The Federal Reserve Issues Emergency Rate Cut, Impacting the Real Estate Market

Anyone who has paid attention to the news recently has likely seen that many of the world’s economic markets are in a state of turmoil.

The Federal Reserve Issues Emergency Rate Cut, Impacting the Real Estate Market

Anyone who has paid attention to the news recently has likely seen that many of the world’s economic markets are in a state of turmoil. Recently, the United States’ Federal Reserve decided to take action to slow the crash of its own markets. They took an emergency step and issued a rate cut. They slashed interest rates by a whopping half of a percentage point. This was made in an attempt to limit the industrial, financial, and economic fallout from the global healthcare crisis that is taking shape.

The world has not seen a cut like this issued from a central bank since late 2008. During this time, the cut was in response to the collapse of the global firm Lehman Brothers. The Federal Reserve decided to move quickly this time in an effort to prevent the stock market from plunging further, leading to a major disruption in every economy. As the stock market continues to drop, many people are concerned that a recession is coming. You might be wondering how to sell your home.

The drop issued in interest rates is going to have an impact in numerous sectors of the economy. This includes the real estate market. When the Federal Reserve lowers its interest rates, the interest rates on loans provided by banks start to drop as well. This means that people looking to buy a house or invest in the real estate market will have access to mortgages at reduced rates. While this market was already a great time to buy a house, this cut in interest rates only makes the market even better. Therefore, many people are already rushing to see if they can capitalize on the interest rate drop and find the best realtors.

The cut in interest rates did lead to a brief rally for the stock market; however, this rally didn’t last long. The market rebounded before starting to drop again. The bond rates are at an all-time low yet the stock market is still a major point of concern for people in all areas of the economy. Many United States companies are scrambling to protect their supply chains because China has closed many of their factories in response to the global crisis. There is a broader worry that businesses might even prevent their employees from coming to work due to health risks. In the meantime, the drop in interest rates from the Federal Reserve means that interest rates on major loans, including mortgages and realtor commissions, are likely going to remain low.

Updated Date: 30 July 2020, 16:15

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