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RSS FeedInterest Rates Go Down ... or do they?? |
Sep. 24, 2007
Categorized in: General Observations
Tagged with: interest rates
Well the Fed cut the Fed funds and
the discount rate. Since the Fed funds rate dropped .5%, so
does the Prime rate. That means equity lines drop .5% at the
first of the month.
So existing homeowners who have, or
who plan to have, equity lines should be well
pleased.
It has been interesting listening to
the comments made by potential home buyers (and sellers) in recent
weeks, particularly just before the above rate cuts. Many were of
the opinion that because "everybody" knew that the Fed was going to
reduce rates, mortgage rates would also go down, thus
stimulating the housing market.
In reality, first mortgage
rates went down the day of the announcement, but in the last three
days they have now risen above their pre-rate cut levels. The
reason is the fear of inflation and the devaluing of the dollars
versus other world currencies. The currency issue can also be
inflationary.
Now longer term, we probably can
look to lower rates but as for now, the market continues as
before.
Speaking as an agent, my main
observation is that homes that are priced right and prepared and
presented professionally will always be the fastest to sell in any
market. It's not Rocket Science folks!
