There’s an air of optimism for American consumers following the Federal Reserve’s cut on key interest rates. Jonathan Gonzalez reports for the NBC4 News at 5 p.m. on Wednesday, Sept. 18, 2024.
Americans grappled by inflation may sense a bit of relief since the Federal Reserve announced Wednesday it lowered interest rates by a half point.
Although the move primarily impacts the central bank’s federal funds rate, consumers will feel the shift since it will likely spill over to monthly credit card, auto loan, personal loan and mortgage costs. Realtors in Southern California are hoping the announcement will inspire homebuyers.
“So, this property’s been on the market for 125 days,” said Jimmy Mercado, a realtor who showed NBC4 a listing in El Sereno.
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During the first two years of the COVID-19 pandemic, most homes stayed on the market for days. Since 2022, however, the dream of home ownership became unattainable when the rate of inflation increased.
“The rates went up the quickest they had in like 20 years,” Mercado said. “So, it went from 3% to about 6% in three months and that kind of started flatlining the market.”
Wednesday’s announcement from the Federal Reserve is first cut since March 2020. The federal funds rate is slated to move to a range between 4.75 to 5%.
“This is a huge day,” Mercado said. “We anticipated a quarter percent cut. It’s half a point; that’s a lot of money that now buyers can leverage out."
For families, it’s a welcomed announcement they say will help their households.
“We were just unemployed, but we just got employed again,” said Jacki Bembridge, a mother of six. “And so, we’re just starting to climb out of things and to do budgets and then to know that this is happening will be very, very helpful.”
“I think it’s definitely a good step in the right direction,” said Alhambra resident Joe Benegret. “I guess let’s just hope it goes forward as well with groceries. I know just common living right now, it’s really taking a hit.”
