Posted on Tuesday, 5th January 2010 by admin
The minutes of the recent Federal Reserve Meeting showed a continued concern over housing. Some members of the committee favored continued purchases of mortgage backed securities. The Fed is scheduled to end its purchase of $1.25 trillion of mortgage backed securities by the end of March. Those in this group held that pulling the plug in March was too soon.
Some members were comfortable with the current stabilization in the housing market and argued that ending the program was the right policy move. Fed officials said that in general, they see continued improvement in the housing market going forward.
Nevertheless, the Fed is worried that high unemployment will put a damper on buyers coming into the market. Right now there are tax incentives of $8,000 and $6,500. These incentives are due to expire in the spring also.
The Fed took note of the sluggish housing numbers that came out for November after the first tax incentive program ended. They are worried that the same thing could happen again.
It’s unlikely that we’ll see a robust return in the market until the unemployment situation turns around and Americans gain more confidence that the economy is growing again, with significant job growth.
Do you believe that Americans are feeling more confident about the economy?
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Tags: Housing
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