What the Fed’s Rate Cut Means for Home Buyers

You may have heard that the Federal Reserve recently lowered interest rates by a quarter of a percent in the first rate cut this year. This brought interest rates down to 4% to 4.25%. And they hinted that two more cuts could be on the way this year. So, what does this mean if you’re thinking about buying a home?

Lower Rates = Lower Payments

It’s pretty simple. When the Fed cuts rates, borrowing gets cheaper. That usually translates into lower mortgage rates, which can mean smaller monthly payments or more buying power for you, the person reading this who wants to buy a house.

Why Now Might Be the Moment

Home prices have started to not only stall, but actually dip a bit in Los Angeles, which may seem unheard of to anyone who has spent a night or two wide-eyed and scanning Redfin. With rates dipping, it could be the perfect one-two punch, offering the rare window to act in a tough housing market. Waiting too long might mean facing more competition if demand heats up again.

The Bottom Line

If you’ve been on the fence about buying, this rate cut is good news. You could save money and get more house for your budget.

Have questions or ready to start your home search? Reach out to Erik Jimenez with Compass. I’d love to help you take the first step toward homeownership.

Erik Jimenez

DRE #02182362

Compass