And the rates keep dropping

As the Fed continues to slash interest rates, mortgage rates should come down too.

WASHINGTON - Federal Reserve Chairman Ben Bernanke pledged Thursday to slash interest rates yet again to prevent housing and credit problems from plunging the country into a recession.

The Fed chief made clear the central bank was prepared to act aggressively to rescue a weakening economy. "We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks," he said.
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Some economists believe the Fed will slice its key interest rate by a bold half percentage point when the Fed meets next on Jan. 29 and 30. Others, however, think the Fed will go with a more modest one-quarter percentage point reduction, given concerns that high energy prices could spark inflation.
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In light of such risks to the economy's growth, "additional policy easing may well be necessary," said Bernanke.

That's more good news for anyone in the market to buy a home, especially if you're a first time home buyer who doesn't have to worry about trying to sell a home in a depressed housing market.

And if you don't think the housing sector impacts (or reflects, depending on the angle you're taking) the overall economy, think again.

The housing slump — aggravated by harder-to-get credit — has weighed heavily on national economic activity. Foreclosures have soared to record highs and financial companies have wracked up multibillion losses because of bad mortgage investments. The problems, which are expected to persist well into next year, have unnerved Wall Street.

I don't know how long the market and the interest rates will continue to fall together, but I don't think I want to wait too much longer to find out.