Friday, November 05, 2010

A Couple of Things:
This week a couple of interesting things happened. Both should bode well for the housing market as time passes, although how much time will have to pass is something that's open to debate.

First, the Fed announced it is establishing a QE2 policy, and, NO, that isn't the large boat they're talking about. QE2 is quantitative enhancement. IN normal people speak, that means that they will buy another $600 Billion of US Government notes. The net effect of this is that interest rates will likely drop another 25-50 basis points over the next few months. In case you don't recall, there are 100 bp's to one per cent of interest. Lower rates will simultaneously make home purchases easier (if you're a seller, get that house ready to go!); and help stimulate the economic recovery by making it easier for businesses to finance their operations.

Second, the latest jobs report, out just today, shows the creation of over 150,000 new jobs in the private sector. This is where jobs most need to come from, as the private sector runs the economy and is not an artificial type of job category such as temporary government positions like cencus taker. Unemployment is still at 9.6%, but the new jobs number is certainly a step in the right direction--an important one!


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