Home prices are still in freefall. And mortgage rates are near record lows. But even after the banks have been given more than half-a-trillion dollars in bailout funds, the Fed said Wednesday that credit conditions "remain extremely tight."
How low do mortgage rates have to go before the market has real stimulus?
"I'm looking for the buy-one, get-one-free deal," says Rick Sharga of RealtyTrac, a company that monitors the real estate industry.
Sharga says buyers are still afraid.
"And I think the banks have the same issue with lending," he says, "They're making it difficult for people to get loans unless they're Donald Trump."
"Everybody tells me how low interest rates are," says billionaire Donald Trump. "And then I say where do you get the money? And then they say there is no money available."
Trump, who has properties in 10 states, says even billionaires are having a hard time.
"Literally, if you have a building making $10 million a year, and you have a $2 million mortgage on that building, and it comes up for refinancing, you can't refinance it," Trump says. "The banks are not in business."
Atlanta's Fidelity Bank had cut back on loans.
"We were having to hold tight on lending because we did not want to run out of capital," says Jim Miller, chairman of Fidelity Southern.
But after getting $48 million in TARP money, Miller says they're lending again, just more carefully.
"You look twice to lend where you would only look once before," Miller says. "But we're obliged to lend. We're a bank."
But some banks are hoarding cash to protect themselves from mounting losses, Mason reports. That's what's behind renewed talk of the government buying up the banks' bad debts, so they can begin lending again.
By Anthony Mason