September may prove to be a pivotal moment in aiding the recovery of the U.S. economy and, in turn, the housing industry. Earlier this month, the Federal Reserve announced it would begin taking serious action to stimulate economic growth, raise employment levels, and keep interest rates down.
Dubbed quantitative easing, the Fed has pledged to purchase $85 billion in new assets (including $40 billion worth of mortgage-backed securities) every month until the end of the year. In a change of pace from the previous two rounds of ‘QE’, the Fed’s economic plan this time is open-ended – after assessing its impact at the end of the year, the Fed commented that it is likely to continue its policy.
Zachary Goldfarb noted the significance of the Fed’s move, writing in the Washington Post, “For the first time, [the Federal Reserve] made a definitive promise that it would keep interest rates ultra-low even if the economy starts to recover. That sent a clear signal that for years it will be cheap for consumers to borrow to buy homes and cars or for businesses to get loans to expand.”
Following the announcement, Michael Gapen, an economist at Barclays Capital, told the USA TODAY he expects the plan to bring down mortgage rates by as much as half a percentage point over the coming year.
While it’s still too early to tell what impact the Fed’s new commitment will have in the long term, September has offered a number of positive signs for the future. 30-year fixed mortgage rates plunged to a record low of 3.49% last week, likely a result of the Fed’s decision, according to Wells Fargo senior economist Mark Vitner. The Conference Board reports that consumer confidence has leapt to a 7-month high while both S&P/Case–Shiller and the National Association of Realtors have cited an increase in home sales and prices over the summer. Amidst this optimistic news, some banks have begun offering enticing incentives to attract potential homeowners.
The combination of these factors makes this a potentially opportune moment for anyone thinking of purchasing real estate. That’s why Traditions Realty is here. From personal homeownership to commercial investment, our experienced agents are ready to help guide you through the market and find the piece of property that’s right for you. Call us at (904) 683-5230 to chat with one of our specialists and get started today.