With this week’s rate cut by half a percent by the Federal Reserve, agents are hoping that sellers will finally get off the phone and loosen inventory to get the market going.
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Each week on The Download, Inman’s Christy Murdock takes a closer look at the week’s top stories to give you what you need to meet Monday head on. This week: Is this week’s half-percent rate cut from the Federal Reserve the improvement we’ve been waiting for to get sellers in the game?
Even in the best of times, real estate agents face uncertainty in every way, from market conditions, economic factors and personal well-being. The last year or two, however, has seen challenges piled on top of each other.
Among these challenges, perhaps the biggest impact on consumers and sellers has been the rise in interest rates as part of the Federal Reserve’s effort to combat hyperinflation.
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For too long, buyers and sellers have been in a holding pattern as agents and sellers tread water in the face of a low market and regulatory uncertainty. For retailers, high interest rates make it impossible to move up, requiring them to trade in their low pandemic-era interest rates. For consumers, high interest rates were just one financial challenge on top of tight inventory and sky-high home prices.
MORE: Existing home sales continue to slide as buyers bide their time:
Could the Federal Reserve’s much-anticipated rate hike this week cut the juice in the market and get buyers on both sides of the table ready to move?
After raising interest rates to their highest level in more than two decades to fight inflation, the Federal Reserve cut the federal funds rate by half a percentage point on Wednesday and signaled that rates could fall by 2 percent by the end of 2025.
The “dot plot,” which shows projections of future rate cuts, showed the Fed expects to cut rates by another half a percentage point by the end of this year, to between 4.25 percent and 4.50 percent, with another full percentage point cut likely on deck next year.
In announcing the cuts, Fed policymakers said they were optimistic that inflation was on a steady path to 2 percent — and that “the economic outlook is uncertain.”
EXTRA: That big Fed rate cut wasn’t a cure for housing: Fitch
Knowing your numbers and knowing how to act on the market-related indicators they provide can make the difference between boom and bust in your real estate business. Fortunately, this week we have economic experts, working and encouraging to ensure that you do everything right in the weeks and months ahead.
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