The House passed it's version of the Economic Stimulus Package around the same time the Fed announced another 1/2 point rate cut. That's 1.25% in 8 days. A new record.
The stimulus may have little tangible affect on the day to day for you and I. We just need to make sure a lot of the pork isn't added and that benefits are directed towards the segment that helps build the economy, the working class as well as employers. Extending welfare, unemployment and other Pelosian pork will do little to spark growth.
Part of the package is to TEMPORARILY raise the conforming loans limits. What that means is that the current limit ($417,000 for 2008 per Fannie and Freddie Mac guidelines) will be raised in high cost areas. What that means to the Reno market is yet to be seen. The package calls for conforming loan amounts to be raised 125% of the median home price in the high cost areas. If that is the case, there may not be a change in the Reno market, as the median home price is now roughly $350,000. A 125% increase would raise the limit to $437,500. Not much change.
The 2nd Fed cut in a little over a week was a good move, albiet a little late. As Greenspan and crew did, the cuts should have been coming all along, in a gradual fashion, vs. this seemingly knee jerk reaction. At any rate, hat's off to the Fed for acting promptly. They say they are trying to avoid a recession. News Flash....we're already in one!
As for mortgage rate watchers, stop watching and start acting. Keep in mind, any good economic news (if the stock market starts picking up again, for example), is not so good for mortgage rates. Prime rate will go down (most certainly) with the Fed lowering. This will have an immediate affect on your home equity lines and, witin a few months, consumer financing (credit cards, car loans, etc).
Keep an eye out, be prudent, and keep the cards and letters coming!
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