As we currently live in a depressed housing market, we constantly wait and hope for the Federal Reserve and the rest of the economy to give us the “go ahead” on jumping back into real estate. Most of the news these days is not good – increasing foreclosures and the downfall of mortgage companies. With the big news on September 18th that Mr. Bernanke and the Federal Reserve were cutting rates half a point, people received a glimpse of some light at the end of the tunnel.
The Federal Reserve cut rates from 5.25% to 4.75% in order to strength the economy after the havoc created by the housing and financial markets in the last couple months. This news not only jolted the stock market up 200 points in a single day but gave consumers some hope that they will still be able to borrow money from a credible lender in order to buy a house, or for those facing foreclosure that they will be able to renegotiate their adjustable interest rate. So what’s this mean for you or anyone who is trying to buy or sell a home these days? One thing…..hope.
There is now hope for the real estate market and you might not have to wait 1-2 years to get into it. As economists predict another cut in rates by the end of the year because of the concern over a recession if the Federal Reserve remains too cautious, things have to get better. If you are a homeowner, you can feel more relieved since your investment is more secure. As for real estate investors, they can feel more comfortable staying in the real estate market because now is the time to buy houses at a lower price than even one year ago. So, both homeowners and home buyers can start getting their pencils sharpened because the future does look hopeful for real estate.
Rate Cuts and Real Estates Survival
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