Interest Rate Cuts may be a 2 edged sword in the fact that people go out and purchase more during those times when the rate is lower; but they still have to pay off the debt. If they don't pay off the debt, the interest keeps accumulating and could damage they're credit in the long term. So even though interest rate cuts are welcomed, they may not be to the best benefit in this arena.
We, as realtors, try our best to get people credit approved to purchase a home all the while we're competing with the credit cards. Don't get me wrong, a few credit cards are needed incidentally to improve that credit so people can purchase a home. Home equity loans are another good one when the market is on the upswing as people can absorb their debt in the home at usually a little better rate. But if you're in a downturn market, converting a home equity line to cash upon the sale of a home may be not what the doctor ordered. So while this will be a short term remedy and maybe help people out after Christmas, it could hurt housing sales more than it helps as consumers increase their debt load.