The action of the Federal Reserve Board of lowering the Prime Rate this past week is getting high marks from many around the country, including the National Association of Realtors. For quite some time they have been on the band wagon urging the FED to take action to help stimulate home buying process and make it attainable again for those in the country looking to purchase.
With the rate reduction and mortgage interest rates slipping into the 4% range in some parts of the country, they certainly have done that. The larger issue is how many people will actually qualify for those loans to either re-finance their existing mortgage or purchase a new one.
The bank regulators now seem to have a stranglehold on lending institutions to ensure that the underlying issues and loans that originally caused the massive problems that we have today do not resurface, which is understandable. It will be interesting to see what the effect these exceptionally tight restrictions will have on the market and home sales going forward.
V.K. [Mel] Melhado PA
Fine Home Specialist
Preview Naples Group
Premiere Plus Realty Co.