The Fed just announced a monthly increase in Mortgage Backed purchases

By
Real Estate Broker/Owner with Blackburn Coastal Realty

The Fed had already pledged to go into the marketplace and purchase $40 Billion in mortgage backed securities.Today that has been increased to $85 Billion per month (over $1 Trillion per year). Furthermore, it was announced that number would basically go up to unlimited until the unemployment rate declines befow 6.5%....quite a drop.

Currently the "inflationary expectations" are extremely low.  Not the actual inflation rate but what the public thinks that it will be.  The Fed said that if these inflationary expectations rise to 2.5% they would slow down (artifically stoking the mortgage market).  Whenever the Fed slows down on pumping newly printed US$ into the US economy the public invariably panics and inflation heats up....along with much higher interest rates (to compensate lenders that need inflation protection in higher rates).

What does this have to do with our business as Real Estate Brokers and agents?......EVERYTHING! 

Posted by

William B Blackburn, Broker

Blackburn Investors Realty, Tampa Bay, Florida

JD, GRI,CDPE,CIPS

www.BlackburnInvestors.com

727-322-2900

Comments (3)

Edward & Celia Maddox
The Celtic Connection Realty - Queen Creek, AZ
EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD

I don't think the goverment is the answer.  We need to create more jobs in the private section.

Dec 12, 2012 11:54 PM
Ki Gray
SkiHomes.com LLC - Aspen, CO
SkiHomes.com - the ultimate snowsport home search!

Looks like the Government is going to do everything it can to try and stabilize the economy.  Hope that they are able to get things together.

Dec 12, 2012 11:57 PM
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

William:  I think this is a great idea, and should be continued.  It helps us assure the availability of funds for mortgage borrowing.

Dec 13, 2012 12:24 AM