BIRMINGHAM, Ala. (WBRC) - For the first time in 11 years, The Federal Reserve cut interest rates Wednesday.
They will now range from 2% to 2.25%.
"If you are a consumer, and you have variable rate loans, those rates are going to come down," said Stewart Welch, with The Welch Group. "If you have student loans with variable rates, auto loans are typically variable rates. If you have home equity lines of credit, are typically variable rates. Credit cards are all variable rates. You'll see all of those start to go down."
If you’re looking for a new house, now you could buy more home for less money.
“For example, if someone wants to buy a $260,000 house today, that payment would be the same as it was a year ago for $225,000 house,” said Meg Hicks, a loan officer with Movement Mortgage. “It enables you to buy a more expensive house that may be bigger and nicer."
Hicks adds it’s also a good time to consider refinancing.
There was also the expectation that the rates might fall again in the future. Why? “When the fed changes the direction of rate, it’s typically a multi-year change,” said Welch.
However, Federal Reserve Chair Jerome Powell said while there could be more cuts, the central bank was not planning on a long rate cutting cycle.