I wanted to give my take on this. I get asked more than once will mortgage rates go up or down when the feds meets. The big date right now is 18th Sep, 2007. The rate everyone is talking about is the rate that the Fed charges banks on money they loan overnight. If you remember, in ‘04 and early ‘05 when the fed would drop rates, mortgage rates would go up for a week or so and then go down. I think then it had to do with good employment reports and consumer spending.

My opinion on it this time is a lot different, the employment report last week was not good, everyone is screaming, and the new housing starts are very slow throughout most of the country. This affects a lot more people than we think about. The people in the factories making all the goods for homes down to pictures that go on the wall and the goods to clean them with, the surveyors, people who put in streets, construction workers, the sales and advertising people. A good friend of mine told me today that the word on the street, and I am sure he meant Wall not Hay, was that there was a 100% chance of a 1/4% drop to an 80% chance of 1/2% drop. I think we will see rates drop a little to try to stimulate things. I think we are still fine it will just make it that much better for us.