Economics__Sociology

The government bodies which influence national fiscal policies that potentially affect the housing market are the Federal Reserve. The Federal Reserve can lower or raise discounts, reserve ratios and buy or sell bonds and securities which can influence interest rates. In order to increase the supply of money and lower interest rates the Federal Reserve has cut discount rates, which hopefully will boost consumption and investments. This will expand the demand for more housing at an affordable cost to consumers, with a lower interest rate. The Federal Reserve decides if interest rates needs to rise or fall. The United States Housing and Urban Development can be a major influence of national fiscal policies that affect the housing market by creating jobs through the department's housing and economic development investments throughout communities in the United States; an increase in employment can raise incomes to boost the economy. There are many national fiscal policies that can affect mortgage rates, housing starts and housing prices such as the lending rate. The lending rate establishes if consumers can borrow money from the Federal Reserve toward new/old mortgages and housing starts. If there is a high interest rate the price of housing is high; if interest rates are low the price of houses are at an affordable price. Example, the interest rate in the housing market today are at an all time low because of the economy, now is the time to purchase a home. Whereas, a house that normally sells for a million dollars can be purchased in today's market for 500 hundred thousand or less; because of the decrease in demand for houses, consumers can purchase homes with lower mortgages, first time home buyers plan and for the low-low. When purchasing a home there are many risk and benefits. I would suggest to consumers to weigh all options before finalizing their decision on making this big investment. Look at the economy on an overall average, know your limitations in spending (do not exceed your means for living comfortable).       Cassandra Harris University of Phoenix CassandraHarris@email.phoenix.edu