In an attempt to reduce the possibility of a recession and ease market uncertainty caused by the coronavirus pandemic, the Fed recently cut rates to 0 – 0.25%. Homeowners and buyers alike wondered whether that meant it was time to refinance or buy a home.
Many people tend to think that a fed rate cut will lead to lower mortgage rates. And while that’s the case sometimes, it isn’t necessarily the case right now. Because mortgage rates had previously dropped to a low of 3.29%, banks are currently processing a backlog of requests. This gives them more leeway when it comes to rates and allows them to charge some borrowers more.
If you’re concerned that the country’s current economic state is close to that of the 2008 recession, it’s important to note that the housing market is on much better footing now. Even if the country enters into a recession, there is no subprime lending and there is less supply of available homes. The real estate market is poised to weather the storm.
To learn more, see what Lawrence Yun, chief economist at the National Association of Realtors®, had to say.
Interested in buying or selling a home? Let’s talk!