The Fed Exits Housing Market: What is The Future for Home Owners and Home Buyers?

The Fed’s mortgage purchases have ended – what’s the future of housing market?

As reported by the LAtimes.com, the Fed’s $1.25-trillion campaign to propel the housing market by purchasing mortgages has just ended on March 31, 2010.

The purchase of huge amount of mortgages has given the Fed its largest balance sheet ever. Is it a good thing? Not quite, according to some.

Mortgage takers worry that the Fed’s mortgage-purchasing endeavor will prolong inflation. And to make matters worse, the end of the campaign also sparks worries that the mortgage rates will climb up, thus repelling home buyers away. Unhappy homeowners, unhappy real estate agents, worrying outlook on mortgages.

Sure, some market facts show that mortgage securities enjoy jump after the Fed makes its exit from the market, as reported by BusinessWeek.com. However, will the mortgage bond keep enjoying such surge? Some doubt it, some stay optimistic. Only time will tell.

Regardless the worries, investors in Asia seem to be keen enough to take benefit from the exit of the Fed, as reported by BusinessWeek.com. Let’s see how the housing market will react in a few days following the Fed’s exit from the housing market.

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Tags: housing market, mortgage bond, mortgages, the fed

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