Home buyers, sellers, and realtors are rejoicing following the Federal Reserve’s decision on Wednesday to reduce the lending rate by half a point. This reduction is expected to lead to lower mortgage rates in the coming weeks, positively impacting the real estate market.

Experts like Stark view this move as beneficial for buyers, sellers, and the economy overall, anticipating an increase in market inventory. “Home improvements often occur when people prepare to sell or after a new owner moves in,” Stark noted, highlighting the economic activity triggered by home transactions.

Many believe that the Fed’s half-point cut will encourage hesitant homeowners to consider selling their current homes, knowing they can afford a new one. The average 30-year fixed mortgage rate is currently below 7% and is expected to gradually decrease.

“Sellers are paying close attention to interest rates, as selling today means buying tomorrow,” Stark explained. He believes this could boost fall home sales, which typically slow down after the busy summer season. He hopes the Fed will make further reductions soon.

Stark expressed optimism that policymakers will recognize the significance of homeownership and real estate transactions for the broader economy. Projections indicate that interest rates may fall to the high 5% range next year and mid-5% by 2026, according to The Mortgage Bankers Association. Stark added that additional Fed cuts could bring these lower mortgage rates even sooner.