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The Interest Rate Cut and the Housing Market

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Photo by Ricardo Gomez, from Unsplash

On July 31st, the Federal Reserve cut the interest rate by a quarter point. While the impact of the cut may not be immediate, it should extend to the housing market.

With residential housing markets generally flat in many urban areas, some experts believe that the cut could be enough for prospective homeowners to finally make the jump into buying property. Further, there should be an uptick in refinancing.  Therefore, the cut will likely have a positive impact on the single-family home housing market.

Developers could also benefit. However, the impact will not likely be as pronounced because of rising material and labor costs.

While overall the cut is perceived as good news, some economists warn that the interest rate cut may actually dampen consumer confidence.  But, of course, there are those who believe the contrary and opine that the rate cut will head off a recession.

Larson, Keith. Here’s what a Fed rate cut would mean to the US housing market. (July 2019). Retrieved from  https://therealdeal.com/2019/07/31/heres-what-a-fed-reserve-rate-cut-would-mean-to-the-us-housing-market/

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