Market Volatility and the Housing Conundrum

Market Volatility and the Housing Conundrum


It’s been a roller coaster of a ride over the past week or so with the stock market sell-offs, the Federal Reserve stepping in and saying in its most recent policy statement on August 9th, 2011 that interest rates will remain at near zero for the next couple of years, through the middle of 2013 (albeit with some disagreement within the committee), attempting to reassure markets, while at the same time citing that “the housing sector remains depressed” as one of the biggest obstacles to economic growth.

On the back of the recent stalemate in Washington over the debt crisis, none of this market volatility of course is likely to stimulate any more confidence in the housing sector, which had recently been showing indications of stability. If nothing else, the market volatility just goes to show that until the larger economic picture stabilizes, unemployment rates decline and credit becomes more widely available, housing will continue to be a wait and see approach.

If there is a positive to draw from the last week for so it is that for the first time homebuyer with good credit, mortgage rates continue to be phenomenally attractive and the Fed’s policy statement suggests that rates will continue to remain that way for some time.


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