In an effort curve further contractings in US economy the Federal Reserve decided to buy up nearly $2 Trillion of non-traditional assetts while leaving key interest rates low.
"Job losses, declining equity and housing wealth and tight credit conditions have weighed on consumer sentiment and spending," the Fed's monetary-policy committee said this afternoon in announcing its move.
Now the Fed previously stated it planed to buy just $600 Billion in mortgage bonds, U.S. Treasury Bonds and other securities on the open market, but is now planning closer to tripple that amount at $1.75 Trillion.
So, how does this affect housing? In the short run...offen these policies impact mortgage rates causing them to lower. In this case...rates should be back a records lows. Experts are saying this could lower 30 year mortgage rates as low as .25 %.
Comments(3)