Fed drops rates two weeks in a row

This week our listings saw an average of 2.7 showings each continuing the slowly increasing traffic pattern.   The federal reserve dropped its key rate for the second week in a row which makes for a 1.25% drop in just two weeks.   This  puts the Prime Rate at 6.0% which is 2.25% lower than the 8.25% rate at this time last year.   The average 30 year fixed rate for January 2008 was  5.76 which is the lowest we’ve seen since 2005.   These interest rate drops are sure to boost  buying, particularly in our  local market which  hasn’t been negatively affected nearly as  much as other markets.   In fact, when you combine these low interest rates with the drop in  both new and existing home sales,  you get the perfect buying opportunity.   That  may not have an  immediate impact on sellers, but  surely it will ultimately bring  more offers & contracts as buyers get off the fence.

Last week I read a very interesting article on the economy in the Wall Street Joural, by Brian Wesbury,  The Economy is Fine (Really).   Finally, someone has put a realistic perspective on the economy we are currently experiencing.   Guess what?   Its really not as bad as everyone is making it out to be.   Of course there is such a thing as a self-fulfilling prophecy.

Leave a Reply

Your email address will not be published. Required fields are marked *