Real estate agent Kirsten Jordan discusses the impact of the Fed’s rate decision on the industry and analyzes the presidential candidates’ housing proposals.
The Federal Reserve’s 50 basis point cut has ignited market chatter among America’s real estate leaders who think this could be the start of a buying and selling frenzy.
“Everybody’s happy. It doesn’t matter what type of business they are in,” Shoma Group founder and CEO Mousad Shojaee told Fox News Digital in reaction to the decision on Thursday.
“The atmosphere and attitude since yesterday has been changed completely,” he continued. “Everybody, they see a smile on their faces, and you have the energy. It’s like they have all their lights on because it’s been four years.”
Compass Regional Vice President Jeffrey Polashuk also voiced support for the cut.
“I believe that a lot of the rate cuts were already baked into finance pricing, but the positive news of this change will ensure that people won’t delay their search any longer. This rate cut paired with the election season ending in the next two months will be the trigger that will propel people back into the market,” he told Fox News Digital.
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Investors and market watchers sat on the edge of their seats Wednesday afternoon, as the Fed announced a long-awaited interest rate cut, lowering the benchmark rate by 50 basis points from what was the highest level in 23 years as the central bank eased borrowing costs following progress in the fight against inflation.
U.S. mortgage rates declined last week to the lowest level since September 2022 in anticipation of Federal Reserve interest-rate cuts, stoking an influx of applications for home purchases and refinancing. (Getty Images)
The Fed’s first interest rate cut since March 2020 lowers the benchmark federal funds rate to a range of 4.75% to 5%.
Federal Reserve Chair Jerome Powell said in a press conference following the announcement that the central bank is focused on “achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people.”
For real estate brokers and their agents, the Fed’s half-of-a-percentage cut is likely to bring more buyers and sellers to market, potentially opening the inventory floodgates and momentum for price competition.
“We know that the mortgage rate is not connected to the Fed rate, but obviously has a huge impact,” Shojaee said. “Many of the mortgage lenders now see the same mortgage dropping to 5.9% in 45 days. And that’s huge. So we are going back to kind of a normality… it created consumer confidence, which is very important. And then, obviously, the interest rate goes down, then there is demand, and it becomes a supply-demand issue as the prices are going to go up again.”
QI Research CEO and chief strategist Danielle DiMartino Booth reacts to the Federal Reserve cutting interest rates by half a percentage point on ‘Making Money.’
“Our agent team is extremely excited as this is positive news that they can share with their clientele to get buyers reengaged for the search,” Polashuk added. “With the South Florida market being a place new residents have been coming down to for work opportunities and the area continues to boom, this opportunity helps the folks who have been renting to have the confidence to put down solid roots and make Florida their home.”
Moving forward, Powell emphasized that future rate decisions will happen on a meeting-by-meeting basis and depend on economic data, and said, “we can go quicker if that’s appropriate, we can go slower if that’s appropriate, we can pause if that’s appropriate. That’s what we’re contemplating.”
The Federal Reserve lowered its benchmark interest rate by a half percentage point Wednesday, in an aggressive start to a policy shift aimed at bolstering the U.S. labor market. | Getty Images
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