--- title: "Good News: The Fed Dropped Rates, Again" description: "Good News: The Fed Dropped Rates, Again" --- Still Making Loans, Still Closing on Time [COVID-19 Update](https://capitalfund1.com/covid-19-update/) [+ ](https://blog.capitalfund1.com/feds-dropped-rates#) [+ ](https://blog.capitalfund1.com/feds-dropped-rates#) [REQUEST INFO](https://capitalfund1.com/request-information) # Good News: The Fed Dropped Rates, Again By [Noah Brocious](https://capitalfund1.com/company/) – President/RI/Mortgage Loan Originator – For the third time this year, the [Federal Reserve dropped interest rates](https://www.bankrate.com/banking/federal-reserve/interest-rate-decrease-winners-losers/); this time, the central bank set target rates to 1.25% to 1.75%. In the FOMC minutes and Chairman Powell’s subsequent press conference, the reason for the drop in interest rates pointed toward a bleaker world economy. However, the domestic economy remained a robust and vibrant indicator.  ## ***Okay, but what does that mean for real estate investors? *** The way central bank rates go, so do mortgage interest rates. With already near-record-low mortgage rates, the housing market in Phoenix remains highly competitive for buyers. The Valley market is heavily tilted toward sellers with only two months of supply and sustained year-over-year (YoY) price increases.  In the next 90 days following the rate cut, mortgage rates typically fall by the same amount, so economists expect a quarter of a point drop in mortgage rates. While a quarter-point might not seem like a material difference, it adds up over the life of a loan. When you do the math, a quarter of point translates to nearly $10,000 more in purchasing power on an average 30-year, $300,000 mortgage. In a hot market like Phoenix, this creates an opportunity for real estate investors to use this opportunity to boost their profit margins. Buyers can now afford a slightly larger mortgage, which can give them a slight edge in a competitive bidding war for a home. Fix N Flippers, for example, could price their properties higher, or it could be time for buy and hold investors to cash in their investments through a higher-priced sell.    ## **The Bottom Line for Investors** Whether you are a buyer, seller, or real estate investor, low central bank rates benefit all the players involved. From boosting margins to finding that dream home, the real estate market in Phoenix is hot and will remain so for quite some time. Learn more about Phoenix rates and how we can help by [contacting us online](https://capitalfund1.com/hard-money-loan-application/) or calling [480.889.6100](tel:480-889-6100). On November 6, 2019   /   [Blog](https://blog.capitalfund1.com/tag/blog)   /   [Leave a comment](https://blog.capitalfund1.com/feds-dropped-rates#comments-listing) ### Contact Capital Fund I [Back to Top](https://blog.capitalfund1.com/feds-dropped-rates#) ### Contact Us ### Latest Posts - [![Two Reasons We Won’t See a Rush of Foreclosures This Fall](https://files.mykcm.com/2020/07/21114651/20200722-MEM-ENG.jpg) ](https://blog.capitalfund1.com/two-reasons-we-wont-see-a-rush-of-foreclosures-this-fall) [Two Reasons We Won’t See a Rush of Foreclosures This Fall](https://blog.capitalfund1.com/two-reasons-we-wont-see-a-rush-of-foreclosures-this-fall) The health crisis we face as a country has led businesses all over the nation to reduce or discontinue their services altogether. This pause in... [Read more → ](https://blog.capitalfund1.com/two-reasons-we-wont-see-a-rush-of-foreclosures-this-fall) - [![Mortgage Rates Hit Record Lows for Three Consecutive Weeks](https://blog.capitalfund1.com/hs-fs/hubfs/Rich%20Text%20Pasting/unknown-1595280093502.jpg?width=725&name=unknown-1595280093502.jpg) ](https://blog.capitalfund1.com/mortgage-rates-hit-record-lows-for-three-consecutive-weeks) [Mortgage Rates Hit Record Lows for Three Consecutive Weeks](https://blog.capitalfund1.com/mortgage-rates-hit-record-lows-for-three-consecutive-weeks) Over the past several weeks,*Freddie Mac*has reported the average 30-year fixed mortgage rate dropping to record lows, all the way down to[3.03%](http://www.freddiemac.com/pmms/pmms_archives.html). Last... [Read more → ](https://blog.capitalfund1.com/mortgage-rates-hit-record-lows-for-three-consecutive-weeks)