Housing Sales
While the couple had considered buying recently, they never pulled the trigger. That changed in April, once they decided on a three-bedroom, two-bathroom colonial home in Arlington, Virginia, and got a 30-year fixed-rate mortgage at 3.75 %.
It was a combination of your own finances being ready and rates being great,” said Mike Fry, 28, who is employed by a financial-services company. “The market seemed good, and that we found a house within our price range.”
Their experience shows how Fed Chairman Ben S. Bernanke’s low interest-rate policy may finally be beginning to pull housing from a six-year tailspin, providing a lift to the broader economy. House buyers are increasingly benefiting from record-low borrowing costs as barriers for example falling prices as well as an overhang of foreclosures begin to dissipate.
“The Fed is extremely much focused on the housing industry because that’s typically the easy channel low interest rates — through home sales and refinancing,” said Michelle Meyer, senior U.S. economist at Bank of America Corp. in Ny. “We are seeing some signs the credit channel is unclogging modestly, and also the Fed is going to be quite happy with that.”
Sales of existing homes rose 9.6 % in May from the year earlier, with 4.Six million homes changing hands in a seasonally adjusted annual rate, based on a June 21 report in the National Association of Realtors. A 15 % jump in an index of contracts to purchase existing homes that same month suggests the marketplace will continue to improve.
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