HOUSTON, TX – As mortgage interest rates begin to fall, a wave of eager buyers are preparing to return to the market…right?

If rates continue to fall, we could potentially see a surge in demand that would surpass even the bidding wars of the COVID pandemic as eager buyers compete for limited inventory.

In September, the United States Federal Reserve announced that it was reducing its reference interest rate by 0.5%, an unusually large reduction.

The reason for this substantial reduction can be attributed to more moderate inflation projections which give the central bank confidence that it can reduce borrowing costs. The move is expected to give many Houstonians more flexibility in managing their debt, mortgages and auto loans.

How these cuts could help Houstonians

For the average Houstonian, entrepreneur and financial expert Mark Madrid sees it as a step in the right direction. He said he spoke to a small business owner in Houston who also thinks the cuts will give her more flexibility and less stress.

“(The business owner) said, ‘You know, that means more money in my pocket, and that’s what I desperately need right now.’ We need access to capital, but we also need management of our household, management of our assets, management of operations,” Madrid said.

“So it won’t necessarily mean that the prices of food on the table will go down, but it will have that effect on interest rates, which affect every aspect of our lives. It affects where we live and what we drive. This affects what we withdraw and what we spend in terms of cash flow. he continued.

So… What now?

So now that we’ve heard how these cuts may impact particular elements of Houstonians’ lives, where should we go from here? Mark says the answer lies in the perspective you have on the situation.

“So I think that’s where you become like an Amazon shopper, right? If we know we want a certain product, and we see what the choices are, and we evaluate what is sponsored and not what our price is, or if we look at the reviews I want to put up for public scrutiny . Keep your eyes and all senses open to opportunities, and you now have more leverage to potentially choose between loan choices.

On Tuesday, KPRC 2 anchor Andy Cerota speaks with a Houston-area lender about good timing and trends that could emerge in the future.