Fed Move to Buy More Securities Should Boost Housing Markets

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The Federal Reserve announced today that it would purchase an additional $750 billion in Fannie Mae and Freddie Mac mortgage-backed securities and up to $300 billion in longer term Treasury securities. This is great news for American home buyers and homeowners because mortgage interest rates will continue to remain at historic lows (and potentially drop even more).

This should help improve many home buyer’s ability to purchase a home. Potentially homeowners facing challenges will be able to refinance into better terms. We are already experiencing a great improvement in housing affordability due to historically low interest rates, and the Fed’s move will push affordability conditions to the best levels in 40 years. In addition, continued low rates will lessen foreclosure pressure and help stabilize home prices sooner, as more American buy homes and draw down inventory.

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