Phangarde Realty Blog

Finally, the Federal Reserve cut its key interest rate for the first time in four years in a bid to ensure that the softening economy doesn't slide into a recession. Stocks soared in reaction.

The central bank cut its key federal funds rate from 5.25% to 4.75%, and it also cut the discount rate from 5.75% to 5.25%. The cuts were larger than most Fed watchers had expected.

The federal funds rate, which is what banks charge each other for overnight loans and is the basis for everything from business loans to credit card charges, has been at 5.25% for more than a year. But the Fed has not cut the rate since June 2003.

The reason for the dramatic cuts was to help the economy weather the effects of this summer's credit crunch. The Fed said it didn't want the housing slump to spread throughout the economy.  Such movies, will hopefully strengthen the housing market, to help those families who have been in tough situations. 

These actions by the Fed, has been expected but many speculated that such a cut would cause more effects and become a means of escape for individuals who benefitted from the crisis.  As with anything, its a cycle and all things must come to a hault.  For now, this news is a breathe of fresh air for many, in that perhaps this will spark the housing market to rebound, and allow people to reinvest in the housing industry, whether it is purchasing a second home, investment property, or a new place to call home. 

There is no better time to look for a home than now, especially with the new revelations of the Fed's actions.  Take this time to consult a contract negotiation specialist to help you prepare and make a strong offer on your next purchase.  Not just anyone will do, now is the time for due diligence to search for a brokerage that understands your advantageous in the negotiation process and where and how to approach your investment.