Will the Fed Taper Hurt Housing?

By Marcie Geffner - California Real Estate

The Federal Reserve has used extraordinary measures for the last several years to keep interest rates low and housing markets in recovery. But now the Fed has begun what's known colloquially as "the taper," a reference to "tapering off" its programs of buying billions of dollars of Treasury bonds and mortgage-backed securities every month.

What the taper will mean for California REALTORS® isn't completely clear since the change involves multiple variables and crystal ball-like predictions. Yet some outcomes--chiefly higher mortgage interest rates and lower housing affordability—look likely.

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