Early Christmas Presents

In what's been a pretty gloomy year for real estate in general, it's now raining gifts!

There are reports surfacing that President Bush has made a deal with several very large mortgage lenders, including Wells Fargo and Countrywide, the two biggest, to freeze interest rates on a number of their loans. These reports are unconfirmed and there are obviously no details, but what a delightful and intriguing possibility! This has the potential to have a huge impact on the 2008 market.

The Fed has done everything it can, short of taking out an ad in the New York Times, that it's going to cut interest rates again in December. While this does not directly impact mortgage rates, it does have implications for the entire credit market. And, since one of the problems plaguing the housing market right now is the greatly reduced lack of credit, this is also potentially very good news. The important thing here is not so much the rate cut itself as the recognition of the Fed that there's a serious problem and that they're committed to working to fix it.

And, speaking of the credit markets, the infusion of cash into Citigroup, courtesy of Abu Dabi is also a good thing. There appear to be other countries with large amounts of cash also contemplating stepping in and buying into some major financial institutions. This will all help in easing the credit crunch.

The stock market has had a great week. Again, there's no direct impact on the real estate market. But all these bits of good news impact consumers impressions of what's ahead for the economy. (By the way, I suspect that it's no accident that this is all happening during the Christmas shopping season!)

So, enjoy this unexpected plethora of gifts. May visions of sugar plums dance in your heads all weekend!