Even though the Fed has cut the interest rate by 3/4 of % point there is no sign of recovery in the housing market. It is expected that the housing market will suffer in 2008 and it will be slugging throughout the year. Merrill Lynch's report on real estate market forecasts around 15% drop in the median house price. The full story is available at Housing prices to free fall in 2008.

Fed's interest rate cut will definitely help some people avoid foreclosure because the expected hike in monthly mortgage payment will not come and with another rate cut in a couple of months it is very obvious that people will be able to keep their houses and number of foreclosures should decline. How much will it decline? That still needs to be seen in the coming months.

Lennar's CEO is not expecting the market condition to improve in 2008 and they only seem to decline. Housing sector is dirt cheap right now and it's a good value buy but I would rather wait for a couple of more months to see how the government's economic boosting package and interest rate cut helps the general public.