On Thursday, the Federal Reserve decided to try and inject some new life into the economy by announcing it will buy $85 billion in bonds this year.
Economists said that in theory, the move will lower interest rates and possibly make it easier for companies to borrow money. This could, in turn, make it easier for companies to hire new workers, thus reducing unemployment.
This could also result in lower interest rates on mortgages, (which are already very low, historically).
I wanted to know how this might impact the real estate market locally. There are still many people looking to sell their homes if they can, but also about 1,000 new rental apartments coming online at various developments in the Odenton Town Center.
I spoke with Julie Orsini, a consultant with Primary Residential Mortgage, Inc., a Towson-based company that works with clients throughout the area, including Odenton.
Here's what Orsini said in response to my inquiry:
"Wow, the markets are really responding to this new news! It is expected to move rates lower and today, we can see that. What I am also seeing is that it has not shown up in our rate sheet pricing that much today. I do believe we will continue to see improvement.
The purchase market has been improving. Interest rates are expected to continue to stay low and I believe more buyers will jump into the market. Unemployment seems to be the biggest issue and until people are feeling confident that they will be able to keep the jobs they have now, we are not going to see the market heat up. I feel like we are back in 2008. We are less than 60 days from the election and everyone wants to wait to see the outcome before making any big decisions.
...The rental market is doing great! It would be great if we could move those potential 1000 renters into homes in Odenton … based on the reaction I am seeing, this new round of bond buying will help to keep rates low. This Fed meeting was what the market was waiting for, direction. Now we will see how the markets do once the information has been processed. Great day for your 401K and if you wanted to lock in a rate for a purchase or refinance!"
Do you plan to buy a home in the near future?