RALEIGH, N.C. (WTVD) — The Federal Reserve lowered interest rates by a quarter of a point during its meeting Wednesday, which comes on the heels of underwhelming economic reports showing stagnant hiring and rising national unemployment.
“There may be a bump in inventory because we think we’ve got some sellers that may be sitting on the sidelines waiting to come on the market, while we’ve got some buyers that are also sitting on the fence waiting to jump off the fence, kind of waiting to see and stabilize those interest rates,” said Sandy Edwards, a broker with Coldwell Banker.
Mortgage rates had already been falling ahead of the anticipated cut. According to Freddie Mac, as of last week, the 30-year fixed-rate mortgage was 6.35% and the 15-year fixed-rate mortgage was 5.5%, both of which were the lowest since October 2024.
“I’ve been actively looking, so it is convenient and good timing,” said Rami Herzellah, a prospective homebuyer.
He’s been looking for a single-family home in Raleigh for just over a year, running into steep competition.
“Having those multiple offer situations has kind of been keeping me out of getting my offer accepted,” Herzellah explained.
He believes the lower interest rates will provide him with greater flexibility.
“It’ll definitely increase my price point and kind of keep the same monthly payment,” Herzellah noted.
“(For) that move-up buyer or that first-time home buyer who’s trying to get into the market, it may make a $50 a month difference in the mortgage payment and whether they qualify or not,” said Edwards.
While home prices have largely stabilized across the Triangle over the past couple of years, the combination of a ramp-up in pricing at the start of the pandemic and buyers locking in historically low interest rates during that time period has played a major role in the decision-making process.
“We do have folks that are a little bit price trapped that would like to move, and they’ve gotten accustomed to living within what their current interest rate is. (The) move up is more challenging because their payments are going to jump a fair amount to go along with the increased purchase price for the house that they want, and they’re trying to navigate what they can afford to do,” Edwards explained.
Interest rates also play a key role in the car-buying process.
“They make the difference between us doing good sales and just surviving,” said Floyd Price, who has owned Raleigh Auto Inc. for 32 years.
Price supports the cut and is hopeful for further action.
“For the last year or so, it’s been hard for the customers to afford the cars at the new prices, and they just can’t get the financing. A lower interest rate would probably make money available for a wider range of customers,” said Price.
Past that, he believes it would also enable customers to buy cars that would require less long-term maintenance.
“If they’re able to get a more reasonable payment, they’ll be able to buy a better car,” Price shared.
Wednesday’s announcement marked the first time the Federal Reserve had lowered interest rates since December 2024.
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