The Federal Reserve stood firm on interest rates for the second month in a row, keeping the short-term Federal Funds Rate at 5.25 percent. Not really a surprise!

After hiking rates for 17 straight monthly increases dating back to June 2004, the Fed’s abstention from further increases in August paid some positive dividends in the real estate industry.

The most evident, declining mortgage rates practically on a weekly basis — on both fixed and adjustable products — and an increase in refinance applications versus home purchase applications, according to the latest weekly report from the Mortgage Bankers Association showing refinance applications increasing more than 3 percent just in the past week, with refinance activity just for ARMs alone increasing 1.5 percent for the week.

The rationale for the Committee’s wait and see decision this time — moderation of economic growth punctuated by a cooling off of the housing market, a driving force of the nation’s economic engine. And real estate professionals around the country are feeling it. Realtors are citing declining sales volume, longer marketing time, a lower rate of price appreciation and increased foreclosure levels. The confidence level of home builders in the nation’s economy has been declining as well.

Real estate professionals are looking for a soft landing at the end of this roller coaster ride, and the Fed is hoping for a soft landing. If the soft landing scenario plays out, then the biggest concern for homeowners will be if they can afford a jacked up mortgage payment once rates on their “exotic” adjustable loans are reset in the next year.

And that will be a good time for members of RealtyTrac to step in and help out a homeowner in distress before the situation goes from bad to worse and becomes a black mark on their credit history.  It will be an opportune time for investors, real estate agents and potential homebuyers looking to RealtyTrac in order to locate bargain properties nationwide.