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2021-08-01 — nytimes.com

So what can the Fed do about any of this? Officials, including Mr. Bullard, have suggested that it might make sense for the Fed to slow its monthly purchases of Treasury debt and mortgage-backed securities soon, and quickly, to avoid giving housing an unneeded boost by keeping mortgages so cheap.

Discussions about how and when the Fed will taper off its buying are ongoing, but most economists expect bond-buying to slow late this year or early next. That should nudge mortgage rates higher and slow the booming market a little.

But borrowing costs are likely to remain low by historical standards for years to come. Longer-term interest rates have fallen even as the Fed considers dialing back bond purchases, because investors have grown more glum about the global growth outlook. And the Fed is unlikely to lift its policy interest rate -- its more powerful tool -- away from rock bottom anytime soon.

Ideally, officials would like to see the economy return to full employment before lifting rates, and most don't expect that moment to arrive until 2023. They're unlikely to speed up the plan just to cool off housing. Fed officials have for decades maintained that bubbles are difficult to spot in real time and that monetary policy is the wrong tool to pop them.

For now, your local housing market boom is probably going to be left to its own devices -- meaning that while first time home buyers may end up paying more, they will also have an easier time financing it.

And they'll have an easier time ending up underwater whenever this boom reverses...

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