My Real Estate Blog

Deflation fears are gradually receding. Last year's Federal Reserve action to buy $600 billion worth of Treasury Bonds was an attempt to spur recovery and keep long-term interest rates low. It appears that board members are now mildly optimistic about 2011.

According to the Federal Reserve, "The economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment. Household spending is increasing at a moderate pace, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit."

In order to continue this promotion of recovery, and to ensure healthy levels of inflation, the Federal Reserve committee had decided to continue expanding its holdings of securities. The Fed will be buying $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month.

Home sales are on the rise as well -- in both pending and news home sales. Pending home sales rose by 3.5% in November.