The 12 Governors of the Federal Reserve Bank will meet today. They are meeting amidst a gone crazy media hype which has caused fear in the housing industry. This was followed by a market adjustment which has caught anxious buyers/sellers to lose their vehicle for moving up to larger/better housing in 2 years. This is coupled with a very aggressive lending segment that has answered the uniquely American question of providing affordable homeownership for anyone who wants it.
I have not heard anyone in the media sigh a large, ahah. The truth of the matter is not everyone wants to have the responsibility of homeownership.
The lifestyles of the middle class can be benchmarked by the day they bought their first house. Life changed for many, it was part of maturing and starting families. The majority of us found additional tax incentives. None of us found less maintenance and more free time. Homeownership is a responsibility but I digress.
The drop in interest rates will probably be .5%. This along with new FHA higher standards may help many of the marginally capable homeowners find a window of opportunity to get out from under their adjustable rate mortgages. It may have a slight impact on the real estae industry as rates will float down to around 6%.
The market will probably improve by next spring but will not be changed much because of a lame duck presidency and the fall election. So the Fed will lower interest rates today I say 1/2%. The wise money will be on a 1/4%.