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From my research, Fed's Qe should encourage house sales, however the graph shows houses price in the state seem to gradually go down after 2009. Isn't that contradicting itself? Ain't the increase in demand suppose to push the price of houses to go up? or am I wrong. Is the Fed Qe effective at inducing the house sales in the US? And if so why does it happens to be that way?

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  • $\begingroup$ "You can lead a horse to water, but you can't make him drink; you can send a boy to college but you can't make him think". The Fed only affects interest rates (incl. mortgage rates), not the price of housing (not directly). $\endgroup$ – noob2 Dec 3 '15 at 19:14
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There is a contradiction in your statement. If QE supposedly motivates house sales, then the price should indeed go down. I think you are trying to say that QE should motivate house purchases. Well, QE is designed to make long term interest rates (including mortgage rates) go down, so yes it should help housing prices, ceteris paribus. If you observe, housing prices have indeed recovered substantially since QE was initiated.

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  • $\begingroup$ I don't see any issue in his statement. I think he meant "housing sales to home buyers." $\endgroup$ – Helin Dec 11 '15 at 7:09

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