Economy Watch: QE3 on Its Way Out; Vegas Residential Market Still on the Mend
- Jul 10, 2014
The Federal Reserve’s massive, two-year stimulus of the economy – occasionally still called QE3 – is now set to ride off into the sunset, according to the latest minutes of the Federal Open Market Committee, which were released on Wednesday. It looks like the thing will have run its course by October.
The plan now is to continue lowering the central bank’s purchase of Treasuries and mortgage-backed securities by $10 billion a month, until a final cut of $15 billion in October, so there won’t be a lingering $5 billion of purchases after that. As of July, the Fed is buying $35 billion of bonds to stimulate the economy; at the beginning of this year, and for some time before that, the rate had been $85 billion a month.
Of course, the Fed – as the Fed usually does – left open the possibility that it could change its mind. The program, it stresses, depends on the data, and if the data go sour, QE3 might live on. But few expect that. Now investors are watching the Fed for movement on its other monetary tool, interest rates.
Vegas Residential Market Still on the Mend
The Greater Las Vegas Association of Realtors reported this week that the number of residential properties sold in conventional (not distressed) sales were up more than 19 percentage points year over year in June. During June of last year, only 60 percent of all Vegas residential sales were conventional. In June 2014, 79.1 percent were.
The Vegas market is worth tracking because it took one of the largest hits in the nation during the housing crash, and even now hasn’t fully recovered. But there has been steady improvement in recent years.
For instance, “the GLVAR median home price is almost back to $200,000, which is encouraging,” GLVAR president Heidi Kasama noted in a statement. “While real estate investors have played a key role in helping our housing market recover in recent years, it’s also good to see more traditional buyers entering the market. The percentage of local home buyers paying with cash is now under 35 percent. It hasn’t been that low since July of 2009.”
Wall Street reacted positive to the news about QE3 on Wednesday, with the Dow Jones Industrial Average gaining 78.99 points, or 0.47 percent. The S&P 500 gained 0.46 percent and the Nasdaq was up 0.63 percent.