If the Fed cuts interest rates, it could be a win for the housing market

August 5, 2024

Deja Parker,

DELMARVA – Rumors are circulating that the Fed can lower interest rates as soon as September.

For those kicked out of the housing market, this might be their big break. “We don’t know what’s going to happen with the market, with prices, with interest rates,” said Dave Schmidt.

Homebuyer Dave Schmidt says even if the Fed lowers interest rates, there’s still so much uncertainty. “They’re talking about, you know, 50 basis points, which is half a percent as a possible reduction in September when they meet. They did not reduce rates at their August meeting, but they have hinted that they’ll reduce rates in September,” said Bill Chambers, CEO of the Salisbury Chamber of Commerce.

And if they do, that makes for a good opportunity to get in on the housing market. “It would allow some of these people to get into the market that might have been pushed out previously. It would just be a matter of how low the interest rates go, you know, how much the interest rates go down. Obviously, the lower the more affordable it becomes” said Schmidt.

However, even if the Fed does follow through by cutting interest rates, some people may find it harder to get their new set of keys. “It’s just going to continue to get harder for median income, average household to get their first house. I think that’s just going to continue to be an issue,” said Schmidt.

Salisbury Chamber of Commerce CEO Bill Chambers says we might not know when the change is coming, but when it does things are looking up. “If we get a couple of small interest rate cuts between now and the first of the year. It’ll be good for consumers. It’ll be good for holiday shopping, it’ll be good for home ownership, as well as hopefully spur builders to get back in the business of building new housing inventory.”

There’s also a lack of available affordable housing because builders are not building first-time home buyers homes as they once were. Fed officials will meet from September 17th through the 18th. Dave says the housing market prices here also haven’t softened too much.