Mortgage rate cut the way to get the market back on track

Mortgage rates have come down to 5.5% for a 30 year fixed rate. Like I've said, the market topped out in June 2005--check the table, it shows this month in 2005 was the lowest mortgage rate--and for the last 31 months we have been in a correction. Now with rates dropping, the first time homebuyer will be able to afford to buy, which is the healthiest way for the market to get back on track. I think that this is a clear indication that we have bottomed.

Check out the homebuying ladder. If the first time homebuyer can't afford to buy, then the homeowner in the lowest price point has no one to sell to, and the entire ladder stalls. That is why it is so important for the first time homebuyer to be able to get onto the ladder.