Have you ever noticed when the Fed cuts rates and there’s such a big deal about it in the media that many times it doesn’t show up in a reduced mortgage rate? The only problem with this is that the typical consumer thinks that the Fed rate and the mortgage rate are the same.

It’s a good thing to always be prepared to let your clients know that the Fed rate is the rate at which banks borrow money; not the rate at which they loan money.

Right now, what the market needs is not another rate cut but a loosening of the mortgage restrictions so that more folks can qualify for a home. But don’t worry…every time the market goes through a correction and banks get scared tightening up their lending criteria they eventually loosen up the purse strings again. It’s a gradual process and not one you’ll particularly notice but trust me, banks need to lend money to make money. So folks with decent credit and a good job who may not have large down payments will be able to get back in the game very soon. The recent legislation to expand the conforming loan amounts will certainly help entry level buyers in the more expensive states.

Once first time buyers can buy, move-up clients can sell and the high end will loosen up as well. This is all a very predictable cycle that’s been happening for over fifty years. Stay the course, build your business…there are plenty of opportunities out there.

It’s a good life!

Brian