The Fed rate cut(s) probably will not affect the long-term rates, but could have an indirect effect on the LIBOR rate upon which many of the ARM loans are based.  In any case, it will lower the prime rate, making HEOLCs more attractive.

The long-term rates are still relatively low.  They have been hovering between 6% and 7% for some time now.  Borrowers with good credit should be able to refinance their ARMs or buy homes suitable for their incomes with the little-changed fixed rates. 

The succession of Fed rate increases over the past few years have had little to no effect on the long-term rates and cuts will affect them no more.  The general economy will have a greater affect.  When investment money gravitates toward safe long-term treasury bonds, rates will go down.  When money leaves the bond market for stocks, long-term interest rates should get a boost. 

The only disagreement that I have with Robert's post is that investors in mortgage-backed securities will not tolerate low rates.  Seems to me they have been all too eager to be in the action, even with the low rates of the past few years.  What they will not tolerate, at least in the short-term, is low rates combined with high-risk.  I think this will be only a temporary phenom as memories are short when money is dangled.