How Will Housing Market React to Tapering of QE?

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Oct. 23 (Bloomberg) -- Re/Max CEO Margaret Kelly discusses the current housing market climate with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

Tonight.

The housing sector is keeping a close watch on the fed to see when policymakers might begin winding down monthly asset purchases.

Many guests have told us that they believe that because of the shutdown, tapering might be put off until next year.

In the fed does take action, how do you think the housing market will react?

I think that looking at the last time the fed decided not to taper, we saw the reaction of the market.

It had factored in that the tapering was going to happen and happen soon.

What we will see is a small increases in mortgage rates.

To put it in perspective, the are still at almost 60 year lows.

Mortgage rates have been below five percent if you look back over 20 years, and about six percent.

Speaking of the government shutdown, what impact if any did you have on re/max.

As the ceo, what you have on how the situation was handled, how it affected business and consumer confidence?

The impact it had, we haven't felt it a lot.

It is usually when home buyers are applying for mortgages, and the need to get verification of their employment and go to the irs, and they couldn't get that done.

We haven't felt it yet.

We will see if we do see the delayed reaction.

We are hoping that the shutdown only being so many days long will not have impacted it too much.

I was going to say, as the ceo, could you imagine anybody running your business the way courses run the government?

No.

i feel that politicians were more concerned about being reelected than doing what is right and the government.

They need to reach across the aisle and forget that they are a democrat or republican and say what is best for the american people and for our country.

I do not think they are doing that.

Likes the former u.s. under secretary of state james glassman wrote a bloomberg view columnist fannie mae and freddie mac, the government sponsored enterprises that now back nine out of 10 homes in the u.s. brady he writes that fannie and freddie are now thriving and that eliminating them will harm the public.

He writes that fannie and freddie should be treated like citigroup or any other large financial company.

What is your reaction?

You look at freddie and fannie and you are right.

Nine of 10 loans are impacted by them.

It is not something we can automatically go in there and change.

We need to do is look at it and restructure it.

We need to have that secondary market for mortgages.

Otherwise the cost of mortgages will go up.

They are needed but it is just how they are structured that we really need to look at.

Margaret kelly, thank you for

This text has been automatically generated. It may not be 100% accurate.

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