The Fed’s recent decision is going to have a big impact on our economy and real estate market. Here is everything you need to know.
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The Fed just announced a move that will have a big impact on sellers and buyers.
At the recent meeting on September 20th, the Fed decided to cut back their balance sheet. While this might sound boring compared to the usual news of Fed rate hikes, it’s actually a big deal.
The financial crisis we saw a decade ago caused the Fed to take emergency measures. So, they injected a huge amount of money into the economy by buying up various financial assets in an enormous sum.
These financial assets amounted to a sum of about 25% of the United States economy at that time. But now, the economy has recovered to the point where the Fed feels comfortable taking some of this money back.
As you can imagine, this is going to have a huge impact on our economy and real estate market. This change is going to put upward pressure on consumer borrowing costs such as mortgage rates.
This change is going to put upward pressure on consumer borrowing costs such as mortgage rates.
Also, sellers must be aware that this change could result in fewer interested buyers. This might lead to a decrease in prices, making it harder to sell.
However, this is not an immediate change. The rollback will be gradual, with the Fed taking back just $10 billion per month. Compared to the $4.5 trillion total that was borrowed originally, this is not a significant amount.
While the Fed’s move will not take effect immediately, you should act quickly if you have been thinking of buying or selling. Now is the time to make your move before the process of this change starts to escalate.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
