The Bush administration's recent move to freeze certain sub-prime mortgage rates is only one of several signs that we may have hit bottom, and are poised for recovery - a slow recovery - but a recovery none the less. You have to read deeper than the first paragraph to see how this will help, but it's there. Stemming the foreclosure tide, at least a little, will keep some of these homes off an already crowded listing market.
Another sign of future recovery will be this week's rate cut, assuming that it happens. While the overnight lending rate cuts doesm't have immediate ramifications on mortgage interest rates, they do have a trickle down effect within the economy from everything from credit card rates, to car payments, and eventually mortgage rates. This usually takes about six months to really emerge (can anybody say Feb-Mar 2008, just in time for the spring buying season?).
A third indicator, and the one that will do the most good, will come when the press starts to talk about how there are plenty of housing bargains out there. As soon as this happens, buyers will emerge and start the pendulum back to the positive side.
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB