The Fed Has Cut Rates: What This Means for Real Estate and Investors

The Fed just announced its first interest rate cut in over two years—a move widely expected, yet still significant. While the immediate market impact is yet to unfold, this pivot marks a potential turning point in monetary policy.

And there’s reason to believe more cuts may follow. Beyond inflation and employment data, one underlying factor isn’t getting much airtime: the national debt. With over $34 trillion outstanding, the cost of refinancing that debt at high rates becomes unsustainable. Lowering interest rates isn’t just about stimulating growth—it may also be a necessary step to ease the burden of federal debt service.

So, what does this mean for real estate?

📈 Rate Cuts Usually Mean Rising Prices

If history is any guide, rate cuts tend to lead to increased borrowing, increased buying—and rising prices. It’s basic supply and demand.

• Lower rates → More affordable monthly payments

• More affordability → More buyers jump in

• More buyers → More competition and upward pressure on prices

This is especially important to understand if you’ve been sitting on the sidelines, waiting for a “deal.” While that instinct makes sense, the reality is that waiting for both lower rates and lower prices to align is rare.

In fact, when rates drop, deals often disappear—fast.

🏠 For Primary Buyers: Now May Be the Time

If you’ve been waiting to purchase a primary home until rates fell, this may be your signal to re-engage. With today’s cut and more possibly coming, the window for negotiating before the rush could be closing. As rates ease, demand tends to surge—especially in desirable markets.

💼 What I’m Doing Right Now

Personally, I just took a close look at my own real estate portfolio and noticed something important: four of my rental properties are no longer delivering acceptable returns on equity. The reason? Their property values appreciated faster than their rental income did—so even though rents are solid, my ROE (return on equity) has declined.

I decided to sell those properties and initiate a 1031 exchange—allowing me to defer capital gains and depreciation recapture—and purchase replacement properties where the numbers look better for both today and in the future. Properties that already meet my cash flow standards and, importantly, have upside potential in both appreciation and future cash-on-cash return.

Why does that matter?

If rates continue to fall, I’ll be able to refinance at better terms, improving profit margins. And if inflation and home prices rise alongside it, rents are likely to rise as well. That means not only lower expenses from a better mortgage rate—but also increased income from stronger rents.

🚨 Don’t Wait for Perfect

Many investors (and even homeowners) aim to buy at the perfect time: low prices, low rates, high inventory. But that moment rarely arrives all at once.

The savviest investors don’t wait for the perfect setup—they position themselves ahead of the herd. That usually means acting when things feel uncertain, not obvious.

If you’d like to talk through your current portfolio, or you’re evaluating your next move, I’d be happy to share how I’m approaching this moment—and help you navigate what comes next.