The media is reporting that Chairman Ben Bernanke has pledged to slash interest rates that are needed to prevent the housing and credit problems so we don't enter into a recession in 2008.
Bernanke has made it very clear that the central bank is prepared to take agressive actions to stimulate our weakening economy. As quoted in the newspaper Bernanke stated "we stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks".
Economists are now speculating that the Fed's will lower the rate by one-half of a percentage point when they meet at the end of January.
Another drop in rates should have the effect of lowering mortgage interest rates. If your looking to buy a second home in Flagstaff or even upgrade your current home, now is a great time to make the move. Flagstaff is off to a great snow season and tourism is at its peak.
Flagstaff Real Estate. Jim and Terry Tress, Flagstaff Realtors. We specialize in Luxury Homes but devote 20% of our time and commissions to helping our Public Servants purchase their first home.
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Flagstaff is great! It is curious that the Fed would broadcast their intent- it's really not the tradition... just the opposite actually.
The feds are broadcasting their target rate change to help calm fears -- it's a part of the politics of economics. I agree that we will see no less than a .5% drop in the target rate. This will take a couple of weeks to trickle down to the lender level but should hit other affected exchanges failry quickly. So, as Matt Heaton and I agree, the feds don't set the mortgage rate -- they set the target rate which affects the mortgage rate.
I'll be interested to see how their rate cut affects the housing industry. In theory we would think that more buyers would buy, but only time will tell.