I just read that the fed will most likely cut rates again. We are thinking about buying a new home, but were waiting for the prices to drop even lower. Houses in CT that were 850K 3 - 5 years ago are now around 650K Should we wait longer, or will the market now come back up?
2007-12-09 01:12:10 · 7 answers · asked by ct_talent_scout 1 in Business & Finance ➔ Renting & Real Estate
First let me say that timing the market (real estate or other) is impossible. When the real estate market was soaring everyone was jumping on the bandwagon and people didn't see the decline coming as hard and as fast as it did. Those that claim to know are liars or were predicting it since 2003 and eventually it happened. Will home prices in your particular area and school district in CT. go up or down is NOT dependent on the national real estate market or anything you will see in the national media. Real estate is completely regional and always will be.
The Fed is not trying to change or stem the tide of lower home values by lowering the discount rate. They are solely worried about the overall economy and inflation. The real estate market has been boosting the economy for the last few years and now it is dragging the economy.
Do your research, think long term and pull the trigger - good luck.
2007-12-09 04:05:05 · answer #1 · answered by Rob Kosberg 2 · 0⤊ 0⤋
No. Lower fed rates will slow price declines, but will not drive prices back up. Prices will not stagnate for at least another year, so you have a solid 12 months of pricing declines to ride out. After that, they will plateau for at least 3-5 years. THEN they will start to rise from that low mark, but won't get back to their peak levels until 2015 or even 2020.
WAIT LONGER! The market isn't coming back for a LOOOOOOONG time and if you think you're seeing good deals now... just wait. People and banks and the government are going to be GIVING houses away (metaphorically speaking). Keep saving up a bigger and bigger down payment!
2007-12-09 01:22:30 · answer #2 · answered by Keep On Trucking 4 · 0⤊ 0⤋
No, they will not. Analysts (CNN report) are predicting that within a year, an average home value will have fallen by 30%.
Foreclosures, are the problem. When there is a record number of foreclosures, then someone has to pay for it...and it WILL reflect in HIGHER interest rates for borrowers.
The fed rate cut is not being given to help stimulate home sales...they are being given to keep the PRIME rate low...which is the driving force behind ARM loans and interest-only loans...and that is to help borrowers not to take a huge "hit" in a rate increase that can increase the foreclosures.
The gov't has made it very clear that they are going to let mortgage companies sink or swim..they caused the mess, they are going to have to clean it up.
It is the same as when there is a major hurricane or flood....do you see a drop in homeowner's insurance? Of course you don't, they increase.
A drop in the Fed Rates does NOT equal a drop in the mortgage rates.
2007-12-09 01:45:03 · answer #3 · answered by Expert8675309 7 · 0⤊ 0⤋
Not immediately. There is an oversupply of homes, both new and old on the market right now, which makes it a buyers market- Look for some great bargains while the situation is bad with interest rates!
2007-12-09 01:16:16 · answer #4 · answered by jpturboprop 7 · 1⤊ 0⤋
The form of homes on the marketplace is beside the point. the U. S. costs of interest will stay low as long as we've severe unemployment. And the Treasury is offering truly a lot of money to the economic equipment. So consistent with threat you are able to desire to bypass returned to re-do Econ one 0 one. As for the different responder, there is yet another adage: in case you owe the economic corporation $a million,000, you're in hardship. in case you owe the economic corporation $2 trillion, the economic corporation is in hardship. China is the economic corporation. in the event that they unload each and all the USD debt they carry, they're going to lose plenty muney, it is going to harm even them.
2016-11-15 00:23:45 · answer #5 · answered by ? 4 · 0⤊ 0⤋
I doubt it. It will help keep the banks from going under. They are taking a huge hit from the subprime loans, and this supposed freeze will keep them running in the red for many loans.
2007-12-09 02:14:18 · answer #6 · answered by Landlord 7 · 2⤊ 0⤋
according to investment banking house morgan stanley
home prices will drop for three more years.
that was just released about a day or two ago.
2007-12-09 01:15:46 · answer #7 · answered by Jerry S 7 · 0⤊ 0⤋