With the Federal Reserve's rate cut of 75 basis points (3/4%) yesterday, the natural question is "Will it be enough?"  Enough to forestall a recession?  Enough to pull the U.S. economy out of recession?  Enough to stimulate the housing market?  Enough to.....?

It seems that the cut was intended especially to halt the downward spiral in the stock market.  That it did - for one day, at least.  Will the Hang Seng, the DAX, etc., react favorably?  We'll see.

But, if we look at the real estate market in Hillsborough, NJ, there seems to already (prior to the rate cut) be some movement at the lower end of the price range.  Just a week ago, the entry level price range (under $300,000) had a pending/active ratio of 16% (that is, when the active listings and pending listings were added together and divided into the total pending in that price range, the ratio was 16%); that ratio as of yesterday had moved to 19%.  An increase is a good thing, suggesting more buyers entering the market (as is usual this time of year to a certain degree).  In fact, there was a 30% in the number of pending listings over the prior week.

The entry level price range has to become more active than it has been over the past several months if the entire market is going to move.  The first-time home buyers move the market.  Recent mortgage problems have hit the first-time home buyers hard, thereby hurting the market as a whole.  That market segment has to increase significantly to move the market. 

Will the interest rate cut affect the mortgage rates sufficiently to move the first-time home buyers off the sidelines?  We'll see....