What does the recent rate cut mean to me?

When the Federal Reserve members got together really, really early on Tuesday morning - or late, late Monday night - of this week and did what they did, true financial news was made.

And what they did was drop the overnight funds rate (what banks charge each other as they make use of your money and mine) an incredible 3/4 of a point. A “point” is 1% interest rate. You may here about mortgage lenders charging a “1 point loan origination fee”. That means they’ll charge 1 percent of the loan amount to make the loan. More about that later…

So, back to the Feds. The reason they made this dramatic move was that international stock markets were in what can only be described as a melt down on Monday. In one of the few lucky breaks our economy has had in recent months, our stock market was closed for the MLK holiday so was not melting down. And the Feds wanted to make sure the heat was off when the opening bell sounded on Tuesday. A broad stroke was required to calm nerves. And stroke they did. And while the market dropped a bit down on that day, it was nothing like the 5%, 7%, 10% losses the other markets had experienced on Monday. And the market was up for the week by Friday. First time in 2008 that’s happened.

What does all this mean to you? It means that interest rates on mortgages are as low now as they’ve ever been. My favorite lender was quoting 4.875% on 15 year loans for a short while this week.

4.875%!!!!

So, if you are even thinking about buying a house, particularly in my neck of the universe here in Greensboro, NC, and if you have decent credit, the TIME IS NOW. Again - and I am running the risk of being the online version of a broken record (for those of you old enough to know about vinyl records) property values in Greensboro are not in the boat some other areas are. We aren’t seeing values drop. So buying is a good idea.

It’s a buyer’s market. This doesn’t happen often.

Plenty of inventory.

Crazy low interest rates.

And me!

What more could you ask?