How Will the Market Be Impacted by Recent Action From the Federal Reserve?

Palm Beach County Real Estate Podcast with Joe DeSane

Today we’re going to discuss a topic that may sound a little boring, but it’s actually very important. The Federal Reserve just announced that they’re going to start rolling back the balance sheet. This may not sound exciting, but it’s a very big deal. When the financial crisis hit a decade ago, the Federal Reserve needed to take emergency measures. They bought up various assets totaling about $3.5 trillion in order to inject some money into the economy. This is an enormous sum that made up almost 25% of the US economy at that time. This money helped stabilize the nation’s markets. But now, the Federal Reserve is confident that our economy has improved enough for them to slowly start taking back some of that money.This is exactly what they just announced. As you can imagine, this is going to have a massive impact throughout our economy and in the real estate industry. “If you’re thinking of buying or selling, don’t wait.” There’s going to be upward pressure on mortgage interest rates, which were previously staying fairly low. The bottom line is that if you’re thinking of buying a home, you need to realize that these recent actions will eventually make it more expensive for you to do so. This is because you’re going to be paying more in interest. If you’re looking to sell, you also need to understand that there will eventually be fewer interested buyers. This isn’t going to happen overnight. For now, they’re only rolling back the balance sheet by about $10 billion a month. This sounds a lot, but it is just a drop in the total $4.5 trillion. If you’re thinking of buying or selling, don’t wait. Acting right now is crucial to staying ahead of this change and taking advantage of our currently strong market. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.