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Was That Really The Right Move?

By
Real Estate Agent with Encore Realty
   As many of you know, today was the day a lot of people have been waiting for.  The Fed cut the rate by half a percent.  Since we starting feeling the air slowly going out of the housing bubble, I have been watching things closely and reading more about financial stuff than I ever had before.  I do not like our current housing situation now, but it has forced me to study up on the economy and watch the Fed closely.  I had never done this before and should have.  I feel that if you as an agent understand the mortgage end of a transaction and what effects interest rates, you will be a much better agent and give your clients the level of service they deserve.  In no way am I a mortgage banker or broker.  I never claim to be an expert in that field and probably never will be one.  However, I do ask lots of questions and do my best to keep informed about that side of things.  With that said, I am not sure that todays cut was such a good idea.  Yes, it will encourage people to borrow and help keep things going, but is this the proper way to recover?  How can we get things back to normal if we continue to cut rates and head in the same direction we just came from?  Now, I may be way off in thinking like that.  I am sure it is more complicated than I could ever understand, but it seems to me that in order for things to correct themselves we should just leave the rate alone and let people get use to the interest rate and home prices.  People will borrow money and buy homes no matter what the rate and prices are.  Bottom line is we have to live somewhere right?  I know we need to help stimulate the economy, but in doing so are we taking a step backward or forward? Maybe I am way off here and if so, feel free to tell me.  Enjoy your day and hopefully your phone will start to ring more now.

Comments (1)

Lexa R. Montierth
NextHome Complete Realty - Tucson, AZ
Real Estate Sales Agent and Marketer

I just heard about the rate cut this morning, but thank goodness is all I can say.  Not for the fact of the rate cut, but just something good so the Media can stop with the doom and gloom news.  I know that is what is hurting everything more than the actual mortgage industry, and home prices.  Speculation, either good or bad, will send business in a spin.

 

Lexa 

Sep 19, 2007 07:37 AM