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Fed cuts Rates across the board

You may have heard that the Federal Reserve and many other global central banks cut their interest rates yesterday in an attempt to entice more loans and therefore put a little spark back into the economy.  Below is a quick summary of what was done.

·        Fed cut it’s rates from 2% to 1.5%

·        Bank of England reduced from 5% to 4.5%

·        European Central Bank from 4.25% to 3.75%

·        Central banks of China, Canada,  Sweden and Switzerland also had rate cuts

·        Locally, as a result of the Fed’s cuts, All Local banks cut their prime rate from 5% to 4.5%

 

Again, all good news if you are thinking of taking a loan out in the near future!  This will initially help your Credit Card and Car Loan rates and as we move forward Long Term Debt (such as Mortgage Loans) should have a positive reflection.

Stay tuned because times are changing and changing swiftly

Rescue Bill's Effect on the Real Estate Market

We are still waiting to see what the trickle down effect will be of the $700 billion rescue bill that was passed and signed into law last Friday.  NAR (National Association of Realtors) president Dick Gaylord made a statement thanking individuals who voiced their support of the bill saying that without the passage of the bill consumers would be in a very dismal situation right now.  There was some debate in the real estate world as to whether it was a good thing to pass the bill or not but, the general consensus seemed to be in support of the bill even if it wasn’t truly perfected yet.  The truth was that the bill needed to be passed quickly in order to stop any further meltdown of the financial industry and its leaders; procrastination would have only allowed the tailspin to progress further. 

 

Gaylord went on to say that, “the needs of  Main Street (will be) placed front and center.”  The bill is anticipated to give the real estate market a needed boost of energy.  As Gary Keller, head of Keller Williams Realty stated, “The market should regain some confidence, and since markets are built mainly on confidence, that’s no small thing.  In fact it’s a huge thing and it’s imperative for the market to move forward.  But beyond that, we have to wait and see.”  Very true!  Business is still moving forward in my office as we play the waiting game to see what the bigger impact will be for the real estate world but, I’d have to agree with the experts the Rescue Bill has at least pointed us in the right direction. 

Texas Banks Buck the Trend

Everything’s bigger (and better) in Texas including the stability of our banks.  In a report released by advisory firm Sheshunoff & Co. Investment Banking, Texas banks outperformed most of the country during the first half of the year with additional data suggesting that Texas will do the same for the last half of the year as well.  The report credits Texas’s strong economy and inflow of new residents from other states in part, due to our stronger job economy. 

Banks in rural areas have also been able to keep their heads above water by making smart agricultural loans due to the high price of farm commodities.  Furthermore, Texas banks learned a few hard lessons twenty years ago when there was a near epidemic of bank closings.  The lessons about strict underwriting and credit valuations have stuck with many Texas banks which has put them well ahead of the curve in comparison with many other banks across the nation. 

700 Billion Bailout Part II