So my limited understanding here is that the FED's tapering and the tightening of their balance sheet really kicks in next month starting In June. During a housing boom where we've seen double digit appreciation with record low rates the FED has continued to support the market by buying billions in mortgage back securities every month. I'm not sure why they didn't taper mortgage bonds sooner I understand it creates liquidity but why directly into housing during such a strong market with limited supply and such demand.
Next month they will begin to stop buying MBS and will most likely have to unload some in the open market soon correct? I'm no economist but this will have to affect something. What are the consequences specifically to the bond and real estate market. I'm an agent and also have a finance background and am quite skeptical unlike most other realtors that are out of touch with reality. Anyone with better understanding of the bond market that can tell me what we might see.
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