Fed rate cut brings relief to Las Cruces Homebuyers

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“I'm waiting for rates to come down.” 

The highly anticipated rate cut from the Federal Reserve is finally here. At their Sept. 18 meeting, the fed cut their interest rates by a half a point, exceeding expectations from economists and financial analysts.

The fed's decision cuts rates to about 4.9 percent basis points, which is down from a two-decade high – showing signs of a stronger economy and cooling inflation. So, what does this mean for buyers and sellers? 

Mortgages, which have already hit a 19-month low, will likely see even larger drops as the fed has signaled the possibility of another half-point cut by the end of 2024. 

Job reports, inflation and the upcoming election will all affect rates from now until 2025. A large majority of borrowers already have rates at an average of 5 percent, so you may not see as many refinances until rates fall further below a 4.4 percent benchmark. 

Mortgage rates will continue to fall and many borrowers have not seen rates below 6 percent since September 2022. Housing experts believe buyer activity will surge if rates continue to fall further below 6 percent, giving much-needed relief to those carrying a high interest rate while also pushing some first-time borrowers to apply for a mortgage. 

Now is the time to talk to a lender, as rates will remain competitive. Look for point buydown incentives that may further lower your monthly payment. Las Cruces has some of the most talented lenders and real estate professionals ready to get started working for you. If you are a seller, expect more activity in your neighborhoods than usual at this time of year thanks to this news in rates.  It's a great time to be a Las Cruces homeowner. 

Steve Montanez is a real estate broker and realtor, and a regular contributor to the Las Cruces Bulletin commenting on real estate and the housing market.

Opinion, interest rates, Steve Montanez

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