Fed Cuts Rate Half Point

Is My Mortgage Going To Be 1/2 A Point Lower Now?

No.  Sorry Charlie.  If you were hoping your home mortgage rate on your next purchase was going to be an automatic half point lower due to the Fed rate cut, sorry to disappoint.   There is not a direct correlation between Boulder home mortgage rates and the national Federal Reserve rate.

Boulder Colorado Homes Selling For Full Price OR Better

The ever resurgent Boulder Sellers’ market is filled with homes selling for full price or better. Check out the graph below that goes back a considerable distance in time. All the way back to the mid nineties when the Boulder home market last experienced record growth and change.

graph showing attached dwellings in red and single family residences in blue lines and what percentage of Boulder homes sold for full price or better than full price.

And the trend in February? More of the same. Maybe even more dramatically.   My own experiences in the trenches is that multiple offers, for better than full price seems to be the norm once again in this marketplace.

Strong Job Market Impacts Local Housing Market

Coronavirus Negative Impact!  Just last week there were reports of Southwest Airlines looking to add eighteen gates at Denver International Airport. With the national slow down in travel, look to see those additional gates impacted/postponed. 

Big thank you to Justin Petaccio with Spire Financial for sharing his helpful eNewsletter.  Another mortgage lender on my thank you list – Dana with Premier Mortgage.  She shared this announcement on the Boulder insider series (where I learn all the helpful information I’m always sharing with clients just like you!)

Boulder Job Market Excels

In fact, Denver’s job market is ranked as the third best in the nation.  Fort Collins, Boulder, Denver and Greeley all rank high for excellent job creation.  More jobs means more people and that in turn is going to continue to impact housing markets.  Plan to continue to see an influx of new arrivals to the Colorado Front Range.

So When The Fed Cuts Rate Half Point Nothing Happens?

Not exactly.  While there is not a direct correlation between actions of the Federal Reserve and your home mortgage rate, there is an impact.  Home mortgage rates are improving even as I jot this blog. 

The Fed Rate reduces the cost of borrowing money.  Mortgage lending banks tend to “price in” a rate cut when it is announced.  The actual moving of the Fed rate doesn’t generally impact the rate you’ll get quoted by your mortgage lender.

So Happened When Fed Cuts Rate Half Point?

The cost of a bank or financial institution borrowing money for up to one day dropped – considerably.  This move is designed to make borrowing more attractive and keep liquidity in the US economy. 

The upside here is it is a tool to avert recession and keep the country moving forward even in the face of a daunting challenge such as Coronavirus.  Big shout out to Jordan Chomko for sharing a helpful detail oriented blog on the matter.

Restaurant Of The Week

If you get the opportunity, I highly suggest Dickens Tavern in Longmont Colorado. Iconic gem with a great backstory.  Will you better understand Fed rate cuts after dining here? I don’t think so.  But you will find a tasty menu, friendly staff and beautiful dining options such as the Vault Room pictured below (I didn’t get a photo of the massive bank door).

the vault room in the dickens tavern longmont co offers one of a kind intimate dining experience

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