On Wednesday the Federal Reserve lowered interest rates for the first time since the Great Recession in 2008 to help stave off the possibility of an economic downturn. Our economy is in a much better place than it was in 2008. We have wage increases and our unemployment rate is the lowest it’s been in 50 years.
How does this change affect Real Estate?
Interest rates, which affect the cost of borrowing for credit cards and mortgages, are now set to hover between 2% and 2.25%. This is about a quarter percent drop in interest rate. By having a lower interest rate it means you can have more house for your dollar. You can spend the same amount on your mortgage as you did before but now more of your money is going to go towards your mortgage.
Mortgage interest rates haven’t lowered yet (Interest rates were just lowered last week) but you can possibly expect them to be lowered in the near future. If you’re looking for a home or an investment property, now is the time to start getting your ducks in a line so you can be ready to buy once these rates lower.
Mortgage rates are the lowest they have been since 2016. The average 30-year fixed rate is now about 3.93%, the lowest since November 2016, according to Bankrate. This is great news for new homeowners and those who are looking to refinance.
If you’d like more information on this rate cut and how it can help your real estate goals we be happy to help!