Will We See Rates Drop?

Now that the FED cut the Fed Funds rate for the second time this month down to 3% the question on the consumers mind is will we actually see lower rates for home mortgages. The answer is a likely--'Yes'. But wait a minute Glenn--You just wrote in the blog below that the interest rates will not go down, what gives? While it is true that some banks will not reduce rates we operate in a competitive business climate and some lenders will price their 15/30 mortgages accordingly to capture more business. But with all predictions I can be wrong. Interst rates have been hovering below the 6% mark now for quite some time--a historic low. We can and should anticipate that 15yr and 30yr rates will be in the low 5% range. There is a current pent up demand for housing, despite the negative media accounts. Families still plan moves and corporations still relocate people so there is demand out there. With this drop I think we will see more and more buyers get into the market. Time will tell.