The Federal Reserve decided to cut interest rates for the first time in over a decade.
Here's exactly what that means for homeowners.
- Mortgage rates are lower, so if you bought a home within the last few years, refinancing at a lower rate could help (ex. A .5% lower rate could save $125 a month)
- Adjustable rate-mortgages interest rates will decrease. If you were one of the many who used an ARM program rather than a fixed rate, you will finally feel some relief.
- It'll be cheaper to borrow money from a home equity line, and your monthly payments will decrease
But is this good news for both home buyers and sellers?
With interest rates back to near-historic lows, our Founder Alex Doubet believes the cut will benefit both sides of the real estate market.
“In theory, the rate cut is good news for both buyers and sellers.For the buyers, lower interest rates will allow them to buy more home for the same or similar monthly rates. For the sellers, the cut should add more buyers to the market. The increase in buying power will allow sellers to maximize their net proceeds and attract more interest in their property. Meaning, sellers will hopefully see more competitive offers and have the upper hand when negotiating.”
If you're in the market for a new home, these lower rates will offer some exciting opportunities for buyers.
Have you always dreamed about having a pool or one extra bathroom? Now might be the right time to consider houses that weren't within your price range prior to the fed rate cuts.
One of our mortgage experts, Tyler Salmon, translates the new cuts for the every day home buyer, stating that "Lower rates help you buy more home. Buyers can now bump up their price range and unlock a new tier of homes during their home search! This ultimately gives the consumer more choices, which is great news especially in cities with tougher real estate markets".
See how the Fed rate cuts will impact the rest of your finances here, including your credit cards, student loans, and car payments.