Feds Drop Rates

Well the big anticipated FED rate drop came and went. So what does it mean for the average home Buyer? Very little at this point. We did see the average interest rate drop by about 1/8th of a percent. Keep in mind the FED’s dropped the rate they lend to the banks 1/2 a percent. So why didn’t this get passed on to us? 2 things come to mind. The first is the FED only has limited effect on interest rates as they are controlled mostly by the bond market and secondly the rate drop gave big investors a chance to to reposition themselves and take profits.

Here in the Central Florida housing market we are seeing the same results with interest rates. A very small drop but a drop non the less. With pressure to continue dropping the prime rate we will see more attractive loan programs that are affordable to the average home buyer.