It’s been quite some time since I’ve written, and I’ve missed the mark by a few weeks with this latest news, but better late than never, right? The Federal Open Market Committee, aka “The Fed” saw fit to drop the federal funds rate by .5% a few weeks back. Not satisfied that it was enough, however, they turned around and dropped it another .25% the following week.

Other rates are following suit, of course, with the Wall Stree Journal Prime Rate now at 6% as the Fed tries desperately to save the nation from a recession by making money “cheap” for businesses and, to a lesser extent, consumers. The planned tax rebates that will be forthcoming in the next several months are also planned to spur spending by consumers, though many consumer advocates are cautioning that saving or paying down debt may be a better option for the individual, if not for the nation’s economy.

When last I looked, 30-year fixed mortgage rates were floating around 5.5%, with jumbo loans a bit more, as always. While the real estate market isn’t exactly on fire right now, lower mortgage rates should at least lift some of the burden from those attempting to sell a home, as potential buyers will have lower payments than they would have had just one month ago. In Maryland, which has been less severely affected by the real estate “bust” than most other areas, there are signs of recovery in the housing market. While anecdotal, personal experience with Maryland real estate markets indicates that homes are selling just a bit quicker than they were at the end of 2007, perhaps the result of lower rates or a general feeling among potential buyers that the market is at it’s bottom and it’s a good time to “buy low.”

Tags: 30 year fixed mortgage rates, federal funds rate, federal open market committee, housing market, maryland real estate, prime rate

Posted in Federal Reserve, Federal Funds Rate, mortgage rates | No Comments »