A great article I read today on yahoo finance!! enjoy!!
The Federal Reserve's aggressive half-point cut Tuesday could provide support for a slumping housing market.
A quarter-point drop had already been priced into the market for Treasury bills and other instruments tied to mortgage rates, according to Richard DeKaser, chief economist for National City Corp. The deeper cut means mortgage rates may have a little more room to fall, giving support to prices.
The Fed Funds rate affects a range of consumer loans, including home equity and mortgages. Lower mortgage rates would add to the number of buyers able to afford to make purchases!! Buyers generally care less about the actual purchase price than they do about the size of their payments. If rates drop, so will monthly debt obligations.
Interest rates for conforming loans - those of no more than $417,000 - are already reasonably low, averaging 6.31 percent for a 30-year fixed rate loan. Remember thats the national average of mortgage rates, the rate for Charlotte, Lake Norman area is a little lower, around 6.125%.
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