The Fed cut the FED funds rate by a huge .75% this morning. News reports say that the "Federal Reserve Chairman Ben Bernanke approved the large rate cut after an emergency video conference on Monday night, a day when global markets had been pounded by rising concerns that weakness in the world's largest economy was spreading worldwide." AP
The Fed has also stated that further cuts are possible. The rate was cut from 4.25 
percent down to 3.5 percent - which is the largest cut on records going back to 1990. This was the first time that the Fed changed rates between meetings since the post 9/11 attacks in 2001.
Does it help Mortgage Interest Rates? While the Fed funds rate typically does not impact mortgage interest rates so directly. However; typically these rate cuts are expected and planned.
Over the next few weeks, interest rates will fall on home equity loans and mostvariable-rate credit cards. Yields on shorter-term cd's and Interest-Bearing savings & checking accounts will fall.
While it is too early to predict how the Fed rate cut will affect the mortgage interest rates, because of this unexpected change - there should be an impact - and quickly.
Currently; many lenders are reporting fixed interest rates at or near 2 year lows. The hope is that this will drive buyers back into the housing market.
If nothing else - it could be great time to Refi (I am actually starting a refi on one of my own properties).
Current Interest rates in the Washington DC area:
5.25% - 5.5% 30YR Fixed (conforming loan) 5.5% - 6.0% 5/1 ARM (conforming loan)
Call James for all your Real Estate needs and questions; servicing DC, Virginia, Maryland and the Greater Washington DC Metro area.
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