Last month the Federal Reserve opted to lower interest rates, kicking off a variety of economic implications. For central North Carolina’s housing market, this was incredibly exciting news! The Triangle area has been a rapidly growing region for decades and a return to lowered mortgage rates offers prospective homebuyers endless opportunities. Ken Harvey Homes is currently building within beautiful communities across central North Carolina and now may be the perfect time to start planning a new construction home designed just for you!
How does the Federal Reserve’s decision affect the real estate market?
- While the Federal Reserve does not directly control mortgage rates, adjustments to interest rates occur as a by-product of its adjustments to the Federal Reserve’s Federal Funds Rate.
- The interest rate is the key rate as this is the rate at which banks lend money to each other, including the rates set for long-term loans–like mortgages.
- The trickle-down of lowering the Federal Funds Rate is that consumers, such as homebuyers, benefit through reduced lender borrowing costs.
What does that all mean in layman’s terms? Opportunity!
- Potential homebuyers who could not afford to purchase a home when interest rates were high may now be able to enter the real estate market.
- Homebuyers may be able to purchase larger homes without negatively impacting their budget. In other words, buyers can acquire more for less.
- Because more people will be able to purchase homes, the housing market will likely be stimulated. This creates a secondary trickle-down effect on local businesses.
- Current homeowners may opt to refinance existing homes at a new, lowered interest rate. This is especially appealing to those who purchased homes in 2022 or 2023 when mortgage rates were higher.
Ken Harvey Homes is ready!
The housing market in central North Carolina has been thriving over the past decade, driven by a combination of factors such as job growth, high-quality educational institutions, and a desirable standard of living. The Triangle is frequently ranked among the best places to live due to its strong economy, affordable cost of living, and cultural amenities.
As more people move to and within central North Carolina, the local economy will benefit from increased demand for goods and services. Historically when that happens, an increase in job creation and economic expansion follows. Infrastructure is upgraded, new schools are built, and healthcare options are expanded–all positive outcomes for the Triangle area and its residents. For local trade companies, such as contractors, furniture dealers, landscaping companies, etc., the future looks very bright!
The effect of a lower interest rate on new construction will be an uptick in demand as buyers take advantage of those lower borrowing costs. Homes that previously were out of financial reach may now be attainable and may even include unexpected upgrades. Because many prospective homebuyers have been waiting for the interest rates to lower, the real estate market will likely move quickly as homes come on and off the market quickly.
Ken Harvey Homes is currently building new construction homes in Durham, Fuquay-Varina, Louisburg, Raleigh, and Youngsville neighborhoods. We offer a variety of floor plans ranging in size from 1200 SF to over 4000 SF. The Ken Harvey Homes philosophy is to only build homes that they would love to live in–a promise that clients experience first-hand upon partnering with the team. From start to finish, the team offers a personalized experience to each client making the building process as pleasant as possible.
Reach out to the Ken Harvey Homes team today to start a discussion on how today’s lowered interest rates will be key in building your dream home tomorrow.