More Money for New Jersey Home Buyers?
January 23rd, 2008 Categories: Buying a Home in NJ, NJ Mortgage Update, Real Estate News
Tuesday, January 22, 2008 Fed Lowered Interest Rates and New Jersey Home Buyers May Benefit
Steve Lupton of Metrocities Mortgage Sent Me the Following Alert I Wanted to Share:
NEWS ALERT!!!!
1. Today, the Fed lowered both the Fed Funds Rate and the Discount Rate by 75 basis points. This unusually aggressive move is an acknowledgement that equity and credit market issues are threatening growth in the real economies throughout the world.
2. As of Friday Jan 18th, all of the S&P gains from 2007 were erased and equity markets world wide are in a “bear market” (down 20% off their highs)
3. Since these Fed rate cuts were already priced into the market, we can’t assume that mortgage rates will drop immediately. However, it is safe to assume that the downward trend will continue. I will keep you posted.
4. There MAY be a silver lining for us. If the Fed continues on this path it may give a boost in the arm to those who need to refinance. It may also increase awareness of “low rates and lower housing prices” for the fence sitters.
POSITIVE SPIN:
1. There are 2 ways to correct over inflated asset prices and over leveraged investment positions.
~Gradually, over time (taking years)
~Cathartic Flush. Very frightening, very disruptive, very painful with some big losers. (Countrywide, MBIA, etc.).
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