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Updated over 10 years ago on . Most recent reply

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14
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7
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Wilson Lin
  • Investor
  • New York, NY
7
Votes |
14
Posts

End of quantitative easing - How will this affect RE?

Wilson Lin
  • Investor
  • New York, NY
Posted

The fed announced today that it would be ending its 6 year period of QE. The labor market has been  recovering and the feds expect national economic recovery to continue amidst a global economic slowdown. 

They also mentioned that key interest rates would stay low for a "considerable time" to help increase inflation. What implications will this have on the real estate market? Can we expect to continue seeing similar interest rates as we're seeing today?

Article below:

http://www.bloomberg.com/news/2014-10-29/fed-ends-...

Most Popular Reply

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361
Posts
214
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Albert Hasson
  • Investor
  • Paradise Valley, AZ
214
Votes |
361
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Albert Hasson
  • Investor
  • Paradise Valley, AZ
Replied

Contrary to popular belief, there really is no correlation between rising interest rates and decreasing house prices.  The reason interest rates rise is because the economy is improving.  An improving economy usually means more jobs, higher wages, and more mobility thus allowing for people to enter the housing market and support prices.  Also, if you are waiting for the next round of foreclosures to hit the market, you will be waiting a long time. People normally do not lose their homes when the economy is good and the unemployment rate is near 6%.  I think I just read that foreclosures are back to pre-crisis levels with no evidence that the foreclosure rate will rise anytime soon.

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