A New House
April 5, 2013
A New House
One government body that influences national fiscal policies is the Federal Reserve. The Federal Reserve is the central banking system of The United States. The Federal Reserve influences the interest rates on home loans through the buying and selling of bonds and securities. If the Federal Reserve purchases a large amount of bonds and securities interest rates on home loans will lower; causing a rise in home sales.
A recent national fiscal policy that effected ...view middle of the document...
A rise in housing starts and home sales can be attributed directly to the lowering of interest rates.
When it comes to weighing the risks and benefits of purchasing a home I would recommend a person find out as much information as they could on their own before consulting a professional. They should look at interest rates and determine if they are trending up or down. Look to see if the Federal Reserve is buying or selling bonds and securities in order to help determine the future trend of interest rates. If interest rates are trending down and the Federal Reserve is continuing to purchase bonds and securities it may be wise to wait as interest rates will probably continue to fall. However, if interest rates are falling and the Federal Reserve has started to sell back bonds and securities purchasing soon would be smarter since interest rates will most likely rise in the near future.
Mankiw, N. G. (2007). Principles of economics (4th ed.). Mason, OH: South-Western Cengage Learning.
(2013, March 20). Fed holds firm to stimulus plan despite brighter economy. Chicago Tribune. Retrieved from http://articles.chicagotribune.com/2013-03-20/business/chi-fed-holds- firm-to-stimulus-plan-despite-better-data-20130320_1_asset-purchases-esther-george- policy-accommodation