Higher Rates Good For Housing Market

With the Fed rigging the interest rate market, potential home buyers remained comfortably on the sidelines waiting for further declines in home prices. Then, this spring, Fed Chairman Ben Bernanke merely hinted that the Federal Open Market Committee (FOMC), may consider scaling back its QE bond buying program. The reaction: go interest rate futures markets – the largest of all the commodity markets in terms of volume and open interest – quickly sold off and adjusted to what it perceived as a new rate environment. Subsequently, mortgage rates began rising and the yield curve (rates by maturity) steepened in anticipation of higher future rates. A death knell for the struggling housing market?
For the original version including any supplementary images or video, visit http://www.examiner.com/article/higher-rates-good-for-housing-market

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s