FED MOVES BRINGS LOWER RATES 4.5%

My prediction of a bond rally did materialize although it was larger than I anticipated. The fed's announcement of his intentions created one of the largest one day bond moves ever seen. Basically, the fed announced that he will print money out of thin air and use those funds to buy an enormous supply of longdated treasury bonds, as well as mortgage backed securities. Buying 30 year treasuries supports bond prices and gives us low mortgage rates. Buying MBS will hopefully provide liquidity in the funding of mortgage loans.

What these actions mean for the real estate: lower rates will support the refinance market going forward. The stock market continues to look for that elusive bottom. I anticipate improvement in the stock market by late Spring, early summer which along with lower rates and availability of mortgage funding should provide a boost to the real estate purchase market. I think that agents can begin active marketing within the new few weeks to homebuyers, and should definitely encourage sellers to use this window of opportunity to price their homes to sell. Barring any unforeseen new announcements related to the economy, the summer could provide a welcome relief and more optimistic tone for real estate activity.