidity and rate pressure reductions.


What does this translate to us for the Real Estate and Mortgage Industry?


The below 5% mortgage rates on 30 year fixed mortgages are probably gone for good....no use waiting around for that to happen.

The market will remain a buyer's market with affordability at all time highs and a flood of foreclosure properties available

Expect rates to increase toward year end as the Fed is forced to deal with inflation risks as economy continues to improve

The home buyer's season should be robust; affordability, rates, tax credits, should make the season a good one


While no one can predict the absolute bottom of the market, we are at or near a bottom.

If you are waiting for additional discounts on sales price, you may lose out even if they get lower prices due to rising rates and the end of tax incentives.

Knowledge is power.

~Alicia