WLRN Public Media | By Tom Hudson
September 19, 2024
For the first time in more than four years, the Federal Reserve cut its key interest rate Wednesday.
The reduction in borrowing costs comes at a mixed time for South Florida real estate. Mortgage rates have been slowly moving down since April and the action this week by the Fed likely will continue to bring them down.
The Fed cut its benchmark interest rate by an unusually large half-point, a dramatic shift after more than two years of high rates that helped tame inflation but also made borrowing painfully expensive for American consumers. The central bank’s action lowered its key rate to roughly 4.8%, down from a two-decade high of 5.3%. It signals the Fed’s two-plus year fight against inflation is over.
The move is good news for buyers who can qualify for a mortgage. Buyers can borrow more money as rates fall. But it also will help support home prices, especially single family homes, which have continued to increase in price. Lower borrowing costs may encourage more buyers into the market competing for homes, pushing prices up.
