QE is back!

The Federal Government has been instructed to buy $200 billion worth of mortgage debt through Fannie Mae and Freddie Mac. It is important to note that this is quite a small number versus the bond purchases that have been made recently. While it will, according to most analysts, not likely have a dramatic effect on interest rates by itself, it will likely knock a few tenths of a percent off interest rates in the coming months. 

Recent Job data numbers for ADP, JOLTS (Job Opening and Labor Turnover Survey) have been making clear what some analysts have been saying for a while that the job market is softening and weakening. And of course in an election year easing house prices in a tough cost-of-living environment is not unprecedented.

What This Means Going Forward

Markets are responding favorably to both policy action and economic signals. While no one should expect a return to ultra-low pandemic-era rates, today’s environment is meaningfully better than it was just a few months ago with a 30 year fixed mortgage at about 6.1% and this should, say most analysts, go under 6% in coming months.

For buyers, sellers, and homeowners alike, this is a moment worth watching closely. The window may not stay open forever—but for now, the breeze is finally blowing in the right direction.