LEE COUNTY, Fla. — The Federal Reserve cut interest rates by .5%. We have not seen this substantial of a cut since 2020. It's the moment many home buyers have been waiting for.
Tim Hart is a loan officer with VanDyk Mortgage.
"Any times those [interest] rates go down, it gives homeowners a lot more options," he said.
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He explains it's likely to see more people refinancing their homes under a lower interest rate than when they purchased, lowering their monthly bill.
For people who are looking to buy, he says, their purchasing power increases.
"Now they can afford more so they can go from $300,000 to maybe qualifying for $350,000," he said when referring to the cost of a home.
Victor Claar, a professor of economics at FGCU says this decision works to stabilize the money market.
"The Fed raises interest rates like they have been when they're fearful of inflation and they cut when they're afraid of recession. They don't want to crash into either of these bad things," Claar said.
He says we may see more people finding the ability to pay down credit cards as well.
"For each point the interest-rate goes down from what consumers are paying now, it can be a substantial saving in their monthly payment," Bobby Mahan, a broker and the owner of Century 21 Selling Paradise said," noting thousands of dollars could be saved each year for homeowners.
Even with the lower rates, the price of homes is still out of reach for many.
Cameron Brewer is a Cape Coral resident.
"How much we are being paid for our labor isn't going up," he said.
He's hopeful the insurance cuts can change people's financial situations.
"I think it's a good thing, for the hard working people who are struggling and are not able to get on their feet," Brewer said.
According to rocket mortgage the average home in Cape Coral dropped in price by 2.3% in the last year.
Mortgage rates are currently at their lowest rate since February 2023. The average interest rate for a 30-year mortgage is 6.2%, according to Freddie Mac.
In addition to approving the half-percentage-point cut on Wednesday, Fed policymakers projected the benchmark interest rate would fall by another half of a percentage point by the end of this year, a full percentage point next year, and half of a percentage point in 2026.
