Housing and the Fed…

Housing and the Fed…

The Federal Reserve Chair, Janet Yellen, told an audience of grassroots community organizers in Chicago on Monday.  Generally speaking, the monetary policies of the Fed are intended to shore up “Main Street” and not “Wall Street”.  However, in her remarks, she indicated an extended reluctance toward raising the current interest rates.

Through some specific examples, she indicated the need for restraint due to the slowly healing labor markets; she indicated a prolonged “accommodative” policy to ensure labor conditions improve.  This action seems to make sense, in the face of inflation.

Low interest rates, she said, make buying a home more affordable and make it easier for businesses to expand and hire.  

“We are trying to lower the costs of buying a car that can carry a worker to a new job and kids to school, and our policies are also spurring the revival of the auto industry. We are trying to help families afford things they need so that greater spending can drive job creation and even more spending, thereby strengthening the recovery,” Yellen said.

So, back to the housing. 

How are the Fed actions going to affect you? 

Yellen suggested that the unemployment rate needs to be lowered to 5.2% - 5.6% before interest rates should be raised and inflations may be set in.  With unemployment currently around 6.7%, we should be able to safely “assume” that the low interest rates will not be moving significantly for any time soon.

Yellen suggested the primary issues holding back the job market are ‘cyclical,’ in other words there are simply not enough jobs to employ all those who are looking for work.  Accommodative monetary policy – low interest rates, for example – can help create conditions conducive to creating jobs, Yellen explained.

Are you considering selling your home?  Buying a home?  Are you being transferred in your job or have you found a new job?  With the current housing market lean on sellers in our area, you may want to consider selling.  There seems to be more “lookers” that there are “sellers”. 

I must qualify the above just a little.  My recent experience has been that the “lookers” are being “very specific” about meeting their needs and desires, and they are not willing to rush into a decision.  This attribute provides us the opportunity to engage our customers and do a far better job of meeting their needs and desires.

Call me and let’s get started,

Terry Reeves

231-250-2101

*Yellen’s remarks come as part of a speech on strengthening communities at the National Interagency Community Reinvestment Conference in Chicago.

 

Terry Reeves

Terry Reeves

Real Estate Professional
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