Housing improvements reduce need for additional stimulus

Home prices continued to appreciate during the second quarter, and one expert claims this could have much broader economic implications.

Home prices continued to appreciate during the second quarter, and one expert claims this could have much broader economic implications.

A thinning inventory caused property values to appreciate 0.5 percent during the three-month period on an annual basis, the Wall Street Journal reports. This marked an end to 20 consecutive months of declines.  

"The data fits into the realm of an asset recovery in both real estate and equities that will support demand in the months ahead, and which makes the decision to pursue additional QE (stimulus), at a minimum, less pressing," Alan Ruskin, head of foreign-exchange strategy at Deutsche Bank, told the newspaper.

This trend is one of many recent developments adding to the housing market's recovery, and Ruskin predicts that the Federal Reserve could shift its broader economic policies as a result.

In addition, if the next round of job market reports indicate that the economy added at least 100,000 new employment positions in August, the need for additional monetary stimulus could be unnecessary, as it could give Americans the financial safety and soundness needed to make major investments, such as purchasing property.



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