Fed Holds Interest Rates For The 17th Month In A Row

The Federal Reserve Bank has voted to hold steady the Fed Funds Target rate at 0.00% to 0.25%. The Fed Funds target rate has been at 0.00% to 0.25% since December 16, 2008. The Federal Funds Rate is the interest rate at which private banks lend balances at the Federal Reserve to other banks, usually overnight. It is the effective interest rate banks charge each other for loans.

The Chairman of the Federal Reserve Ben Bernanke has supported the decision to leave rates unchanged at 0% for nearly 17 months in order to stimulate an economic recovery. The financial crisis of 2008 has resulted in unprecedented Federal Reserve intervention in an attempt to stave off a further financial meltdown.

This is good short term news for people buying property as it is likely to help keep home mortgage rates at near all time lows for a little longer.

San Francisco Metro Area Shows Improvement

San Francisco is proving to be an unusual market for investing in real estate. The S&P/Case-Shiller 20-city home-price index, a closely watched gauge of U.S. home prices, shows the San Francisco Metro area to have the single largest year over year increase of 11.9%. California led the way with every city indexed showing a gain. San Francisco, San Diego and Los Angeles Metros all showed increases. The entire index rose 0.6% from a year earlier, while a 10-city gauge rose 1.4%, marking the first annual gains in both measures since December 2006. 11 of the 20 cities in the price index still experienced year over year declines in home prices. The market suffering the worst is Las Vegas with 14.6% decline.