Zero Interest Won't Help Housing Crisis

Mortgage rates have dropped to an unprecedented low , but this will do little to aid the troubled housing market, according to Doug McIntyre. For starters, mortgage rates don't affect buyers' credit scores or ability to pay down payments, two key issues in the housing market, said McIntyre: The Fed has effectively taken rates to zero, and banks have not reacted by lending. They are still concerned that consumer credit defaults, LBO failures, and commercial real estate values could cause large write-offs as the year wears on. Interest rates at zero are only attractive if the risk of borrowing is at a traditional level. And, for people looking at homes, it is not. Click here for the full story. (link)