The Fed’s first rate cut in over four years slightly lowered mortgage rates, sparking debate on whether it will boost housing demand or ease home prices.
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The Fed delivered its first interest rate cut in more than 4 years in the last fed meeting. Mortgage rates changed slightly but in a way that many did not expect with the 30-year fixed weekly rate moving from 6.2% to 6.1% and the daily rate rising by .02%.
When asked at the meeting how the housing market will be affected by interest rates dropping, Powell stated that it will increase the selling in the market however the buying will also increase. This will be a very hard prediction to make on whether the housing market will create a higher demand for homes causing prices to rise or whether supply will be in support of this demand causing little to potentially an ease in home prices. Many economists think lower rates are coming which will increase the demand for purchasing homes while also allowing sellers to feel more comfortable putting their home up for sale when also looking to purchase and enter into a new mortgage.
