A New House – Risks and Benefits Belindrea Luckett XECO212 Instructor: SARA SHEIKH University Of Phoenix May 17, 2013
The Federal Reserve is the main Government body that influences national Fiscal Policies which, in turn, can affect the housing market in the USA. As this body is responsible for the setting the rise and fall of interest rates, it affects the amount of money people are able to borrow through mortgages. This will affect the price of houses. For instance, if less people are able to get mortgages to secure enough capital to buy a home, the prices of those houses already on the market may fall in an attempt to lure in more buyers. If the rate decreases, this means there will be more money introduced back into the economy, meaning more people will be able to get credit to buy homes, making the housing market become more stable again. In the same way, if the increase rate is increased, this may be good news for savers but bad news for house buyers as they will be less likely to secure credit to buy a home. This will send the demand for houses fall and this will affect their overall value. The Department of Treasury is another government body that affects the national fiscal policies. In 2009, for example, the department introduced a scheme called The Home Affordable Refinance Program which became available to those homeowners who already had a solid payment history on an existing mortgage plan.
In general terms, national fiscal policy refers to the way in which a government’s spending and taxation policies are able to influence the economy. Governments tend to use fiscal policy to...
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