The Fed lowered short-term rates for the second time in two months yesterday in an attempt to stop housing market woes from completely dragging down the rest of the economy. The cut came after a Case-Shiller survey showed that prices of homes in 20 major metropolitan areas fell 4.4 percent for the 12 months through August—the biggest drop since the survey began in 2001. And the New York City area wasn’t exempt from the trend: Home prices were down 3.8 percent for the year that ended in August. In a statement accompanying yesterday’s rate cut, officials said the housing downturn is likely to slow the economy, and most experts think the worst is still to come. So now the same old questions remain: How much worse can the national housing market possibly get, and are the heretofore unscathed upper ends of the Manhattan and Brooklyn markets finally going to feel the heat?
Home Prices Are Down, and So Is Confidence [NY Times]
Fed Lowers Key Interest Rate by a Quarter Point [NY Times]