Despite The Feds 3/4-Of-A-Point Rate Cut, Experts Don't Expect Mortgage Interest Rates To Decline
The Federal Reserve cut the Fed Rate by 3/4 of a point today; however, home owners and home buyers shouldn't expect a drop in mortgage interest rates, CNBC reported March 18, 2008.
If recent history is any guide, rates may even increase a bit.
"It's all because banks continue to be reticent to lend money and investors are especially leery of mortgage-backed securities, the market for which has been shattered by hundreds of thousands of defaults during the subprime mortgage collapse. Instead of lending money, banks are using newfound liquidity brought on by rate cuts and Fed term auctions to boost their balance sheets and pay dividends."
Many on Wall Street expected a full percentage point cut.
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