The Federal Open Market Committee announced that they have again lowered the Federal Funds Rate! 

How does this rate cut impact home buyers and owners? 

Even though the Federal Funds Rate does not directly impact mortgages, rates are historically low! Home buyers – or home owners with specific needs and circumstances – could benefit from today’s great rates by: 
  • Buying a new home with the increased purchasing power that comes with lower rates.
  • Refinancing to eliminate mortgage insurance or to get a lower rate. 
  • Consolidating debt*.
  • Leveraging home equity to fund home renovations, educational costs, or other major expenses. 
What does the Fed rate have to do with the housing market and economy? 
  • The Fed sets rates with a goal of creating an economic environment that promotes maximum employment and price stability.
  • Mortgage rates are hard to predict and are more closely tied to mortgage-backed securities, but the Fed rate can impact adjustable rate mortgages and home equity lines of credit.
  • Short-term debt (like credit cards) typically see an impact when the Fed makes rate adjustments.