Yesterday the FED announced QE3, a program to impact the economy by lowering long term interest rates through bond buying. Nationally the real estate market is strengthening and could help lead to economic growth, hopefully spurred on by QE3. So we wanted to look at how QE3 will impact the Cincinnati Real Estate market.
QE# and the Local Real Estate Market
While QE3 is a national program, real estate is a truly local enterprise. The potential impacts of QE3 on the macro economy are the increase in business borrowing, increase in business hiring, and the freeing up of cash/credit to increase consumer spending and therefore increase inventories and orders. Home purchases are major economic events beyond the purchase of a home. Each purchase includes movers (maybe 2), painters, landscaping, and handy-men. In short – economic activity.
Lower interest rates should drive more home sales.
The local impact will be seen in additional refinances, and hopefully investment purchases as well as move-up purchases. The market segment with the largest challenge to overcome is the first time home buyer. Lending standards are still more strict than 2006 and many borrowers are not qualifying for loans. The real value will come in the job security and job growth that this maneuver can provide. With additional jobs come additional economic security and that will bolster the first time home buyer segment and the impact will effectively trickle up.
Have you been thinking about buying or selling real estate? Contact Alison or Brett today!