How Will Yesterday’s Wall Street Meltdown Affect Plymouth County?
The failure of Lehman Brothers and the sale of Merrill Lynch, already called Black Monday by some pundits, led to the biggest drop on Wall Street since the terrorist attacks of September 11, 2001. The immediate result of yesterday’s economic news is the projected loss of capital available for commercial lending. Commercial sales in Plymouth County have been a source of encouragment amid an otherwise persistent downturn in the number of transactions being recorded at the Plymouth County Registry of Deeds.
The number of residential sales and in particular, the number of mortgages recorded in connection with the refinance of existing home loans has fallen significantly from previous years. As reported in our last few Monthly Register’s Reports, refinance activity is at an eight year low. The tightening credit market in response to the sub-prime loan fallout by national lenders, combined with a drop in the appraised values of these properties has made it difficult for homeowners to refinance.
Yesterday’s turmoil brought immediate calls in Washington for another economic stimulus package, belated calls for better regulation of the mortgage industry and a cry for the Federal Reserve Board, who meets today, to forget about inflation for a while and cut interest rates.
Cuts in interest rates now certainly begs the question, who has money to loan? It does however, clearly put our housing crisis and the economy on the front burner of the presidential campaigns between now and November.
