Even talk of the possibility of tapering the bond buying program has affected interest rates this year.
Waltham, MA (PRWEB) September 19, 2013
The Federal Reserve released a statement* Wednesday at 2:00 PM that it will not taper quantitative easing, the $85 billion-a-month mortgage bond purchasing program designed to keep interest rates low to encourage people to borrow and invest. The Fed said it needed to see more improvement in the economy before it would pull back on the program. While the unemployment rate has shown improvement, the economy hasn’t produced as many jobs as expected.
McGeough Lamacchia Realty, a full service real estate company serving Massachusetts and Southern New Hampshire, says the decision will be good for the housing market. John McGeough and Anthony Lamacchia, co-brokers and owners of McGeough Lamacchia Realty, appeared on the Fox 25 Morning News to discuss the impact of the decision.
McGeough Lamacchia says the decision came as a surprise to many economists. “There was talk that the taper would start slowly,” says Anthony Lamacchia, “at about $10 billion less a month.”
“Even talk of the possibility of tapering the bond buying program has affected interest rates this year,” says John McGeough. “In June, mortgage rates surged higher in response to a press conference where Federal Reserve Chairman Ben Bernanke said that if the economy continued to improve the Fed could slow quantitative easing later in the year.”
McGeough Lamacchia says there has been much speculation as to how tapering would affect mortgage rates. Low interest rates have been a big part of the housing recovery, making home ownership affordable and encouraging more people to buy a home. After the announcement, mortgage rates dropped lower to 4.5 percent for a 30 year fixed.
“This is good news for people looking to take advantage of low rates to buy a home,” says John McGeough.
McGeough Lamacchia says there was other good news for housing this week. Housing starts** for single-family homes for August were up 7 percent over July. Building permits were up at a seasonally adjusted annual rate of 918,000, 11 percent above the August 2012 estimate of 827,000.
“Now that the Fed says it will not taper quantitative easing, we believe interest rates will likely remain in the 4 percent range, and will likely go slightly lower before the year ends, since historically they reach their lowest levels of the year during the months of November or December,” says Anthony Lamacchia.
To learn more visit the New England Real Estate Blog.
About McGeough Lamacchia
John McGeough and Anthony Lamacchia are the number one Real Estate Agents in Massachusetts and named one of the Top 100 Real Estate Teams by the Wall Street Journal. They are a full service real estate agency serving home buyers and sellers Massachusetts and New Hampshire.
*Federal Reserve Statement: 9/18/2013: federalreserve.gov/newsevents/press/monetary/20130918a.htm
**U.S. Census Bureau Press Release: 9/18/2013: