By Paul Muolo
It’s official: we’re in a recession! (Twelve months and running, apparently.) Historically, recessions usually spell good news for mortgage bankers because the Federal Reserve (in an attempt to work the nation out of the economic morass) usually cuts short-term rates drastically, which is what we saw earlier in the decade under Alan “The Maestro” Greenspan. But short term rates are already at 1% and the mortgage and housing markets (as we all painfully know) are hardly booming. The question on everyone’s mind is this: when will home values stop falling? The key to answering that question is the unemployment rate, not interest rates. This Friday the new monthly employment figures come out, and based on the headlines of the past four weeks don’t be surprised to see the figure north of 7%. As for interest rates, look for the Fed to cut another 50 basis points off the overnight borrowing rate at its next FOMC meeting…
Hi Matt
Things do not seem to be getting any better from 12/2 when you posted this article.
I am not sure on what to do about the bail out of the auto industry. We helped Chrysler and they worked it out, but Lee had a plan.
These others seem a big arrogant and greedy. I would hate to see the mass layoffs that would result, however another part of me would like to see them sell off divisions and restructure.
You hit the nail on the head with your comment, it is the unemployment rate, not the interest rate.
Comment by Sydney — December 9, 2008 @ 11:36 pm