Fed Tapering Begins!

The Fed announced they would be pulling back some of their stimulus package which has helped the housing market by keeping long term mortgage rates at historic lows for the last few years.

This announcement went against the belief of the vast majority of economists who thought the Fed would wait until next year. In this month’s edition of KCM, Bill McBride of Calculated Risk:

“Although the consensus is the Fed will wait until 2014 to start to taper asset purchases, December is still possible.”

The following image helps explain the ramifications of the Fed’s decision on waiting to buy or sell.

 

Read more...

Where Prices Are Headed Over The Next 5 Years

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey

The latest survey was released last week. Here are the results:

• Home values will appreciate by 4.3% in 2014.
• The average annual appreciation will be 4.2% over the next 5 years
• The cumulative appreciation will be 28% by 2018.
• Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 16.8% by 2018.

Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

Read more...