ATLANTA — On Wednesday, the U.S. Federal Reserve cut interest rates by a half-percentage point, the first time it’s made an interest rate cut in four years.
The Fed said it’s pleased inflation is getting closer to its goal of 2%. Right now, the rate is around 5.3%, with the cut reducing it to about 4.8%.
Economists say the cuts will mean credit card rates, auto loans and mortgage rates will fall.
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Ted Jenkin, president of Exit Stage Left Advisors, told Channel 2′s Justin Farmer that this could be helpful for the Atlanta housing market.
“I think we’re going to see it over the next 30 days,” Jenkin said. “People who have variable rate credit card debt, student loan debt, home equity lines of credit, auto loans, are all gonna see a decrease, which may help them put a few extra dollars back in their wallet. Most notably, Atlantans could experience the ability to have mortgages soon in the 5% range.”
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Jenkin said that would give them the ability to buy homes that would otherwise be “just out of reach of affordability” in the Atlanta market.
He also said that for homeowners who bought during the pandemic while rates were low, the drop in rates could encourage them to sell and move their equity to another, potentially larger property, if mortgage rates drop to around 5%.
If that happens, Jenkin said it would help with the available housing inventory, which would provide encouragement to buy for first-time homeowners.
Economists say they’re in consensus that the Fed will keep cutting the rate, so long as inflation remains on a downward trend over the next year.
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