Housing Revival
"Fed purchases of mortgage bonds have helped revive the housing market by pushing down the rate on a 30-year, fixed-rate mortgage last month to a record 3.31 percent.New-home sales rose 17 percent in October compared with the prior year, while existing-home sales increased 11 percent. Home prices gained 3 percent from a year earlier in September, according to the S&P/Case-Shiller 20-city home-price index.
“Pent-up demand, rising home prices, low interest rates and improving customer confidence motivated buyers to return to the housing market,” Douglas Yearley Jr., chief executive officer of Toll Brothers Inc., the largest U.S. luxury-home builder, said in a Dec. 4 earnings call."
And today we can expect a little fuel for the fire....
Fed Seen Pumping Up Assets to $4T in New Buying
The Federal Reserve will amplify
record accommodation tomorrow by announcing $45 billion in
monthly Treasury buying that will push its balance sheet almost
to $4 trillion, according to a Bloomberg survey of economists.
Forty-eight of 49 economists predict the Federal Open
Market Committee will purchase Treasuries to bolster an existing
program to buy $40 billion in mortgage bonds each month. The
panel pledged in October to continue that plan until the labor
market improves “substantially.” “It’s going to be massive and open-ended in size,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York and a former New York Fed economist.
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