While the last moves to the discount window and Fed Funds rate served to stabilize shaky financial markets, there has been little ancillary effect with regards to housing or hiring, at least so far. Home sales remain in a deflating pattern likely to continue for a while (some estimates call for improvement by next spring; others, not until perhaps 2010). The Fed may again trim interest rates, but as we noted last week, the cost of money is only one factor; the availability of funds to those who want or need them is perhaps more important
While availability of funds may not be exactly correlated to the changes in interest rates, i believe they are strongly linked and as rates come down, the availability will clearly go up. There is always a lag effect and there are peculiarities with different parts of the country but this relationship , in my opinion, will always hold.
It will be interesting to watch the ARMS and the impact the next several months of changes have on the overall market. There will be no quick fix to the problems consumers and lending institutions have gotten themselves into-- and a quick fix would not be beneficial to our children and other onlookers that would be sure to repeat the cycle if someone doesn't pay for these mistakes.
In the meantime, it's back to basics in building our businesses. Already, there is evidence that many agents and lenders are choosing to look elsewhere for career development.
While we don't mind people quoting our material, isn't it customary for blogs to at least acknowledge the source, if not to link to it?
Interested readers can find the entire text of "Bad News = Lower Mortgage Rates. Fed Coming?" at http://www.hsh.com/trends/1193448777.html
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