Chip Somodevilla/Getty Images; Realtor.com; Getty Images (1)
The Federal Reserve has issued its first interest rate cut in four years, kicking off an easing cycle that will make new mortgages more affordable.
Fed policymakers announced the half-point rate cut on Wednesday, bringing the central bank’s effective benchmark rate to about 4.8%, down from a two-decade high of about 5.3%.
The move, along with further rate cuts expected this year and next, will lower borrowing costs for consumers and businesses. Mortgage rates, which have already dropped roughly a percentage point since May, should continue to trend down as the Fed signals further rate cuts.
Mortgage rates aren’t directly tied to the federal funds rate, but follow long-term trends in the bond market based on investor expectations about future Fed rate moves.
Developing story, more to follow.