Fed Finally Lowers Interest Rates

First of Many Rate Cuts

The Federal Reserve cut interest rates for the first time since 2020. The decision was made to begin the cutting cycle, citing the fact that inflation is returning towards acceptable levels. The Fed Funds rate was cut by half a percentage point. Two more cuts are expected in 2024 after the November and December Fed meeting. Members of the Fed also indicate more cuts into 2025.

What was the effect on homebuyers?

Mortgage rates have been decreasing in anticipation of this news. Homebuyers should expect rates to gradually improve over the next year as the Fed eases back into more normal levels seen in this millennium. The housing market stayed resilient despite the previously seen high interest rates. As rates continue to fall more homebuyers will likely enter the market. This can lead to more competition, higher home prices, and more difficulty getting an offer accepted. A crash in home prices is highly unlikely now. Purchasing before additional rate cuts will likely lead to lower purchase prices and more negotiating ability for buyers. Homeowners can always take advantage of lower rates through a refinance as additional rate cuts happen in the future.

Homeowners Looking to Refinance

Many have heard the phrase “Date the rate, marry the house”. This is proving true to those that bought when rates were far higher than current levels. For those who bought during October and November of 2023 there is already a huge benefit to refinancing. Checking into a refinance is quick and easy. It is important to understand the transaction fees when refinancing. A good lender will put together an option that is best for a long term plan allowing for future refinances without incurring un-necessary costs when refinancing today.