On August 18 the Federal Reserve Board lowered the Federal Funds Rate to 4.75 percent, which was a half percent drop. This is the first rate drop in over four years. Following the Federal Rate drop many large banks dropped the Prime rate to 7.75 percent. This rate is the rate that banks charge consumers.

This rate drop could be good for homeowners. With the rate drop many types of loan payment will go down. Home Equity Lines of Credit is a big one for people with homes. Many people think this will also help with buyer confidence, which should help ease the housing market slump. People will have more money to spend, because they are paying less in interest.

The lowering of the interest rates plus the lower home prices make this market ideal for home buyers.