Market Tips August 2, 2019

0.25% Cut to FED Funds Rate Effect on You

The FED just announced their plan to cut the Fed Funds Rate by 0.25%, a cut in the FED Funds Rate has not occurred since the financial crisis over a decade ago. How does this decreased funds rate affect you?

  • Cheaper Home Builds
    • This decrease in the Fed Funds Rate will make building a home cheaper. Labor and material cost associated with building a home are on the rise and this Funds Rate cut will help combat those increased costs.
  • More Houses on the Market
    • The inventory of listings will increase, because it will be cheaper to build a home with this Funds Rate Cut.
  • More Stability to the Housing Market
    • This cut in the FED Funds Rate will add more stability to the US housing market. The economy of the housing market continues to strengthen, and this cut will encourage even more growth.
  • Possible Refinancing on your Loan
    • The average 30-year fixed rate (3.93%) is currently the lowest it has been since 2016, so if you have bought a home in the past few years I suggest looking into refinancing your loan.

While a cut of 0.25% may seem small the implications associated with it are not. Cost of building a home will decrease, increased housing inventory, increased stability in the housing market, and the opportunity to save money by refinancing your loan.

Howley, Kathleen. “Fed Cuts Rate, Citing Global Developments.” HousingWire.com, HousingWire, 31 July 2019, www.housingwire.com/articles/49739-fed-cuts-rate-citing-global-developments.