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FED Slashes Interest Rates
August 22nd, 2019 | Posted in Real Estate News
The big headlines this month are all buzzing with news of interest rate cuts and how these will affect the economy. Rightly so, last week the Federal Reserve decided to lower short term interest rates after a long period of tightening, dropping its target rate to a range of 2-2.25%. The cuts were implemented as a precautionary move meant to help the economy weather uncertainty against downside risks from weak global growth and trade tensions.
But, How do interest rate cuts affect the Housing Market?
In short, it’s great news for the housing market and here’s why:
1. Boosts Homebuyer’s confidence
Lower interest rates helps buyers at a time when rents continue to rise in NYC and across the country as it makes buying a home a better value proposition than renting.
2. Deals are now more profitable
Borrowing costs are now significantly cheaper especially for commercial developers who will now find it easier to finance their projects
3. Take advantage of current Mortgage Rates
Would-be homebuyers interested in a fixed-rate mortgage or those who want to refinance should take advantage of today’s low interest rates. Today’s rates are some two percentage points below the historical average, so waiting for even lower rates can mean missing an opportunity-in-waiting.
In a market like NYC, where rent prices are consistently increasing, a significant cut in interest rates should be the signal you were waiting for. Not only do market conditions currently favor investing and borrowing but the current inventory of 8,000+ listings gives you a multitude of homes to choose from.