All summer long, the FED has hinted at pulling back, or “tapering” its asset purchases known as quantitative easing. This has been the single biggest factor pushing rates up. Markets and analysts alike, expected the FED would today announce it’s inevitable move to scale back this easy money policy. However, they didnt do it, citing low inflation and on-going weakness in the economic recovery.
This is a shot in the arm for the real estate markets, which have seen a measured slow down in buying activity in recent months. While the housing market is still going strong, rates in the 4.5%-5% range certainly takes a bite out of peoples ability to qualify and pay for a mortgage.
Bottom Line:“Rates will be moving back down quickly. How much lower? Hard to say, but it could be a substantial move, creating an opportunity for those interested in refinancing or purchasing a home over the next 6 months.”