Fed Interest Rate Cut and Promises of Future Cuts Should Help Troubled Housing Market

The Fed cut interest rates by .5% today. Although a rate cut was expected, 0.5% was at the upper end range of what was expected. This is good news for a troubled national housing market. The stock market responded with a 300 point rally.

The rate cut is important for its financial help, but such an aggressive move is also an indicator that the Fed plans on addressing the current issues in the credit markets. Another bit of good news is that the Fed released a statement after the meeting saying that more rate cuts were on the way.

While the rate cut doesn't spell an end to the current housing problems it certainly helps. Borrowers with fixed rate arms that are set to expire are facing increased mortgage payments. By cutting rates, it will allow homeowners to refinance at lower rates which should help homeowners faced with foreclosure. It also helps financial institutions that have been worried about large numbers of foreclosures for mortgages they are currently financing.   Hopefully this will ease some of the problems currently faced with the credit crunch by allowing lenders to feel more comfortable loaning money.

Ki is a realtor in Austin Texas.  His site Escapeso Austin Real Estate provides potential buyers with a search for Austin homes.   His site also provides a description of central Austin condos.

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