Input Stories

This week’s historic interest rate cut by the Federal Reserve is likely to help more Americans buy homes (The Washington Post, subscription).

What’s going on: After the central bank reduced its benchmark rate by half a percentage point Wednesday, real estate brokers’ phones started ringing.

• “Sidelined homebuyers are dusting off mortgage preapprovals and lining up homes to tour. Others, who bought in the past year, are asking when they should refinance.”
• Though mortgage rates are not directly in the Fed’s control, they are influenced by the bank’s actions—and the housing market is among “the most interest-rate-sensitive parts of the economy.”

Why it’s important: Rates for a 30-year fixed mortgage have dropped by an entire percentage point since May, as rumors of an impending rate decrease swirled—and they’ll probably fall further now that even more cuts are expected.

• “[S]omeone with a $2,000 monthly mortgage budget can now afford a house that costs about $50,000 more, according to Lawrence Yun, chief economist at the National Association of Realtors.”

What to expect: Sales of existing homes dropped by more than anticipated in August ( Reuters, subscription), but those numbers are likely to tick back up for September.

• Real estate agents “are starting to see houses rack up multiple offers again,” according to the Post.