Much anticipated thought that there would be some reprieve for the struggling home owners after the Fed's rate cut doesn't hold any ground. It's true that recent rate cut has made it easy for banks to borrow cheap money from Fed and one another. But since these banks have been so bitterly bitten by the sub prime mess that they don't want to lend the money in the mortgage market. Instead, they want to buy high quality treasury bonds and other safer and higher yielding investment to fatten their profit and make their books look good.

It was hoped that after the stimulus package is in effect there would be some help for the home owners who are fighting to keep up with the increasing mortgage due to reset on their interest rates. For high cost area like San Francisco Bay area the conforming loan limit has been raised to $729K but still to get conformal rate (around 5.85 to 6%) one needs to put down 20% down payment. For a house cosing $700K, 20% would be $140K. Does normal medium class family has that kind of money to buy a house? So it seems that the stimulus package is nothing but a farce and there is not much that would be coming out of that. It seems that the Bush administration just bought some time and created some hype among public by donating $600 per person in some form of Charity. It doesn't seem to work anyway to stimulate US economy and slumping housing market.

Mortgage rate for the 30yrs and 15yrs have increases to 5.88% for the week ending April 3rd from 5.85% a week ago. Here is the full story: http://biz.yahoo.com/ap/080403/mortgage_rates.html

Struggling home owners need loan in order to refinance and avoid foreclosures. That's not happening and that's a bad news for already gloomy housing market.