A hush came over the crowd of assembled policy makers and media representatives September 18th as Fed Chairman Ben Bernake took the stage to announce, as reported for months prior, the tapering of the purchase of Treasury Bonds. A program the department has used as a way of nursing the economy back to health.
Only he didn't.
Instead, the rumored $5-$40 billion monthly reduction in bond buying has been pushed back at least until the committee reconvenes in December.What does this mean for the real estate market? In the shadow of the announcement of the Fed's plans to taper buying, mortgage interest rates rose to a two-year high and refinances dropped 70% from the previous year. But in the wake of the hold-off, rates have dipped sharply to a 9-week low as of September 30th.
Those looking to buy can expect a reprieve from their anxiety over rates as they should remain competitive for the time being. This however, is positive news for sellers alike, with buyers no longer fearing getting priced out of this year's historically hot market, home values should keep from slipping as a result of depleted buying power.
While uncertainty remains as to the whens and ifs of the still-expected taper, for now homeowners and buyers alike will enjoy the atmospheric attributes that made this summer such a historic one in real estate. With the combination of comparatively low interest rates and equally low inventory, the metaphorical perfect storm is likely to continue into the coming year. But for homeowners looking for value appreciation over the next half-decade, only time will tell.
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