FORT MYERS, Florida (October 30, 2013) – The Fed’s quantitative easing – the purchase of $85 billion in securities per month – has done its job of keeping the cost of borrowing money to a minimum. But what will happen when this influx of cash ceases? How will it affect mortgages and home sales? To understand these questions on quantitative easing, we must first understand what impact financing has on value and the overall market.
Overall, houses continue to be at all-time high levels of affordability. Prices are increasing, but buyers are coming into purchases with more income and cheaper financing. Also, there is no shortage of inventory in Southwest Florida. These factors make it easier for buyers to buy and agents to sell houses.
And once the quantitative easing ends? Likely the cost of borrowing will increase; in other words, mortgage rates will be higher. Likewise, as financing qualifications are already strict, the qualifying standards will toughen even more as all provisions of the Dodd-Frank Act come into full implementation on January 10, 2014. Also, house prices will continue to rise. All of these factors will combine to continue the trend toward renting rather than owning property in Southwest Florida for lower-income buyers, which means more opportunities for investors and property managers.
Higher-income buyers will have more choices in the market due to builders actively competing with features and financing for those who need it. As for housing prices? That will be up to the sellers and their real estate professional.
If you would like to learn more about the present and future of institutional financing, attend Larson Educational Services Agent’s Guide to Financing Continuing Education courses.
Larson Educational Services
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1400 Colonial Blvd, Suite 44
Fort Myers, FL 33907