By Alon Gibely Jex
This past Wednesday, July 31st, the Federal Reserve cut interest rates by 25 basis points (one quarter of a percentage point), this was the first cut since the economic recession in 2008. In general this move was seen as a move to stave off a possible economic slow down in the near future, as for the present, there are additional benefits for those looking to take a loan, specifically a mortgage.
One would expect a drop in the interest rates for a fixed rate 30-year mortgage, as the two, a drop in Federal interest rates and a drop in mortgage interest rates, goes hand-in hand. While currently the average mortgage interest rate is the lowest it’s been since November 2016, one could expect mortgage rates to drop even lower.
As potential buyer, this is great news since that means an even more competitive mortgage rate, but also as a seller this can be good news since that means that a buyer may be more eager to pull the trigger on a property to take advantage of the low rates.
That being said, everything depends on pricing, it doesn’t matter how low interest rates are, if a property is overpriced, we can expect it to stay on the market for longer than three or four months, and, if that property is overpriced AND expensive (in Manhattan think mid to high seven-figures or more), then both seller and agent are in for a long wait.