August 13, 2019
Fed Drops Interest Rates for the First Time Since 2008
Do you remember watching Iron Man in theaters when it was released back in 2008? If so, you probably enjoyed The Avengers: EndGame that hit box-offices this past April. Both 2008 and 2019 hold historic cinematic events for Marvel fans. Both 2008 and 2019 also share another historic event for everyone, whether a Marvel fan or not. Just two weeks ago, the Federal Reserve Bank lowered interest rates for the first time since 2008. Yes, it has been 11 years since the last reduction!
Why Did Rates Drop?
Why the long stretch since the last rate drop? Simple answer: our economy has been steady and good. Interest rates typically hover around 4%. In 2008, our economy was struggling to say the least. Rates were dropped in a last-ditch effort to re-stimulate our businesses. Sadly, it was too late, and our Recession hit. Slowly and for many painfully, the economy came back as did interest rates.
Analysts now see the worth in being proactive this time around and want to keep this stretch of economic success stable as long as possible thus the 2019 announcement of the drop in rates. Lower interest rates on mortgages encourage more new homes to be purchased which boosts consumerism all around.
What This Means for You
Mortgage interest rates will go back up eventually due to changes in tax cuts and other economic policies as they usually do, but right now with rates as low as 2.25% for qualifying home buyers, this is when you want to lock in your rate. If you are ready to make the move from renting to owning there is no better time.
Are you looking for a little more room to breathe and ready to expand your square footage? Lower rates will also help your home sell quickly so you can get into a larger home on a faster timeline. Finding your “forever home” is always a great feeling and locking it in at these interest rates gets you the most bang for your buck.
Method Mortgage is here to help you find the right mortgage for you at the best rate for you. Reach out and let us help you take advantage of this historic event while saving you money on your new home.