The Fed Cut Interest Rates – What That Means for Those That Want to Move

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Katherine McEntire
By Katherine McEntire
Oct 14, 2024
Icon Time To Read2 min read

A 12-year multi-media reporter, Katie tests moving services and home tech. A first-time homeowner, her work appears in AARP, Forbes, and SafeWise.

Good news for anyone waiting to take out a home or car loan. After 14 months of intense inflation, the job market and economy have stabilized enough for The Federal Reserve to cut the interest rate by half a point.

Though prices for gas, groceries, and other essentials may remain high, interest rates to a range of 4.75% to 5% from a previous record high limt of around 5.5%, leading many economic experts suggesting an end (or at least a slowing) to inflation.

Couple dancing around moving boxes

Image: SHVETS Production, Pexels

What this means for you

Half a point may not sound like a lot, but this drop is the first and largest cut to the interest rate since March 2020. If you've been considering buying, selling, or refinancing a home, now's the time to start planning.

Generally, lower interest rates are a reflection of a stable economy. When jobs, debt, and inflation level out, lenders feel more comfortable loaning money at a lower rate to more people. This is good news for anyone looking to refinance their home or take out a home loan on a new place. However, it can mean slower growth for high-yield savings accounts, certificate or deposit accounts, and money market funds. 

It's unlikely that this cut means we'll return to the ultra-low interest rates we saw in 2021, the financial forecast is looking good for anyone who wants to take out a home or car loan or refinance an existing one. 

Financial experts predict another half-point drop by the end of 2024 along with several more cuts through 2025 to 2026. This means lower mortgage rates and easier borrowing overall, making September 2024 a time to start saving up for when the interest rates drop further. 

You may need to wait to get the better interest rates in the future, but economists suggest this drop could be the beginning of lower mortgages and more affordable borrowing. 

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Sources

  1. The Board of Governors of The Federal Reserve, "Federal Reserve issues FOMC Statement," September 18, 2024. Accessed September 24, 2024.
  2. Forbes, "Fed Cuts Interest Rates for First in 4 Years: Here's What It Means For You," September 18, 2024. Accessed September 24, 2024.  
  3. AP News, "Federal Reserve signals end to inflation fight with a sizeable half-point cut," September 18, 2024. Accessed September 24, 2024.
  4. Investopedia, "How Federal Reserve Interest Rate Cuts Affect Customers," September 24, 2024. Accessed September 24, 2024. 
Katherine McEntire
Written by
Katherine McEntire
Katie is a multi-media journalist who has worked with publications like AARP, TechGuySmartBuy, Forbes, Healthy Moms, and Digital Care. She has a Bachelor’s degree in Technical Writing from Austin Peay State University in Clarksville, Tennessee. She’s held previous writing positions at Overstock.com and Top Ten Reviews, and she’s the YouTube personality and expert for SafeWise.