Home buyers, sellers and realtors are celebrating on the heels of the Federal Reserve's decision Wednesday to lower the lending rate a full half-point.
Mortgage rates could start dropping a bit in the next few weeks, which is expected to impact the real estate market.
Some experts believe a half-percent drop by the Fed will grab the attention of owners sitting on the fence worried about whether they can afford to buy a new home if they sell the one they are living in now.
The average 30-year fixed mortgage rate is now below 7% and expected to keep dropping slowly.
"We know that sellers are watching what's happening with interest rates because if they sell their home today, they're going to be buying a home tomorrow," said David Stark with Bay East Association of Reatlors.
Stark and others see the move by the Fed as a positive for buyers, sellers, and the economy as a whole with more inventory expected to hit the market.
"There's all kinds of home improvements people do. They're fixing their homes up to sell, or when someone moves in and they want to fix it up," Stark said. "There's all kinds of economic activity that's triggered when someone buys or sells a home."
Stark said it could also help boost the fall home sales, which normally lag a bit after lots of activity in the summer. He is crossing his fingers that the Fed will make another move soon.
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"We're hopeful that the policy makers in Washington and other places realize just how important home ownership and real estate transactions are to the overall economy," Stark said.
The interest rates are already forecasted to drop to the high 5% range next year and mid 5% by 2026, according to The Mortgage Bankers Association and others, but Stark said if the Fed makes even more cuts, we could see those lower mortgage rates even sooner.
