Federal Rate Decision: How it affects local home buyers & sellers

With the Federal Reserve’s upcoming decision tomorrow at 2 p.m., many expect a cut to its benchmark interest rate for the first time in nine months. This move could have a big impact on both buyers and sellers in our local housing market.

Home Buyers

For potential homebuyers, lower rates may feel like the perfect opportunity to finally start looking for that new home. Mortgage rates have already been trending downward since July, and with this expected cut, we could see the lowest levels since October 2024.

Comparing 15-year and 30-year fixed-rate mortgages shows just how much difference these changes can make in affordability. The opportunity for buyers could be now, but interest rates shouldn’t be your only deciding factor.

When considering a home purchase, it’s important to also look at your local area for housing inventory, average home prices, and competition levels. A market with very few listings can still drive prices higher, even if borrowing costs are lower.

Lower mortgage rates don’t necessarily mean cheaper homes. History shows that when rates fall, demand usually rises. More buyers entering the market can create added competition, often pushing home prices up.

Homeowners & Sellers

For current homeowners thinking about selling, this shift has its own implications. The recent run of record-high home values may begin to slow. If you’re considering listing your home, here are three key things to keep in mind:

1)      Adjust Expectations - Home prices may not keep climbing at the same pace as before. Be prepared for offers that reflect a balancing market.

2)      Understand Your Local Market - Pay attention to what’s happening in your neighborhood: how long homes are staying on the market, whether sellers are making modifications, and what types of homes are moving quickly.

 3)      Keep an Eye on the Stock Market - Inclusive economic shifts can affect buyer confidence. A strong stock market can fuel demand, while volatility can make buyers more cautious.

Bottom Line

Whether you’re buying or selling, the Federal Reserve’s decision could create both opportunities and challenges. Staying informed — and making decisions based on both national trends and local conditions — will help you navigate the market with confidence.