Will house price go up due to fed rate is now 4.75?

Answer 1

indirectly maybe!

the rate cuts dont affect the house prices....but the rate cuts DID lower the 30yr fix mortgage rates. This will allow some buyers to afford homes.....if they keep on lowering it...then you will have more buyers in the market...making the prices go up!

Answer 2

No it will help stabilize but that is about it. The problem is the amount of houses going into foreclosure (August was a record amount) and the amount that is soon to be added to the roster. The credit is still tight which brings less buyers into the market. A half point depending on the loan interest can only mean $84 to $250 in a difference of a payment, if you are only squeaking by this might not be enough offset the upcoming rate increases. Housing is overpriced and the bubble is just beginning to burst,would guess at least an 8% decrease in prices if not more is due

Answer 3

I'm no expert but I'd say that it will just help to stabilize things AND change public perception. Perception has a LOT to do with what happens next. If there are further reductions, then you will gradually see appreciation in *some* markets...

Plus the House just voted to aid struggling homeowners facing foreclosures (WASHINGTON - The House on Tuesday approved a plan to expand federal backing of mortgages in hopes of helping struggling homeowners avoid foreclosure. Despite some White House objections, the Bush administration and House Democrats took conciliatory stances pointing toward resolving their differences...)

and there are already a LOT of programs out there helping people keep their homes - I know I'm one of them - it only makes sense for both the banks and homeowners to avoid foreclosure which is a LOSE-LOSE proposition.

I think the predictions of an *implosion* are grossly overrated - that's why the House AND Bernanke are acting now - the housing market tanks much further the whole economy will tank.

I think you'll see stabilization for the next 6-10 months and then a *slow* increase in prices in many if not most markets.

Answer 4

Not for a while. That rate cut was to help stop things from getting worse. There are still too many homes for sale, too many about to go into foreclosure because the mortgages aren't being paid, too many about to go into foreclosure because the homeowners association assessments aren't being paid, and homes that are already built but that the construction companies have not listed for sale because placing those homes onthe market will cause prices to further fall.

During the bubble, prices were artificially inflated because of mortgage scams, flipping (purchasing a home just to immediately sell it at a higher price) appraisal fraud, and other means. 1 acre of land (much of it a swamp) in the middle of the woods that does not have a road or utilities running to it in a small town should never have been worth over a million dollars. Yet, may of my clients paid that. I'm an attorney. Me and many other young professionals (doctors, lawyers, architects, etc. - people with high paying jobs) moved from my hometown because we could not afford to buy a home. If we couldn't do it, how could teachers or construction workers? Until the home prices reflect what the average person can afford to buy, they will keep falling.

The current projections are a stabilization of prices starting in 2009, nationally. In some areas, they will keep falling for years to come.

Answer 5

It's not so much what the Federal Reserve did today.

They don't finance homes.

Watch congress. They just voted majority to allow the FHA to increase their loan limits to $500,000 AND refinance people stuck in sub-prime mortgages to a 30 year fixed rate.

With the elections coming up next year. Congressmen and women will try and "Out do" each other passing legislation to save the "Homeowner in Foreclosure"

Arizona also just received 400 million dollars for a grant program where you can get 5-6% down payment for first time homebuyer that NEVER HAS TO BE PAID BACK!

Look for more of these programs to come down the pike in the next few months.

Hope this helps!

Terry S.

http://www.Welcome2Arizona.com